had it redlined copy for this committee and congress and american people to see what has been negotiated and identified as the new bill of over the last few nights or weeks and now presented before us. the process suggests that much has been done without the committee's active involvement and that we are now yet again being forced to consider legislation that we do not with regard to key elements, there's little disagreement that we needdto end a bailout. -- and balance. -- end bailouts.

it is important and we should improve resolutions for failing companies to limit damage to the economy. we should not create a system in which there can be ongoing involvement of the federal government without reasonable limitation to protect against this unending federal bailout of these large and institutions. the largest bailout in america, fannie mae and freddie mac -- so far, fannie mae and freddie mac for the largest of the bailouts we have dealt with. if you look at the takeover of the student loan system and the auto industry, the $145 billion that the taxpayers are already on the hook for with regard to

fannie and freddie, which is expected by experts to go up to over $353 billion before it is done, it is absolutely absent from this legislation. on the senate floor, i have offered an amendment which simply requires that fannie mae and freddie mac be included as part of the federal budget as far as either institution is part of a conservative shirt is a conservatorship. -- part of a conservatorship. the amendment failed on the senate floor could there's still nothing in the bill about fannie and freddie. we told the american public what data they are assuming because weight failed to reform fannie mae and freddie mac. after the u.s. government

assumed control in 2008 of fannie mae and freddie mac, two federally chartered institutions, "the congressional budget office concluded that the institutions have effectively become government entities whose operations should be included in the federal government budget." if we did that, the debt picture that we have talked about here in congress would be dramatically changed. but at least the american public would know what that we have assumed on their behalf and which we refuse to deal with. -pi am also concerned that the derivatives title does not protect and users. the people of manufactured goods in this untry, the people who provide those things that our economy moves on, and the need to have a properly operating derivatives market, we also have a massive expansion of government. it has been said by many that

you should not let a good crisis go to waste. this crisis has not been allowed to go to waste. the creation of large new virtually uncontrolled protection agency's are set to be aimed at wall street. but there are folks in main street who are worried. my time is gone. mr. chairman, i hope we can deal with some of these issues as a committee and come forward with legislation that it's the issues that we are aiming at, rather than broadly hit the rest of the american economy. >> the senator from vermont. >> thank you, mr. chairman kent

island to commend chairman dodd, chairman lincoln -- they do, mr. chairman. i just want to commend chairman doug, chairman lincoln, and others. there was the statement of trying to find at what went wrong. we know what went wrong. it went wrong in 1999. for 65 years, glass-steagall made our financial system in america sound and strong. it brought us through world war ii. it brought us through the korean war, the boom years of the 1950's, the tumultuous years of the 1960's and 1970's, brought andiberal president's conservative presidents. but, in the 1990's, what i3 these whiz kid wizards of wall

street dreamed up new ways of creating wealth out of thin air. they devised ways of developing derivatives on derivatives on derivatives to the nth degree. they had nice mathematical %+rmulas. the problem was that they had no way of evaluating it appeared they had no real way of maximizing their promise. what they said was, to do this, all we can do now is under glass-steagall is to do it through the investment banking system. in order to really make money, we need access. we need access to the money that is in the insurance industry. we need access to theemoney that is in depository banks. so wall street led the effort in 1999 to do away with glass- steagall and it was aided and abetted by the clinton administration. i was one of a two voted against it in the united states senate.

then they put this to together -- this stew together. it has made as sick. to my way of thinking, some people say that you cannot put the genie back in the bottle big i am sorry. i happen to believe that you can carry -- back in the bottle. i am sorry. i happen to believe that you can. you have to put up those walls. then makes things a little bit more transparent as it pertains to the investment houses. but i know that that is a minority view. but i still think that is the only way you're going to solve this. as far as this bill goes, i want to compliment senator lincoln for her statement and her leadership on this issue, on the issue of derivatives.

they have to be transparent and they have to be complete control. glassssteagall work for all of those years. we have to get as close to that as we can. i defy anyone here on this conference committee, anyone sitting in this room, i defy anyone in wall street or new york to show me one person, one trader, one was kid, one of these entities in new york who lost their home, their money, and everything and were put out on the street because of what happened. i defy someone to show me one of those persons. we can show you hundreds of thousands of americans who lost their homes, who lost their businesses, who lost their jobs, where thrown out on the street because of what wall street did. it is up to us to make it right for the future. thank you, mr. chairman. >> i want to thank you and

chairman dodd and others involved for having this conference. i look forward to participating. there is no issue that i have working on more than financial reform. i look around this room and think about what an unusual place washington is. fortunately, it is so different from the rest of the country. we began this congress working on health care. two of the main driving forces regarding health care were the cost of health care to individuals and trying to lower that and the cost of health care to our government. over the next 15 months, we have proceeded to pass a bill that increases the cost of both of those. so here we are today appeared we art -- here we are today. we are passing a financial reform bill that is not only

going to limit credit, but it will increase the cost of credit and probably and most likely would make us non- competitive with the rest of the g-20. . there is nothing in this bill that does anything but harm to those countries, companies -- excuse me -- across the hhartland of america that makes things, that needs to borrow a line of credit from a bank. maybe they are making heavy equipment and they want to hedge the cost of metal prices so that they are able to keep people employed. maybe they are selling the product to another country and they want to hedge so that they know they're getting paid in u.s. dollars as they know them today. and maybe they're seeking credit could maybe it is a mezzanine critic of some kind, -- they're

seeking credit. maybe it is a mezzanine credit of some kind. this is a time in this country when we are trying to create jobs. this bill has some good things in it, and i am not about the said that it does not. we have a lot of smart staff people who have worked on it. new debt, there are some good provisions. but what it does not do is address the core issues of the crisis. at the end of the day, we can talk about all this that we wish. but the fact is that there were loans given to people across this country that had no ability to pay it back. that is what has brought down pvery single financial institution in this country that has come down parent that has been the problemm there's nothing -- come down. that has been the problem. there is nothing in this bill to do with the underwriting. we also have the issue of fannie

and freddie, who were enablers. i am not about to say that they created the whole crisis. but it is amazing to me that we would not have the ability to deal with them on our balance sheet as we deal each year with their budget. what i would say to the chairman -- i am obviously disappointed. i have worked over the last year to support this bill. i want to see regulation takes place, corporate regulation. i am disappointed with the product. -- appropriate regulation. i am disappointed with the product. at the end of the day, this is going to be the law of the land. i realize that politics, unfortunately, in this body overtakes substance in the end. this is an aaministration that has an ideology that they will push and push and push. over the course of this conference, i want to say to the chairman and presiding

officers that it is my intent to try to make this bill stronger for those people across our country who are trying to create jobs. with community bankers in tennessee. not one of them support this legislation. with of that, mr. chairman, i thank you for the time. fiat think -- i thank you for the courtesy. >> the senator from south dakota. >> a year ago, the administration put forth his proposal to reform financial- services regulation. since then, the house and senate have held thousands of hearings in both chambers and they have had comprehensive legislation. today, we begin the merging of these two documents. i think it is important to note that [unintelligible]

i applaud the hard work of chairman dodd and chairman frank. their dedication to put together a package of reforms makes the most substantial changes to financial services regulations since the great depression and is commendable. there will create systemic risk oversight and giving regulators tools to resolve [unintelligible] it woold create a better system of prudential regulation. it sets up a system of regulations for derivatives and

fills a gap in regulations. i was part of the senate product. we were able to find a great balance on a handful of tough issues. the legislation better protect consumers and give the eeded tools to regulators to do their job and provide some certainty to businesses. it also fills the regulatory gap that helped cause the crisis, makes wall street regulators accountable for their actions, and put more cops n the beach when it comes to bad actors in the banking and investment sectors. more specifically, the senate bill fines important and common ground on pre-emption and say if enforcement and an approach to

investor protection and broker- dealer and investment regulation. it creates an office of national insurance that providds information regarding national and international insurance issues and it strengthens the oversight and regulation of credit rating agencies. this work recognizes that small businesses and the financial service industry are an important part to our nation's economic recovery. as we move through this process, we must keep in mind that, though the senate bill support, it also passedsan narrowly. the partisan nature of their bill must be preserved in order to send legislation to the president's desk. i look forward to working with

my colleagues in the coming days and workout outstanding issues and finish wall street reform legislation that we can be proud of and the american people will know it protect them -- not wall street see 0's ceo's.t wall street see zer >> we have made progress in the number of jobs. we have several consecutive months of job growth. mary economy has a long way to go before a robust economy takes hold. the nature before us is a part strengthen our economy in an long run. it brings the main street principles of transparency, accountability, and fairness to wall street. the bill we are conferencing today it fundamentally

transformed how we protect consumers, families, and small businesses from reckless and abusive financial services practices. under the is -- under the previous measures that we're changing, banks cannot take enormous risks and reaped enormous profits while the u.s. taxpayer foots the bill. i look forward to working with my colleagues to craft the best possible bill. let me briefly mention a few points that i think are worthy of note. first, this legislation establishes a new office of financial research. it represents and the sport -- an important step in understanding the threat to our system could it will provide early warnings -- our system.

it will provide early warnings. second, we are required that hedge funds register with the securities exchange commission. this will shed light on an important aspect of our economy, the dark pools of today. thirdly, we will bring economy -- accountability and transparency from regulators who supervise derivatives in the first place. we also must make as many swaps as possible, transactions that are traded, cleared, and reported to regulators and the marketplace. firms should be required to put sufficient capital to engage in these transactions, which should help rein in the excessive speculation we have seen in the past. we must continue to ensure that the effective coordination between the sec and the cftc continues. i also believe that clearing

houses and exchanges should have emergency access to federal reserve money in the case of parket disarray. we also need to ensuue that banks are not speculating through derivatives activities. i hope we can approve the amended on proprietary trading. provisions are improved on the title line senate bill. we have worked to make sure that these are harmonized and effectiie in preventing the excesses of the credit-rating agencies. i want to commend chairman could george p. -- senate kajorski. we have to ensure that there is an effective consumer watchdog. there is the presumptions that somehow this will interfere with business.

