next will be the president of placquemes rish. met when i was down there after katrina. >> i have been in office 3.5 yes. >> we we down therend saw the imct that katrina had on your community tn. you will discuss the financial pact of the oil spill on your community an your local businesses, and last but not least, marc cooper, the ddrector the louisiana governor's office of holand security and emergency preparedness. thank you all for being here. mayo if you could go first. >> goo morning, senator. i am the mayor o grand isle, on my seventh term.

grand isle is about 60 miles southeast of new orlns. it is the only inhabited barrier island of louisiana. theummertime, we get about 250,000 vacationers, combine to srts fishermen, bird watchers, d visitors cing to enjoy