my sense is that consumer protection is good business. if we can provide good consumer protection, we will enhance business. we have a lot of work to do, mr. %+airman. i look forward to working with you and my colleagues to make sure that this legislation is a significant step forward. thank you, mr. chairman. >> i believe that concludes the senate participation. >> let me thank courthouse colleagues for that. -- let me thank our house colleagues for that. i know how warmly the affection is for the senate on the house side. [laughter]

>> anything that will allow houssenate members to leave woue greatly supported. [laughter] >> i do not think anything affected me as much in the hearings that i have south through as the arguments made by the fed. if fannie mae and freddie mac were not regulated, if the situation was not addressed, it would pose a systemic risk if they collapsed. the worry on the part of the fad is that we would do nothing. those institutions would collapse. behind them, it would bring other financial institutions. it was congress, especially with of the gst act, -- the gse act, that tied the hands of regulators and that led to this

systemic risk. fannie mae and freddie mac correct the center of the housing market and -- and freddie mac were at the center of the housing market. how did everybody get into a home? beyond this, we were muscling to get down payments down to zero. to reach the affordable housing mandates enacted by congress in 1992, fannie and freddie became the largest purchasers of these and joejunger loans. -- of these jokes loans -- of these junk loans.

congress asked us to rein in the excessive risk-taking. senator dodd helped lead the opposition to it. under the leadership of richard shelby, senate republicans passed the bill through the banking committee it that the attack to the heart of the+ problem, the excessive buildup of leverage address within the mortgage portfolios. that bill was written up by the fed. at that time, these institutions were leveraged at 100-1. this was the warning that thee3 pending collapse in the financial system if this was not addressed. in 2006, i was reported that the white house, treasury department, and treasury reserve lined up behind mm. shelby and senate republicans, but he was never able to bring this bill to the floor because of opposition by democrats. i carry the opposition on the house side. -- i carried the opposition on

the house side. i want to roll the dice a little bit more in this situation toward subsidizing housing. i want to go to something that president clinton said. in 2008, he said, " i think the responsibility that the democrats have may rest moret in resisting any efforts by republicans in the -- may wrest more in resisting any efforts by republicann in congress. our housing market, our housing sector, and the broader economy are dealing with the consequences of that very systemic shock that the fed warned us about. were there other problems? yes. but this was the shock that they anticipated, warned about, and we did not take action against no regulatory reform never will be complete or effective without

addressing the two institutions most responsible for the collapse of the housing market. despite what some may claim, we're not advocating for the elimination of gse's tomorrow. i wantq touote -- i want to quote one of my friends from the other side of the aisle. this needs to come out of the bill. you cannot have government permanently lending to building firms, purchasing the assets of the obligations of a solvent financial institution. the government and that with 60% of the capital markets in terms of a government back stock in that cut the situation. that is a very dangeeous position to be enterein.

that makes these too big to fail. thank you, mr. chairman. >> i will address this. the history on fannie and freddie is a very partial one on the part of my friend. the fact is that repuulicans controlled both houses of pongress from 1995 to 2006. in 2007, when the democrats took over, the first in the house and then they said, we passed a bill that gave the bush administration much of what it wanted. under that authority, secretary

paulson put fannie mae and freddie mac under conservatorship. we're not talking about ignoring them. they have been in conservatorship since 2008. then the gentleman said that congress forced fannie mae and freddie mac. i did not see any need to do much regulation could in 2004, president bush ordered fannie mae and reddie mac to go above 50% in the mortgage is that they bought that were for people below the median income. i criticize that publicly at the time. and then the chairman of the financial services committee tried to regulate fannie mae and freddie mac. he put a bill through the house. i voted for the bill on committee and against it on the floor. the gentleman from california correctly notes that he carried the amended. he forgot to say that he got

one-third of the republicans to vote for it. the amendment was defeated on the floor of the house. many of the members here voted3 california. the senate democrats offered in 2006 the version of the bill that has passed the house under the republican sponsorship and there was an internal republican dispute. that is what led to their not being any bill. a year later, when we were in the majority, it did come to the floor. the problem was subprime mortgages. they were not birds needed by fannie mae and freddie mac. -- they were not brought by fannie mae and freddie mac. the federal reserve had the authority to regulate subprime mortgages and mortgages of all

kinds outside of the banking system. more came out of the outside of the banking system than inside. in 2004 and 2005, two of my north carolina colleagues moved to regulate subprime mortgages by statute because the fed would not use the authority. we were frustrated because the republican house leadership told the financial services committee not to do it. in 2007, when the democrats came back to maturity, which passed a bill in the house to regulate subprime mortgages. it was after we did that that mr. bernanke finally decided that it was time to use the authority. for all theetalk we have heard

here, 12 years of republican rule, there was zero legislation for fannie mae and freddie mac. in two years of democratic rule, the bill was passed. finally, i want to introduce into the record an article in "the new york times" in which paul volcker says of that "sweeping financial reform before congress would make the united states a model for the world. the united states will go from less to the head of the line if this legislation is passed. i am glad that there could be international acceptance to the basic principle. i have the impression that it is on a very good side pat.

-- syed path --side path? -- side path."my time has expir. >> can i ask the gentlemen -- >> know. my time has expired and there are a lot of members here. it is now the gentleman from illinois five minutes. >> the senate does have just started. do not be insulted if weewalked out on you. [laughter] >> senator, never apologized for leaving. [laughter] that goes to any member. i have never been offended by anybody's absence. [laughter] the gentleman from illinois. >> thank you, mr. chairman. thank you for holding this first

meeting of the congress. it is an honor to be here. i want to thank the republican leadership for asking me to participate in these deliberations. the financial regulatory structure is broken and needs reform. we needed smarter and stronger regulatory system can no more bailouts. through this process, a republican colleagues have offered alternative solutions. some have been accepted, but the vast majority of them have been rejected. one of my constituents traveled to washington, d.c. to discuss

regulatory deform with me and my staff -- regulatory reforr with me and my staff. he asked, "why is my business included in this bill? i never did a subprime loans." his small business, like so many others, risk being collateral damage under this bill. that is the outcome that i hope my colleagues will workkwith me to prevent. there's also consumer choice. the new brokers to will tell businesses what businesses and products they can and cannot offer to certain consumers and take financial decisions and options away from the american family. we must have financial reform, but this the bill reaches far peyond responding to the financial crisis. i want to focus on one specific area, consumer protection.

how do we protect consumers from bad actors and fraud without diminishing their access to credit? consumers want protection, but they also want choice. we must strike the right balance. what is not the answer is the democrats' plan to create another federal agency, either as a stand-alone or as a bureau located within the federal%+ reserve. we already have the fed, the sec, dot is, and the ncua, just to name a few. that creates more aircraft, confusion, and cost for ponsumers. why not address the real problems with these agencies rather than creating aanew one. -- a new onn? the current structure is clearly flawed.

uncoordinated regulation led to the lack of enforcement. the federal reserve had the authority to update regulations for mortgages and credit cards and fill to do so. many federal agencies were charged -- and failed to do so. many federal agencies were charged to pick up the slack. had two regulators. they had conflicting mandates and missions. as a result, fannie and freddie with unfettered, backed bad mortgages, and laid the foundation for the mortgage meltdown. this regulatory reform bill will repeat this mistake in the name of consumer protection. it will have two regulators,

including a new agency, writing regulations for regulators to enforce. 3 stronger, more nimble, and more coordinated regulators need the authority and resources to do their job, exercise strong oversight, and rain in excessively risky deceptive and fraudulent practices. these are the solutions that i am willing to reach in this bill. it will put us back on track so that our economy can grow, businesses can create does billy needed jobs, and families can secure credit. -- can trade and desperately%+ needed jobs, and families can secure credit. >> the problem for the fed was what the democrats were willing to accept was not legislation that allow them to be leverage the portfolios. mr. showbiz legislation effectively -- -- mr. shelby's

legislation effectively -- [unintelligible] >> [unintelligible] >> i suppose that we are using the titles of the senate restoring the financial stability act of 2010. considering the sweeping nature this is the most important financial services conference committee since the gramley said bliley act of 1999. i fear deregulation would have negative consequences. i voted no. i was right. the financial crisis legislation we have drafted has made clear the important role of the financial-services industry in the lives of everyday americans, rich and poor, homeowners and renters.

this provides us with the attorney to use public policy to level the playing field, be fair, and not to benefit sullied the few, the powerful, the rich, but all americans. -- and knocked benefit solely -- and not bbnefit solely the few, the powerful, the ritz, but all americans. the provision to establish a protection agency is essential to this legislation. derivatives, including credit default swaps also contributed to the current crisis. these complex instruments were designed to earn huge profits for parties on all sides of the transaction. unfortunately, and lack of transparency and oversight led

companies like a id to -- like a to offer swaps they cannot control. i am familiar with the issue of interchange [unintelligible] it is a very complicated issue, but must be resolved in a transparent process that recognizes the benefits of the electronic payment system to consumers and merchants. it must not harm committee banks and credit unions. protecting the consumer should be the guiding principle of our deliberations. ensuring the passage of a law in california called the maxine

waters school act of 1989, it provided them tens of thousands of dollars in student loans. i am concerned about making sure that students who attend these schools receive a quality education. i worked with the other nine cbc members to draft an amendment that passed on a voice vote to establish offices of minority and women inclusion. the case for these boxes is clear. according to a recent study, and the wealth gap between african- americans and whites has more than tripled in 23 years. we absolutely must open up opportunities for minorities and

women within the federal banking agency. these offices will ensure that agencies have a fair process is for hiring, recruiting, retraining minority and women employees and contract with minority businesses. for his leadership in passingk the house bill and for hitting the open forum to help resolve our differences. minority communities were targeted in the milk them. when you go into these communities, foreclosed properties are throughout the communities, driving down the values of homes. people have lost everything that they thought would be their american dream. i look for it to this conference committee. i think we can do a lot. i yield back the balance of my time. >> the woman from west virginia. >> thank you for holding this

meeting. this is a very critical point for every individual american and to every american business and to our economy and economic recovery. it is my hope that all proceedings of this conference will be in open and not behind closed doors. we are embarking on the final step of the largest bill all of the financial system that this body has done. if police weekend was that the american people can follow our actions -- the least that we can do is ensure that the american people can follow our actions. our goal for our constituents was to end the culture of

bailouts that has pervaded in washington for the last two years. the time has come to put wall street and main street on a level playing field. all participants will kkow the rules of the game. that is what an enhanced bankruptcy will accomplish. this makes sense because it will build a barrier of court objectivity on these issues and complicated issues that need to be resolved. i will remind them that the panic was caused by the failed expectations of a government bailout. furthermore, the new chapter of bankruptcy would be a more open and transparent process than the proposals in the house and senate bills. bankruptcy rules are developed and well known.

it is a simple choice. do we want our courts to handle these cases or do we want to perpetuate the culture of cutting deals behind closed doors over the eekend with serious consequences for the american people? some will say that their version of the resolution of 40 is a and improvement -- resolution authority is an improvement. but these are the same tools that were used to orchestrate the bailouts of citigroup, bank of america, chrysler, gm and rescue to the shareholders of bear stearns. there is also a matter of perpetuating taxpayer bail us. the house bill has a bailout fund. the senate bill allows the fdic to borrow money to wind down the

is a institutions. who ultimately pay for these mechanisms? the taxpayer. enough is enough. we can do better by creating an enhanced chapter of the bankruptcy code with a resolution of 40 to prevent future bailouts and create better transparency -- resolution of failed entities to prevent future bailouts and create better transparency. as we know in the conservatorship of fannie and freddie, we have $145 billion of taxpayer dollars already at stake. the time has come for sensitive reform of the gse's. we still have plenty of time. we have the will to tackle the

enormous exposure to the taxpayers of fannie and freddie. i look forward to an open and transparent conference and the type of financial reform that will hold wall street accountable and permits main street to thrive. >> the chairman of the agriculture committee will be next. the gentleman from minnesota. >> thank you, mr. chairman. thank you for your leadership on this issue of financial reform. we have been working together on this legislation for more than a year. we have appreciated your hard work and willingness to tackle these tough issues that we believe need to be addressed.

well before the financial crisis fully hit in the fall of 2008, many of us had concerns about increased volatility and speculation in the derivative markets, lax oversight, and the need for increased transparency in the market for futures, options, and over-the-counter products. we begin addressing these concerns by strong bipartisaa legislation that we passed in the 110th congress and the 111th congress. we were for mandatory clearing before it was cool. i am pleased that the house bill reflects so much of the hard work accomplished by the house agricultural committee. we want to make sure that those elements remain in this conference report. i want to touch on a few key issues regarding the derivatives title. first of all, section 716, this is a topic that a lot of folks are talking about right now.

we all want banks to be able to use derivatives to hedge the risk associated with the banking business. i think that is a given. i will let go into all of the technicalities. i think senator lincoln did a good job in laying those out in her statement. for those who have been following the process, they will know that we had a similar committee at one time. it was more limited than the provision put in by senator lincoln. it is a provision addressing that similar situation. during he subsequent negotiations, i had to give up that provision. i am pleaaed that we will have a chance to revisit this issue during the conference. i think it needs to be looked at in additional detail. secondly, forex, i hope this

conference will take the a opportunity to reconsider the excepting of the category of swaps, foreign exchange swaps, from regulation. the president said he will veto legislation that does not bring the derivatives market under control. but his treasury department is pushing for a loophole from the bill's real tory framework. this is the second-largest category of swaps. i think that we need to discuss this issue again. from the house agriculture committee, we focused on crafting a regulatory approach that permits end-users to continue to use derivatives to hedge the risks associated with their underlying businesses, whether it is energy exploration, manufacturing, or commercial activities. they did not cause the financial crisis of 2008. a lot of them were the victims

of it. most end user companies will tell you that they prefer the house language, which obviously we prefer. it is easier to understand than the senate language. a lot of people believe it is too complex in the senate language. but it ensures that certain entities will be subject to mandatory clearing requirements. if we use the house language as a starting point and add some pieces of the senate language, i believe we can craft an end user exemption that will work. lastly, almost two years ago, we faced oil prices of $147 per barrel. the house passed legislation that provided tools to rein in this speculation.

it passed with more than a two- thirds majority, but the senate has not moved in this regard. we also included this in the bill. it finally passed the house. again, the senate did not include it in their bill. i hope that we can get the senate to agree that this is something that is necessary and should be part of this bill. mr. chairman, un die and their staffs have worked together on this problem. -- you and i and our staff have worked together on this problem. nobody got everything they wanted, but we ended up with pretty good results. i look for it to working with you on the same vein as we get through the process so that we can have a strong response to this situation and make sure that something like this is not thank you very much, mr. chairman. i appreciate the opportunity. >> the gentleman from texas.

>> thank you, mr. chairman. we all know too well the great suffering that our nation has seen. that is why it is so disappointing that the authors of the 2000-page text that we were given had a sudden a tiffany and that we have a bill before us that -- seven epiphany --sudden epiphany that the bill before us [unintelligible] it grants unparalleled discretionary powers to the federal government to pick winners and lossrs. the bill unleashes a new and costly army of washington bureaucrats to ban and ratton credit products, harming jobs and eroding consumer rights. -- credibly, there is a -- regrettably, it has a statement

[unintelligible] why else would we enact a provision that regulates the pay of the community bank tellers for the next 20 years and produce of price controls for business-to-business interchange fees. none of these had anything to do with the crisis. the recalls of their financial crisis was not deregulation. it was dumb regulationn the federal government put into place policies that incentive strong mark and mandated institutions to loan money to people to buy homes who ultimately could not pay back the money. several of our citizens, regrettably, chose to live beyond their means. they expected their neighbors who did not to bail them out. none was dumber than that which caussd the government-sponsored

monopoly is that created increasing affordable housing initiatives. thh government said, "we will lead to monopolize as long as you securitized loans for people who cannot afford them." we know the results. ultimately, of the story here is one of executive-cooked books and the mother of all taxpayer bailouts. regardless of the accuracy or inaccuracy of the former history lesson, it protect the system by: exempting the gse's. -- by exempting the gse's.

unfortunately, some bailouts of companies deemed too big to fail by the government will continue. to repair -- many claim thht the bailout mechanism will never be paid for by taxpayers. but these are the same people who worked so many years to protect gse's and then told us that they would not receive one dime of taxpayer money. they are the same people who told us that the trust fund would be paid back. they're the same people who tell us now to not worry about the exploding national debt. they were wrong then and they are wrong now. it creates a huge powerful bureaucracy funded by $500,000 budget. studies show that this new

bureaucracy could cause interest rates to rise 1.5%. new jobs could be reduced by 5% in this economy. i heard this from community bankers back home. i was told by one, "if i have more compliance costs, we will lose jobs." why would we enact any legislation that would harm the ability of small businesses to credit contraction?e midst of a- how many more jobs have to be lost? under this bill, that is simply inevitable. the bid will get bigger, the small will get smaller. it has too many provisions aimed at main street.

the best way to end taxpayer bailouts is simply to end taxpayer bailouts. americans deserve better. >> the gentleman from new york. >> thank you, chairman frank and its chairman died. the oversight of government reform committee has spent much of the last year examining the events that contributed to the financial crisis. i strongly believe that it was our moral obligation to the american people to have a thorough understanding of what causeddthe current financial crisis and how the federal government responded. what is clear now is that the catastrophic failure of our nation's economy was caused by

dangerous and unacceptable levels of risk. there were allowed to build up in our financial system -- they were allowed to build up in our financial system. we need to change the culture of wall street and the culture among the regulators from secrecy to transparency. the the lack of transparency that we saw in the bailout least to distrust which leads to render and we must protect taxpayers -- leads to fear and we must protect taxpayers. it is only a matter of time before we see a ai anotherg, bear stearns -- before we see another aig or bear stearns or

another bank that is too big to fail. the taxpayers will end up footing the bill again. i believe that the house and the senate have made important steps to improve accountability and transparency. that is their duty to ensure that the strongest possible bill comes from this conference. as chairman of the oversight committee, i want to express my support for several of the bills accountability provisions. .

portions are placed within the federal reserve system, it would

have the unintended consequences of waiting imported good government and merit system rules that says competitive hiring, the court protection, federal acquisition statutes, the freedom of information act, and federal ethics laws. we must make sure that all of these critical laws apply to the new consumer protection entity, wherever it is housed. i proudly join my colleagues on this conference committee as we put in place policies that will help fix the financial system and protect consumers. blame is about yesterday. fixing the system is about the future.3 on that note, mr. chairman, i yield back. >> the gentleman from new jersey. >> i thank you for the

opportunity to observe on this conference. i know that we gather here to begin the process to work out phe differences between house and senate financial regulatory reform bill. in my opinion, these bills are so fundamentally with flawed -- fundamentally flawed. without addressing the actual problems at the center of the financial crisis, we could spend the next two or three years working with this base bill and still not produce a document that would be a constructive improvement on the status quo. one of the major fundamental flaws i see with bill is a section that empowers government bureaucrats would so-called resolution authority to shut down non-bank financial firms. the bill's proponents say this will add certainty and staaility to the financial system so that there will now be a potential -- potential tracking of failures.

it actually produces eight certain amount of -- with the proposed resolution authority, creditors no longer will know just how their claims will be treated if the firm fails. furthermore, this section of the legislation gives an alarming amount of power to government regulators and buueaucrats to decide the fate of a firm and its creditors. under the administration, we have already seen the rule of law in this country trampled when the federal government secured creditors in the chrysler bankruptcy in favor of politically favored unsecured creditors. this legislation would codify the ability of regulators to engage in similar behavior going forward, further eroding confidence in rules based economy and sending creditors and investors overseas. not onny that, with the resolution authority and codifying a better deal than bankruptcy for less favored creditors, it gives these firms an unfair advantage over their smaller rivals and increases

moral hazard by encouraging investment in firms that otherwise don't deserve it. this is part of the problem that led to the demise of fannie mae and freddie mac, which were central to the financial crisis. we already heard from the senators have fannie mae and freddie mac were not addressed at all in the democrats' bill, but heating to the by some prominent voices in the white house and elsewhere, the majority did not let this ccisis cutaways, tacking on provisions other than related to the core issues at hand, that will play well for them back at home. thousands of countries across the country that responsibly used to review these are faced with the prospect -- responsibly used derivatives are faced with the prospect of making it too expensive or impossible to properly hedged their risk. none of the end user derivative trades or systemmcally risky, including insurance companies use to hedge their commercial risk and ensure that they will

be there for their policyholders. under the rules proposed by the majority, credit to these firms will be made less available, growtt will be inhibited, and jobs will be lost. why is that? some see an opportunity to simply demonize all derivatives forrthe sake of short-term political gain. i remain hopeful that some of the more egregious derivative provisions can be improved upon. i also hope that it will include -- the provision that deals with 404b. provide smaller companies with a permanent exemption that will promote small business growth and job creation by relieving small businesses from the unnecessary regulation and at the same time add to the diversity of investment opportunities and free of capital by encouraging a greater number of ideas. other folks have talked about

the process, as we look at this 2000 page document. i would ask for a quick show of hands on the majority party, how many people haae actually read this bill before coming here today? that speaks for itself. i know the majority has promised they will open the process, but hopefully the process will improve over the next three weeks. that we conclude on this. every turn, it seems the democrats who wrote this bill chose to endow the same failed regulators with more power and more power. every turn, the democrats chose more government bureaucracy and greater government out reach into the economy. at every turn, the democrats trip policies that will kill jobs and restrict credit. on the other hand, this is not surprising at all. we have seen this before in this congress. we sought with cap and trade,,

health care proposals, among other proposals. on one hand you could say they are disappointed that have not learned by now with all these repeated mistakes. on the other hand, we know that americans across this country are delivering a strong message to those of us here in washington. they want us to listen. they want more opportunity to work for the families. unfortunately, this bill fails on all counts. >> the gentleman from illinois. [unintelligible] >> it is believed congress has

no right in the marketplace [unintelligible] [inaudible] created and unsay fun-in for the growth of wall street financial firms. [inaudible]

the person -- first ppsition will take is to create ua [inaudible] this same strict underwriting standards and consumer protections. [inaudible]

a loan is a loan is a loan. [inaudible] replacing it with an inferior and none necessary -- this was a taxpayer funded bailout.

[inaudible] [inaudible] that is something no one here should support.

if i get pulled over by the police, i cannot say i did not have insurance. no more bailouts for the american people. >> the gentleman from oklahoma. >> thank you, mr. chairman. the legislation we have been charged to reconcile touches every part, every corner of the economy. though its focus is supposed to be on wall street, its effeccs will be felt on main street and every other street in this country and around the world. because of its far reaching impact, it is my sincere hope that this conference will be open, transparent, and productive. in other words, of this congress -- conferences like those we hold every five years in consideration of the farm bill. those conferences are open,

delivered, and frequently produce a decent bipartisan product. the artificial time on the press is reporting raises doubts that adequate time can be given to the copious issues we have to consider. the derivatives issue alone could take montts. there are technical and intricate issues. free, fair, and open debate is a must. i contend that no bill is better than a bill that is rest and done tastefully all to tout a first-place finish in the race to ruin the world economy. if given the opportunity for free, fair, and open debate, i will be fighting to make sure that end-users, those who are not too big to fail, those that did not contribute to the financial risis, are not treated like those that did. in other words, i will be supporting the tenants of the house passed a version of the derivative title, which i might add is the only truly bipartisan

portion of this legislation. if we choose to ignore the pleas of the end user community and forced burdensome and unwanted regulations on companies, capital otherwise used for research and development, infrastructure building and other job-creating activities will come to an end. i received testimony from several of my own constituents warning but this bill could do to them. if the chesapeake energy co. were forced to post margin to hedge three to four years of its production, it would cost them between five and $10 billion. 100 percent son of which is currently being used to find and develop energy reserves. i hate to think what would happen to energy prices and our economy if this present a climate change or cap and tax hit. the natural gas supply association echoes what chesapeakes says. the association states that the force clearing of over-the- counter derivatives could drain

the u.s. economy of approximately $900 billion in productive capital. the companies would simply have to set it aside. instead of putting the capital to work to create jobs and bring down prices, it will be collecting dust in a lot box under the distracted be -- you a washington democrat. the ford motor co. would have to default on $30 billion of existing debt obligations if it were to continue to hedge its legitimate business risk. the job killing examples are numerous and widespread. it would take more time than i have here today to share all of them with you. so i leave you with thiss statistic. a survey of the business roundtable membership shows that if a 3% limited barden report were imposed on swaps currently being traded over-the-counter, 3 directed $6 billion would lead to job loss of between 100 and 120,000.

that is a lot of jobs. in the house-passed version of the british time, we are able to improve area's most important to end-users, the food processors who used wap agreements to manage price risks so they can provide consumers the lowest cost products. end-users should not be regulated as though they are a major financial house residing on wall street. they did not calls the business -- a financial collapse. they should not be regulated like they did. i encourage my fellow conferees to keep one thing in mind as we start our deliberations. do not forget that new opportunities, innovative products and services, and economic growth are born from people willing and able to take risks and invest. we should not attempt to regulate risk out of exissence. thank you, mr. chairman.

>> the gentleman from new york. >> thank you very much, chairman frank and chairman dodd and all my fellow conferees. especially thank you, barney frank, for pledging to make this the most open aad transparent conference process in the history of our country. certainly our goal of protecting consumers and stabilizing the financial system is among the most critical challenges this country faces. as we work to combine the house and senate versions of this financial regulatory reform bill, our goal should be to strengthen consumer protections and market integrity of permitting legitimate financial innovation. the financial sector employs

millions of our citizens and is3 american busineeses, farms, homes, and retirement. in global competitiveness, it helps address the current trade deficit. the financial-services sector is one in which a tight -- a high customers abroad. a successful bill will reduce the likelihood of systemic risk, increase america's and the world's confidence in our institutions and markets, and safeguard americans from predatory, unfair, deceptive, and anti-competitiie practices. we must emerge from these deliberations with ew rules of the road that protect consumers while allowing our financial- services industry to continue financing the creativity, innovation, nd hard work which even in these difficult times may beat -- made the american economy in the of the world.

as chair of the joint economic committee, i have been closely monitored ting the pain and anguish reflected in the unemployment reports each montt, even though employment has increased in the last three months. recent estimates of the cost of the bailout of the financial system are much lower than initially expected. the true cost of the financial system failure has rippled thrrugh the economy, resulting in lost jobs, lost homes, and lost opportunities, and causing in measurable hardship to americans in communities throughout our nation. the reforms we begin debating today will help us prevent the kind of financial crisis that triggered the great recession and ii will prevent future taxpayer bailouts in the future. the house and senate bills have much in common, and i am confident that this conference committte will mailed to good bills into one smart, regulatory framework. both bodies have crafted a

package of reforms that together will lessen the risk of another financial meltdown like the one we had in the fall of 2008. at that time, the federal government had only two options when a large institution began to fail. collapse or bailout. lehman brothers was allowed to collapse and nearly brought down the rest of the market. aig was bailed out. neither option is aaceptable. what we need are additional options, resources, aboard the, and information. if our regulator said had those things in 2008, we could have minimize the ripple effect on small businesses, american families, and the economy at large. both the house and senate bills create a range of tools that can be used to prevent another crisis. they include the office of financial research, a mechanism for safely winding down troubled financial institutions to minimize the impact on the rest of the system, a structure to detect, identify, and monitor a

systemic risk, and give regulators the tools to buy proper oversight of the entire system. a requirement for transparency and accountability for the derivatives market, a consumer financial protection body that will focus exclusively on shielding consumers from complex, risky, antiseptic products and practices, building on the protections included in the credit card act that senator dodd and i champion to and which the president signed into law in may. we need an independent consumer financial protection agency that will ensure the consumer protection is central to financial regulation. in the area of accountability, i am pleased that both the house and senate bills contain language providing that the government accountability office with the authority to conduct audits of the federal reserve. mr. chairman, i look forward to this conference and as we

upgrade the country's 20th century regulatory structure for a 21st centuryyglobal financial system. thank you. >> the gentleman from california. >> yesterday on the house floor, i took the step of noting that the gentleman from pennsylvania was to address the chair and not each other. i did so for reason. this today is the place in which we need to speak to each other, hopefully causing the outcome of a conference with what at least from my son of the aisle appears to be two flawed bills to be better. i may ultimately voted against the final bill, but if as chairman townes said, we can improve further the transparency that comes out in this bill, if we can find places where began make it better in each of our respective sections, then

regardless of whether or not this was a bipartisan bill at the end, it will be a better bill for the american people. i have only been ii congress for 10 years. when i say that back home, they snicker, because i was the guy who was going to go for two, change the world, and then go back to business. but this is a problem that is not republican and is not democrat. this is a problem that whether you look at some of the day that chairman frank had noted, are looking at the home ownership strategy that came out in may 1995 under president clinton, in which he noted that we were already clearly going from private, large down payment to publicly back, smaller and smaller down payment as a clinton who began it, although he may have encouraged it. certainly president bush continued to brag if you will about the highest level of home

ownership ever. so all of us, whether in congress then or now, have sat by and watched home ownership become more owned and less in affordable. in 1959, when six children moved into a 1000 square foot home, we worked real. it was my ferric -- my parents first home. we were moving out of the projects. we had safeguards are of the $2,000 for 20% down on a $10,000 home. that was the american dream, and we scrimp and saved. i watched that. the american dream is not based on being able to afford more expensive house that realistically you should be able to. the american dream is not about being able to get into a home with no money down.

certainly is not about the government becoming a 95% backer of all home mortgages. inherently if the government is the only backer, then the private sector has failed, and they simply are making fees for doing the work that the taxpayers are guaranteeing. that is where we are today. i could very much say freddie and fannie were part of that. the truth is that if they had not made a market for 50% of their portfolio in these bad loans, the private sector would not have continued for so long. my committee's jurisdiction, and what i will be working on if given the opportunity over the next few weeks or months, however long the chairman has indulged us, is trying to put additional transparency into the government side of it. chairman towns that night very much agree that had we had the

transparency, had the last administration een able to drill down into the actual gl location of every home, the homeowners credit worthiness and the present value of the home, when we were talking about toxic assets, we would have been talking with specificity as to their current value oday. that technology was available. foreign governments and even the fdic an fcc now are using one of them, but we did not implement them. we did not roll them out. i hope that as the days go on, we will put transparency as the one thing we can agree on that comes out in this bill, both by the government and by all those who participate in creating financial instruments that ultimately may become the charge of the american people or at least responsibility to oversee. i hope that that is the one area that you will look

favorably to us, trying to prove that part of the bill. we undoubtedly will not agree on whether was 20 years ago, 15 years ago, or eight years ago that we began to get to the ruin of the meltdown. >> i want to announce with the concurrence of the senate chairman of the banking committee that the schedule for tuesday when we will begin amendments ann voting on subjects that we will try to give people notice, unlike the ambush [unintelligible] we will be debating on tuesday and hopefully adopting any amendments to the basic tax title 3, which issthe thrift charter, title 5 which deals

with insurance, title for that deals with the regulation of hedge funds and private equity and title 9 which is credit rating agencies. that is the agenda for tuesday. did you have a question? >> can you just educate the committee here as to what the rules or the procedures are? will be -- will we be handling mr. is like a normal committee? -- will we be handling this just like a normal committee? >> it is a unique american institution. we are the only -- in the executive branch, the president ultimately is the decider. between the house and senate, there is literally no decision making mechanism other than working in out. the rules are that each house vote separately on its proposal and offers one to the other.

the basic text is the bill, and each side can offer amendments to the other. each side could propose an amendment to the base text. the debate rules are fairly free. we have 43 members and i hope we will be able to move it fairly quickly. that is why we have six or seven days of debate. >> it has to be within the scope of the two proposals. there are usually no secondary a group -- no second-degree amendment. >> we do intend to enforce the parameters of the conference. you are trying to decide between 4 and 11, you know clearly what that is. when you talk about language, it is not always clear. we are not going to be talking

of anything that is not within the subject matter. there is virtually nothing in the basic text that was not in one or the other bills. >> i have only served on what other committee, and we only had one meeting so far. so to all the other rules -- do all the other rules as far as me being able to say i have one or 21 great amendments to do, does all that apply? >> it gives a lot of discretion to the chair. have been conferences where no amendments were entertained. what i would propose is, the majority on the side will be able to make a proposal, but i would entertain alternntives ordinance to that.

back to look, having been here all those years. we had eight conferences of this committee in the last 15 years, and of those eight, one had public meetings. no, three did. we were confronted with the congress report at the end and we voted. there were no meetings. this is unprecedented. we have never done this before. what makes a difference is that we never vote altogether for a proposition. you will decide what you want to present to us as the house side. >> each chair will preside over his side. what i will do on the house side

is, we will make presentations. i will entertain substitutes or alternatives, and we can vote among ourselves between the two. that would be the best way to deal with it. there'll be a house proposal that may be offered, and i would entertain an alternative to the house proposal if anybody has one. we would then vote amongst ourselves on the house side, and the results of that would be offered to the senate, and i assume vice versa. >> what chairman frank just pointed out is that so the day before we gather, we go over what titles we will talk about. you are not coming in and wondering if someone is going to spring an amendment on you, so whatever the titles are will be the subject of the debate. we limited to that day and we know ahead of time what they are. >> having done energy and

commerce with other committees in the past, will you announce whether members of particular committees will be considered to be in order for that section? >> that is a very good point. >> in the house, we will announce at the beginning of consideration of each item, we will announce on the house side which members have the votes. if we don't get overcrowded, i would be inclined to recognize other members to speak, and i have asked some other members not on the conference committee, but when the votes come, we will be clear here votes and who does not. let me get to senator schumer now. >> just a question about the notice. will conferees have the opportunity to assist in drafting the position, and

given that the minority have 48 hours -- >> the minority can draft what everyone's to draft. we will make every effort not to be confused with those we committals you give me after the vote has been given to the clerk. the commitment to sharing think this earlier is a nice one, and you people -- we are going to try to have the proposals that the majority intends to offer, but things to be amended and changed. our effort will be to have them available by noon the day before. >> this was submitted and where what -- will we get answers to these questions? >> i did not have a chance to answer the letter and i did not

get 48 hours to answer. the answer is, to that political gesture, i do not have an answer to a letter that he gave me as the conference began. i recognize center schumer. >> i want to begin by both banking chairman don and lincoln for their hard work, dedication in crafting the bill that passed out of he senate. i want to thank chairman frank and your colleagues in the house and just know that coming back to this room brings back many fond memories. i spent 18 years as a member of the banking committee in the house in this room, where in the 1980's we had regular conference committees. they were one of the highlights of my house career. the two bills here have some differences, but they share a basic framework. they will strengthen the safety and soundness of our financial system, bring our markets like derivatives into light and strengthen protections for

consumers and investors. i am confident the conference committee can work quickly to arnelle the differences between the two bills and get the finnl bill to the president's desk in the coming weeks. now, right now we have 9.9% unemployment in this country, -pnot because of the reform proposal that is about to becomm law. some people are saying look what the reform proposals are doing. but because of irresponsibility in the financial system and a broken down financial regulatory system that allowed to many firms and a whole market to slip to the cracks. if we did nothing, we will surely find ourselves in a similar crisis in the not too distant future. there were many causes of the financial crisis. banks built a house of cards on a foundation subprime mortgages and then leverage themselves to the hill before the house of cards came crashing down. they made loans to people they knew would never pay them back

and consumers grant credit card debt and traded their homes like atm machines. but there is no question that inadequate regulation played a leading role in this tragedy. in some cases, deregulation was a good idea and lead to new products ann choices and benefits for consumers. but the cost of having inadequate rules of the road and failing to enforce the rules we did have were made painfully clear, not only in the financial crisis but in the recent bp oil spill. a lack of adequate regulation allowed reckless behavior in the private sector to cause catastrophic damage. like drilling for oil more than a mile under warwater, small mistakes can quickly turn into disasters. over the years, we fool ourselves into thinking we conquered risk and we get some help quantify and manage it. as we have seen time and time again, and as the bp oil spill

tragically reminds us, disaster happens more frequently than we expect, and the damage is often far worse. one of the lessons of both bp and the financial crisis seems to be that at least in certain areas, we should not have a system that encourages companies to go right to the edge of what is possible at the risk of going too far and causing a disaster. after all, just because we can make cars that go to hundred miles per hour does not mean we should not have speed limits. many did not believe in trying to prevent baubles to regulation. they thought that would stifle regulation on the front end and they could clean it up on the back end. the cost of cleannng up upper financial crisis has turned out to be far beyond what was imagined. the cost of cleaning up on the front end start to pale in comparison. faced with something as complex as our financial system with all the uncertainty and the real possibility of catastrophic

damage, it is better to be safe than sorry. that is especially true when it comes to our fragile system. as the new yorker, i see the connection between wall street and main street every day. the financial industry is responsible for 500,000 jobs in kind of fancy, high-paying jobs you read about or see in the movies. i realize the financial system plays a special role, far beyond manhattan. there are many analogies as the circulatory system, the lifeblood. businesses grow and create jobs. that is why we need strong reform that is constructive and forward-looking but not vindictive or punitive. reform that will help keep new york as the financial capital of the world. in general, i think this bill broadly speaking strikes the necessary balance between maintaining an innovative and competitive financial system

while insuring the recklessness on wall street will never again threaten the financial help of americans on main street. in conclusion, we have many tasks in front of us if we are to rebuild the american eeonomy, but a stronger financial system, focused on the needs of the real economy is crucial to that effort. there should be no doubt that part of putting us back on the path to prosperity requires instituting smart, thoughtful, and financial reforms. >> the gentleman from texas, mr. smith. >> as congress weighs the question of wall street reform, thh answer the american people want us to give is clear, no more bailouts. they are watching to see if we will give them that answer. we have shared by passing legislation that bankruptcy is fair, the rules are clear, and

is administered by impartial courts. there is one unmistakable true, free enterprise without the possibility of failure is free enterprise without the possibility of success. bailout cost taxpayers billions of dollars. bailout political officials to choose winners and losers. the possibility of bail else tim's firms to take an reasonable risk. during the debate over wall street reform, republicans have consistently rejected bailout and offered bankruptcy reform as a sound legislative course. we have focused on the key changes needed to make bankruptcy work better when financial institutions threaten our financial system. our proposal has the same rules for all firms large and small. this emanates competitive pressures that cooe from special rules for favored classes or firms. our proposal for him is the use of federal funds to keep a firm out of bankruptcy or reorganize a firm in bankruptcy.

that means no more front door bailout and no more backdoor bailouts. legislation includes only eight toothless presumption that bankruptcy should play a role in financial firms failure. they do not include what is needed to make that preference for bankruptcy meaningful. we can fix that through this conference. hatch from bankruptcy that allows agency takeover firms will become the first option under the bill. when agency's takeover firms, we know they will bail them out. we should also adopt a reform of fannie mae and freddie mac that is the most glaring piece missing from the legislation.. government intervention run amok with fannie and freddie is at the root of the financial crisis. if we leave them and reform, we increase the risk of " rigid financial calamity in the future. we should eliminate all provisions that let political

leaders choose the winners and losers in our economy. crony capitalism can only do us harm. the right reforms including bankruptcy reform will set us firmly on the path to a long- term financial recovery. along -- rolle reforms will kill credit, jobs, and our economy -- the wrong reforms will kill credit, jobs, and our economy. let us choose to reforms. >> i want to comment on only five of the large number of important priorities that i would like to see in any financial services reform conference report that we adopt. first, i want to thank chairman frank for correcting center corker who made the statement that we have done nothing in this bill to deal with underwriting. he apparently was not aware that my north carolina coli, brad miller, and i started to believe some years ago that the housing

and mortgage lending markets were headed for a meltdown. it was 2004 when we first introduced our first anti predatory lending bill to counteract growing problem of high cost lending. in each term of congress since 2004, we have reintroduced our bill. the house passed some version of our bill on at least two occasions in an effort to make the mortgage process simpler, fairer, and more transpaaent, and to align incentives on behalf of borrowers. a lot of the provisions of our original predatory lending will are included in the health reform bill, and some of these provisions are included in the senate bill. the conference should commit to final legislation that makes it clear that predatory lending will not be tolerated and that pon. citizens who aspire to achieve the american dream of

home ownership must not be duped and preyed upon. second, regarding transparency, it is clear that there is -- there needs to be much more sunshine and transparency in the derivatives market. i support the idea that most standard derivatives should be traded on exchanges or alternative swap execution facilities and processed through clearing houses to provide transparency to counterparties, regulators, and the public. if they are going to do if there are going to be exceptions to this general rule, the exceptions need to be for compelling reasons and the rule should be clear to avoid confusion foo well-intentionedd intent on gaming the system. this is a compelling national interest, and for me, also an important local or district issue, since a company in my district runs and helped send --

alternatives what execution facility. third, regarding protecting consumers, let me say that from my constituents' perspective, the establishment of a consumer financial protection agency is probably the most important part of this legislation. i found that few of my constituents understand or care about derivatives, cdo's swaps, or regulatory structures. they said that many of them do not know the difference between the fed, the sec, the fdic, or the occ, but they do know that they want someone to show up to work every day with their primary focus on protecting consumers. our system needs a strong, viable cfta to restore trust in

the financial-services sector. we should work in this conference to ensure strong consumer protections and to preserve the historical an important role the state of play in protecting their own citizens from abusive financial products and practices. fourth, regarding diversity in the financial-services sector, if we are honest with ourselves, the voting rights and civil rights gains we made as a country since the 1960's still have not found their weight to the financial services sector. there is no racial diversity among the regulators. literally any among the board or management of the institutions being regulated, and not a heck of lot even in the employment ranks. some people characterized the industry as "the good old boys club that may be well on the way

to giving way to the whiz kids young boys club." i am especially interested in increasing diversity at all levels of our financial services this conference should not flinch from efforts to promote diversity in the financial- services industry. these efforts are long overdue. at a minimum, the conference could should incorporate important initiatives passed by the house, including the establishment of the office of minority inclusion. i will submit the rest of my statement for the record with unanimous consent. >> the gentleman from new york, mr. meeks. >> i want to thank chairman dodd and chairman frank and colleagues. is a privilege to participate in

this conference committee and to contribute to reconciling the financial reforms bills passed in the house and senate. the magnitude of the moment and importance of the work before should not be underestimated. not since the great depression have members of congress strive to implement such strong unnecessary financial reforms. a failed an antiquated regulatory framework resulting from a blind commitment to deregulation lead to uncontrolled systemic risk and a situation where a handful of financial firms nearly brought the entire american economy to its knees. systemic risk result from size, leverage, and interconnectedness, and as we complete the work of reforming the regulatory framework for financial sector, we must they focused on regulating systemic risk. our work here will only be successful if we effectively+ monitor and mitigates the stemming risk while maintaining a light touch on non-specific

firms ann activities. there are several key areas that plan to focus on in the coming weeks. derivatives, accountability, transparency, and reform. i am concerned that a singular focus on spec lichted use of derivatives will penalize the millions of american businesses that use derivatives -- it is likely toocreate new, unknown systemic risk and put significant pressure on the balance sheets of financial institutions and end-users who use derivatives to manage business risk. i am deeply concerned by the unintended consequences on consumers, the poor, and military veterans that will -- as james baldwin once wrote,

anyone who has ever suffered under party knows how expensive is to be poor. language from the interchange amendment will focus on credit unions and community banks while harming consumers who will be forced to carry multiple cards or abandon the use of cards out right. state treasurers from across the country have weighed in against this language noting the devastating impact on their budget and the ability to deliver financial assistance to working families. the poor alreaay struggling and cannot withstand this 00 assault on their dignity. if america is suffering a great depression, then minority communities are enjoying a great this session -- of great depression. many marginalized communities are preyed upon by predatory

practices from lending institutions. now they paid -- face catastrophic unemployment rates. the house bill included important language for the establishment of minority interest offices and provide assets for neighborhood stabilization for the hardest- hit communities and calls on the administration to follow through on existing commitments to minority businesses. i plan to fight hard for the inclusion of these -- of this language. on the volcker rule, i want to ensure that it achieves what it was intended to. it seeks to eliminate trading that pose a systemic risk. including trade execution on behalf of clients, private equity fund, that provide needed capital to companies nationwide, promoting job creation and innovation. i am concerned about language that limits the imf's capacity

providing global monetary stability. the imf must protect the resources of the shareholders so that a crisis in one country does not trigger international contagion. i plan to work with my colleagues on language -- american industry must act responsibly and contribute to development and not be complicity in perpetuating conflict. in closing, is prudent to look back on lessons learned and implemented from the great depression. during the 1930's, legislation was designed to curb systemic it is time to set the stage for decades of financial stability, economic growth, and job

creation. >> i want to thank chairman dodd and all my esteemed colleagues for their outstanding work on this matter. i am pleased to say that -- putting finishing touches on much-needed financial regulation for the american people and my constituents. while we are in the midst of reforming agencies, i don't want us to do irreparable harm to an agency that currently exists and has existed for years and has been at the forefront of protecting american consumers. it is my firm view that the sec

should retain all the authority it currently holds. that concept is set forth in time of 10 of the consumer protection act. it must continue to oversee and authorize the fcc. looking at all reliable industries, the commission has performed commendably over small staff and with average powers. along with the bipartisan commission of approximately 1100 dedicated employees, spread out across three bureaus, competition, perhaps -- consumer protection, and the bureau on economics. this body has done an enormous

job. the onll agency that has existed throughout the years that is to protect the american set consumer from the ravages we have undergone in this recent recession. although its expertise is deep and broad, the statutory tools under the sec at consist of an antiquated and cumbersome form of rulemaking. it had anemia legislative authority. consumers will respect and honor -- it is critical for this body to support and defend [unintelligible] rulemaking and enforcement tool. that is why the sec must be

awarded rulemaking authority under the ministry procedure act. without requiring prior consent from the justice department, using apa rulemaking authority, the ftc will be able to ddress rampant, unfair and deceptive acts and practices in real time. cordilleras, consumer reporting agencies, professional services firms, and insurance providers, attorneys, real estate licensees, and insurance concerns. our committee has what -- worked

devotedly in the past with members of the financial services committee to bolster the sec's shortcomings, hold out best practices for making agencies emulaae and protecting consumers and improve the ability of agencies to protect consumers by issuing unfair and deceptive rules under the fccc act. i want to thank you for this opportunity and close by saying i am determined to work through this process for the overriding privilege assisting main streets. . .

of this conference committee. and as i listen to my distinguished colleagues, i cannot help but remind everyone that this is a very significant moment in our lives. and this moment will probably never come again, to do with the american people need to have done for ttem. and as the government reform

committee addressed a lot of these issues, we saw people who were greedy. this process, i want to make certain that we do not forget the people who are looking in and depending on us to get this right. we will get this right and we will get this done. i think back a few years ago, we were thinking about creating a transparent market for investors available, without to preserve the american dream of home ownership. the people who were responsible for the current financial crisis. the people that i represent,

they just want to have credit. they are not trying to get to paris, they want to go to the nearest amusement park. they want to know that the government is working for them. and when it comes to consumer protection, that we are protecting them. theyydo not want to feel that the government is working against them. i hope that we will represent the people, no matter where they are, or an urban area, wherever. the fact is that the american people are depending on us and i remember a few years ago, when i was looking into aig, and i was about two feet away from him. he was the leader of the aig in 2008. and i asked for him to provide me with additional information about the retention payments, that he believed were given to his people.

and he responded by saying that 168 employees were going to receive payment, from $160,000 to $4 million. this would be nearly $120 millionnthat would be split in retention payments. and the problem is that this was not the money of aig. this was not their money. we are forgetting this. the lady across the street from me, who is 70 years old and has to come out of retirement to work at mcdonald's -- this is and when i listen, i want to make certain that we keep focus on the people who have sent us here. i agree, we have to look at the derivatives.

we have to have transparency. the person who works out there and goes hard, pursuing the all- american dream, and they pay their taxes and do what they're supposed to do kids and going to the synagogue, we have to figure out, hen all the dust has settled, that we%+ serve them. this is because the focus of wall street -- they are going to get their bonuses. the people i represent will not get a bonus because they do not have a job. and the question is, this storm will be over, but as i say to my constituents, when this is over, who will have their job?

will they have their health care? will they still have the opportunity to take their children to the amusement park. what are they just going to be out of luck? this is our moment. i am excited to see us moving forward on this. i will yield back. >> the gentleman from iowa? >> thank you. i want to commend ou and many others, for your hard work and your dedication to making the bill in the house. i look forward to working with colleagues in the senate. last time i saw you this closely, you were with your children at the ice rink. >> that was a great time. >> i want to associate myself

with the comments made a moment ago and what was just said. this is true to me. the job in congress is to allow transparency and oversight to wall street in the over-the- counter derivatives market for the necessary oversight without hindering legitimate consumers from operating within them. to the extent that the activity is taking place and hard-working americans are taken to the cleaners. we have to ake certain that regulators can protect consumers and that they will be using those tools. congress has pledged that the rules will change, and they are working steadfast for new regulations. we must make certain that american consumers are protected angry executives are held accountable, and we

prevent the irresponsible behavior that brought the economy to its knees in 2008. they will not regulate themselves. we must send a strong message that business as usual will no longer be tolerated and we are committed to protecting the american taxpayer. as chairman of the subcommittee on the farm commodities and risk-management -- my personal history in agriculture provides a with a unique perspective, that i have used in the markets to manage risks and effectively. i will place myself in the issues of the market users as we work through negotiations on the bill to make certain that we have greater oversight and transparency for the derivatives markets as we balance the interest for the neighbors -- for the nation's farmers, as we had operation costs and we

locked in commodity prices for responsible business planning. i look forward to working with all of my colleagues at this table and i will yield back. >> the gentleman from kansas? >> the constituents and the people of our country have been toward the great recession since december 2007, and whether you are a democrat or republican, the regulation f the financial system -- we had a near-collapse of the entire economy, the worst of its client -- the worst of its kind since the great depression. this was the constituents on main street, not wall street. american households lost 14 million -- $14 million in finances, and many were forced to delay their retirements. the ponzi scheme of bernie madoff took $65 million from

the investors. many americans have lost trust in the financial system. we must enact this into law so that we will have our trust restored. the constituents demand a financial system that will hold predatory lenders accountable. the constituents deserve a new system that will protect the rights of consumers and investors and taxpayers. we need a financial system that thhy can believe and again, where every american will enjoy it responsible levels of lending and capital. the house and senate with barney frank and christopher dodd have plans that will make the financial system safer for wall street. these bills do some very important things. this ends the bailouts for the taxpayers and this provides

transparency and accountability, and the oversight of the entire financial system so that regulators are able to address excessive risks before they build to the unsustainable levels. my hope is that we will take the best ideas from both of the bills and put -- lakeside ideas that go too far and may have unintended consequences for our constituents and the small community banks to have nothing to do with the crisis. i want to commend the blue dog democrats that have worked to enhance regulatory oversight, to protect consumers and investors. we are going to continue working to preserve the ability of small business and we will help them take appropriate risks for job creation. and i believe that the final bill will help work on the

this will provide a stronger financial system that will better protect the consumers and taxpayers for generations to come. i will yield back. >> the gentlewoman from ohio. >> thank you for your leadership on this commission. we have the banks that are too big to fail, and those who deliberately or irresponsibly traded the product so that they could bet against this, jeopardize an american pension funds and life savings, and the value of their houses. i want to thank you for making this a public process so that americans can see that we are working on the interests of main street. with lobbying for the lax regulations and continue to do

this today. two years ago, the weight of predatory lending and credit defaults swaps, and the risky bets have finally get -- given way, sending us into the worst financial crisis since the great depression. i made a commitment to central high that i would be reforming wall street. and over the past 17 months i have attended countless hearings and meetings to help craft the wall street reform and consumer protection act of 2009, to restore and strengthen the nation's financial system, to provide america with the confidence that rules are in place. i applaud the senate in moving the nation closer to this reform of the financial service industry. during this conference, it is important to say that the final

bill will remain true to some key provisions. this must create a watchdog with teeth, a strong financial protection agency to protect americans from abusive financial practices to make certain that the sec has the tools to keep up with wall street innovation. we must strengthen the safeguards for the investors by stopping compensation practices that encourage executives to take excessive risks at the expense of their companies and shareholders. and shareholders should also have some tools as well. when the executive pays -- executive payment. the credit rating agency -- they failed to hold up their function, and ttey need to be more accountable for their ratings. if this is to enter connected to fail, in the future -- that will

be wound down in a way that will extend taxpayer bailouts. this is with the disillusioned fund paid for by the financial industry itself. i look forward to a thoughtful debate on these issues. >> the gentleman from michigan is now recognized. >> did sexes -- the excessive risk-taking has affected the economy and puttmillions of americans out of work. and this has diminished to the accounts of millions more. there was no state that was more affected than michigan. that is why it is so important that congress act to protect consumers and make certain that taxpayers will no longer reforest the bailout of large financial institution. i've visited the main street

businesses across the oakland county, michigan. and i met with the small business owners who cannot get a loan to create jobs. workers who lost their jobs and they now know all too well that when greed and recklessness caused a financial meltdown, this will go through the entire economy. i have spent 22 years in the financial services industry. we will make a good return for investors and shareholders. there were addicted to high-risk short-term trading oppprtunities. this was little more than the bets and they do not serve as a

source of liquidity and they do not create real economic growth. we have to get wall street awaa from the casino mentality. this is what wall street reform is ultimately about. the economy will continue to be -- we have to make certain that we do this in a careful and the liberty of way. under the bush of illustration and the republican congress -- under the bush administration and republican congress, we had issues with this and we cannot let this affect the fragile economic recovery that is happening. we have to let the markets create long-term wealth and spur

innovation. the increased standardization and the use of exchange trading is desperately needed. we must also recognize that derivatives are used by companies in the manufacturing sector to heads the business risks and the fluctuation of the exchange rate. we have to make certain that mainstream employers -- we have to get this right. we have to make certain that we will help these firms. they were faced with the choice that no president should ever have to face. they are risking going into aa greater downturn.

the consequence of having fear and uncertainty in the financial sector -- with credit markets seized up, consumers could not finance their purchases. blue-collar workers have lost their jobs. we are ending the possibility of future bank bailouts and this is of critical importance. we have to make certain that the same interconnected institutions that cost of the financial crisis should have to pay back every penny of any shortfall in the troubled asset relief program. the fdic would have the authority to make this and the excessive risk-taking caused the current financial crisis. we would use this to pay off

any shortfall in the troubled asset relief program to make certain that this is made whole. all of the funding will be recouped from the large financial companies that caused a financial crisis. congress has to show that we have a plan in place for the recruitment of any shortfall, coming from any shortfall in the troubled asset relief program, and that all americans know that we have a clear and decisive plan to make certain that the taxpayers are paid. >> the speaking of general statements is concluded, and we will return on tuesday. we have the senate version of this, modified to some extent. we are noting, once again, that this is subject to amendments. we will enforce the rules, for

the subject matter is not within the context of these bills that would not be considered. with that, the conference is in recess until tuesday morning at 11:00.

we had eight of these conferences in 11 years, and six of them came out of the republican leadership of the community. with the exception -- we had one public hearing and everything else was done without any public meetings, at all. we were met with confidence votes for them and against them. we have the selective memories about how conferences are run, without fully getting into the substance of the debate. there has never been anything quite like what you have seen here today. and anyone from the other side that was criticized with this, we had very few conferences. and what we had it -- >> can you clarify these numbers? >> we had a conference reports

between 1999 and 2006. with the exception of this one with a public meeting, one of the bills with all the rest, five of them had no public meetings, whatsoever. >> what was behind your decision to maintain this, myth of prooosing to maintain all four of the banking regulators. >> of all we are trying to accommodate interest, and so forth with the legitimacy of this issue. with the house bill, then we spoke about this. >> we have the yoon -- the weak regulator. we had the merger into the

strong regulator. this will not be used as the under-regulator, that is how you compromise. >> this is a very strong position. >> fannie and freddie, there the first major elements. they are not anything like they were before. we give the bush ad ministration what they wwnted. >> the best witness is mike oxley. he has a view --

>> he has the 1-family salute. >> -- one-finger salute. >> the fact is that they have been substantially reformed. they are in conservatorship. they have been changed more than anyone else in the financial industry. this is very different from what they had before. >> we have the senate debate, they are too complex to put in the bill. -pthey say that they do not want to abolish him. we're putting them under conservatorship. they will requiring -- they were

mandating this in the beginning of the next congress. no one was prepared to outline exactly what they wanted. they are kind of playing this -- >> they have the team effort and we use this with the reform, and no one involved in the production or the advocacy 4, or the financing of housing, the home builders and the consumer groups. this is complicated. we have stopped the bleeding but there is still the conservatorship. the question will be, what is the next step? this is something that they can hide behind because they do not want to deal with this. they do not want restrictions and they want to leave this all on he market.

they want to hide behind this. >> i feel that you were moving in different directions. >> we have not resolved this just yet. >> you have tough regulation derivatives, and i would prefer thhs, and we have the tougher rules from paul volcker. i think that the difference is less than you think that this is. >> and what is the tough version of the volcker rule? >> you will have this come up with the general elections -- this is the final version that you will see. there will be some direction.

>> we have the underlying part of the bill that we can actually have, given time. >> we will not give you the conference report. >> i asked sen. lincoln about this and she said that there were some concerns. >> this did not go very far. if people do not like what is in the bill, i am supportive of this. that is part of having a conference here. >> there are some people object to this. >> i think that we should be strengthening in this. we did that this time with the federal attention.

but the republicans went too far, not just with frank lucas. people are hearing from some of the industrial interviews. >> what did you think about what they had said, that you should all go with the house version of the bill and that this one is too tough. >> we are going to have to work through thaa. we're going to try to get this. >> with all the differences between these major pieces of legislation, we are confident that we will work these out. we have people who are having differences about this --

>> is a your help to keep this issue off of this again? >> there is a strong vote in the senate. i do not believe that we will see this in the house and this will be -- in the reality of trying to get in the bill, there is a lot of controversy. >> what about the industrial provisions? >> i think that there are some modifications that will be coming. >> are there any other provisions? >> we have this on the 22nd? >> this is the final vote and we will see this every day.

>> thank you all, very much. >> thank you. [unintelligible] >> coming up on c-span, a senate hearing looks into the effect of the oil spill in the gulf of mexico. then a briefing with admiral thad allen. later, "washington journal." >> saturday is the 1-year anniversary of the election in

iran. the results were disputed. tomorrow morning, the democracy council will hold a hearing we will begin live on c-span to. >> see what your member of congress says. you can search the chronicle, with the video library. every hearing on the floor of the house and senate ever since 1987. and for a snapshot of every member, the congressional directory, available at c- span.org/store. >> an hour hearing on the response to the gulf of mexico oil spill. we will hear from the mississippi officials about the cleanup effort and the impact on the global economy and the

wildlife. this is an hour and a half. >> i will call this hearing of the subcommittee to order. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> thank you for coming to the hearing on immigration, and the topic of this hearing is called "deep impacc: the impact of the oil spill on states, localities, and the private sector." i want to thank sen. landreau for coming. we are expecting several more senators to come here.

in the interest of time, i thought i would do my opening statement and then i will recognize joseph liebermmn for his statement. and then sen. ensign, and then i would recognize the others. and i would think joseph lieberman, merry land era -- mary landreau and bill nelson, for being here today. and i would like to thank all the witnesses were being here today. i want to thank you for helping us on the subcommittee to help the american people from knowing what is going on in the gulf coast. this is comprised solely of witnesses from louisiana.

we had other is from mississippi, but because of a scheduling conflict, some of them would have to change their schedule and they were not able to attend. we are looking forward to hearing from all the witnesses. we will discuss the impact of the deep water horizon oil spill, to determine the effectiveness of several state and local response efforts. we have the size and scopee we are only beginning to comprehend this. and we are learning the lessons of this right now. we will focus on five main questions. the impact of the localities, and the outstanding needs. how does this impact the states and localities, with the early workings.

this would make certain that those impacted would be able to survive the cleanup process. and how will they clean up along the coast. have they set up a process that is fair and usable for those who have been adversely impacted by the oil spill? 51 days ago, the explosion led to a series of events that have impacted the country in a way that will not be clear to us for some time. eleven people were killed on the oil -- that night. america was grieving and they did not determine the impact that this would have on the nation. there was an effort to play this the impact of this bill was

going to be very modest. this is in quotes. we re facing an unprecedented situation. as we will hear from the testimony of the officials that have joined us today, hundreds of miles of coastal lead -- wetlands have been affected. we have the degree of damage to the wetlands and the damage done to the fishing stocks. the impact of the deep water horizon oil spill is anything but modest. there have been 413 oiled birds, 500 selected, 150 dead turtles,

two mammals, dolphins who died from the spill. and a photo of dolphins swimming through the oil. with 31 other mammals tested. over 78,000 miles or 35% of the gulf of mexico, closed to shipping. many businesses have had to use payments from bp and responding to a spell of this size, the largest in american history, has led to large government coordination. the coast guard declared that this was a spell of national significance. they set into motion several operational plans including

national contingency plans and the response systems. the national response framework. they are issuing federal resources and the department of homeland security, the fish and wildlife seevice, and the department of industry and other agencies. these fans govern the interaction between the local and the private sector entities. there is a clear understanding for every level of government. i want to ask the private sector witnesses to look into the effectiveness of these plans and theeresponse effort. the effort to stop the flow of oil with top kill and junk shot have failed.

there is a cap that is now collecting several thousand barrels of oil every day. this is little comfort to the west coast residents who have watched the shoreline turn black from oil. perhaps one of the most important questions that we have asked today, how will you clean up this inundated area, and how much progress has been made in the clean-up? they have committed themselves to paying to the individuals who have been harmed by the oil spill. 70,000 miles of fishing waters, and the industry of fishing has generated $2 billion annually, and there will have to be an approved plan to put food on the table were paid the mortgage. ultimately, we have that -- we will ask them the hardest question to answer. at what time will bp no longer

be able to pay. i am happy my colleagues have joined us. there are an infant -- infinite number of questions. the people of the people of the gulf coast are facing uncertainty and their employment and their communities are drifting away. -pwe must make certain that the court did response is fully affective. >> let me call in sen. ensign.

>> i would like for you to know ttat this is a very difficult time and that all of you are living this out in your everyday lives, and our thoughts and our prayers are with you. the house and senate have had numerous hearings on the issues related to the oil spill. these have ranged from determining what caused this explosion and what the impact is going to be, and what will prevent the further disasters from happening right now. i want to get something different and unique out of this hearing. this was designed for a very specific purpose.

i want to see if the government is working together, coheeive, as a total force. we have to find out if there are other aspects that the states and localities are needing that have not been provided by bp or the federal government. we have to identify what these gaps are, the best ways to fill them, and then figure out how to proceed. and i want to hear with the others in the oil industry are doing to help with the cleanup . my friend from arkansas and i have worked on many pieces of legislation during our time in the senate. and if we identify any congressional action, as required, this worked very well in a bipartisan fashion. we will do what is required and we will work together to get this accomplished.

the states and localities were intentionally put on the first panel so that we could hear from you and force the private sector entities to look at what is needed. some issues i would like to see addressed. are there adequate resources? and do we have enough skimmers?+ alabama has two skimmers, and the federal government needs to procure more of either of them. if we have others in the inventory, why are they not currently working? i was just watching television this morning about the private sector company that can produce 95,000 feet of the spur day, and they have not received approval for this just yet. this is an issue we want to explore this morning. i want to talk about the request from louisiana.

this is a major stumbling block. and doowe have the manpower helping to clean up the ecosystem? there are stories in the news that say that the manpower is inadequate. if this something -- is this something that would help them? perhaps this is something that congress can be helping with. and i would like to hear about who the rules for the cleaning crews. cleaning crews were said to only work 20 minutes out of every hour. is this accurate and why are these rules in place? and i want to find out about the new effort to review the response solution. what can we hope to see coming from the alternative technology assessment programs? and what will occur -- will accommodate or hamper these

technologies? i hope that we can get to some of these today, and if not, more of them in the coming weeks. i thank you for holding this hearing. >> thank you. thank you first for inviting me as the chair of the full committee, to come by this morning. and i hope that i will be able to return your graciousness by speaking briefly and then leaving this to you and the subcommittee to go forward. i look forward to hearing the results of this hearing. i think that this is very important because, obvious to all of us, this is -- taking painfully long for the oil spill in the gulf to be stopped. but long after they stop this, the communities, and the state and local governments of indiana

and louisiana are still going to deal with the consequences. and this is very important that you have focused your attention, as the subcommittee, on this part of the problem. and as i say this, i want to thank sen. landreau for her work in the subcommittee, the committee she is in control of and a tireless advocacy for the people of her states and the gulf overall. and i welcome the elected officials from louisiana. i was speaking and i said that we have learned of this, when we come from the different states to the senate. when i arrived here 22 years ago, i thought the top person in a parish was called a priest.

but then i found out in louisiana, this person is called the president, but if i may you have played a role during this crisis that has been very constructive. and some of the priests have been dealing with this in connecticut. you have been a principled and compassionate advocate for the people of your parish. it is an honor to have you here. and i will say just a few things. this is not the first time that we have faced this environmental catastrophe in our country, although this is now the worst catastrophe of its kind that we have faced. there is exxon fell levaldez, as was the worst oil spill of its kind. and we are debating the same

issues today. we adopted legislation in response and this has had a positive effect, particularly with preventing oil spills in the vessels on the surface of the water, and responding to the accidents when the oil spill actually does oocur. unfortunately, we did not take all the steps that we may have. we were trying to build a system that could respond to the other risks in this particular area of activity, including what we are facing here, which is uncontrolled, in the deep-water oil well. i think we agree, when we talk about this, we have to say that there have been thousands of

oilwells that were dug, and the safety record is impressive. we depend n the oil hat comes from these oil wells to move the country and toopower the country. but the obvious problem is that the met -- the minerals management service did not require adequate safety and response measures from the oil companies at the deep water level. and this is what we are facing now, and what we have to fix as quickly as we can. there are a lot of lessons that we have to learn. but one lesson that is clear to me, and i think that this is very important, for the chairman conducting this hearing, is that the state and local governments will need to be actively involved in the response planning, for the disaster with oil spills. and as i have said at the

beginning, long after this terrible breach is close, and the oil stops flowing out of the pipes, in that oil well, the people of the gulf will be living with the consequences of this. and what you can help us in doing is to tell us what we can do, which is what we want to do. this is to stand by you, as we help you back to normality. i want to thank you for giving me the opportunity, and i look forward to hearing from you about the results of this hearing. >> thank you for being with us today. the next order, landreau and brown and what would like to do is limit this to 3 minutes, but some people may need a couple of minutes.

>> i will try to do this in two minutes. first, i think what was outlined by you, this is correct about what the committee needs to be focused on. i also want to talk about the leadership of joseph lieberman. we did not exist in the aftermath of hurricane katrina. but when we organized homeland security, we appeal to the chairman of the large committee that a committee that would give weight to local government was so important in handling these disasters, and he stepped up to lead the committee and i am very grateful. i think that the work of this committee -- this is going to be extremely helpful to the outcome of this issue. and secondly, i hope that these presidents, who i know very well, they were on the front line of katrina and hurricane

up, and they saw their people suffer. they are now on the front line once again and they have been trying to explain the many dimensions of this issue. and i hope that today they will be given the opportunity to talk about the balance that is necessary between what you have said, the need for oil and the jobs that they represent, and also the need for of a clean environment so that the fishermen will operate. bed about the six month proposed moratori i will also talk about the six month moratorium and how this will affect what jobs are left. i believe my testimony right there until we get to the questions. i ahere because i care, and thear what everyone is

testifying to. i want >> i will thank you for your leadership and i will defer. so that we can get moving. >> thank you, mr. chairman. also grateful to you and ranking member. i am on homeland security, and i know thateveryone to only is the coastal states suffering, but i reprent e state of illinois, and were sending what help we coast.to the i know that there are national guardsmen coming in in helicopters, the assistance they are giving. on this another effect which deals with our urban ea is going to impt is tremendously in our restaurant business and various businesses, what ise concern about down there inn future, and surly want to

give deference to the distinished govvrnmental certainly want to the deference to distinguished vernnt leaders who are here. we must be sure that we treat s a national crisis. the gulf states are getting the buu all of us will from it. on that, i feel it's astant for me to be here my schedule will allow to bring a message not only to the gul states b from middlerica impacted, and we t our colleuer the front lines the best e with everything we have got overcome thisblem. thank you. >> as usual, mr. chairman, you are insightful to burrowing and wha needs disclosur. i bring to the committ today

the effect on local and state gornment, oils now enterg a waters the orange mousse has ce into perdido pass, perdido bay and the pedido river flows into the bay and then ouin the gul mexico. florida was n notified. the emergency operations center in pensacola was not notified. this all occurred yesterday. the coast gua is doing a great job but they ar stretched to limit. those guys ar working 24 hours.

they barely have time enough to sleep, and it all the more calls for the command and ontrol so that mistakes like this don't keepappening. our local and state officials, as their senator, are bewildered but we are livid that the commanand- so thatii not there ot cing toiois the state and local government. it reminds me of some of the things heard mr. nungasser the past several weeks, as he was talking about the oil and mousse coming in on the wetlands of louisiana.

they were not lees, because the winds took the fresh oil to thee louisiana wetlands. the winds bless us for at least a while because it kept it to the west, but now it is moving to the east into the northeast. when the wind shifts agn to take it to the southand gets into the loop current, it kkys and of the east ast ofa florida n the gulf stam. you are clairvont in what needs to be examined, and just ow that you have some folks in florida that are mad as wet hens right now. we have to get this command-and- control raightened out, where communication is goi to evybody at the local level. >> thank you, senator nelson, and thanks forour comments. i want to thank all the memrs

for being here. whate have now is three nels. a war first panee is the local government witnesses. e second panel- our first panel is the local government witnesses. the thirpanel is british petroleum. what i would like to do is quiikly introduce each one of yoall and allow you to me your opening staments. i would love you to keep your statements to 3 minutes a possible. we will have lots of questions, -pso we really appreciate you al being here. let me oduce the mayor of the town of and isle, louisiana. he has been the mayor there since 1997, as i undetand it. 1995. >> he will discuss the impact the oral spill has had on his counity and the inability of the community to engage i cleanup efforts due to the approval process required to begin any activity. we want to hear more about that. we want to hear more about that.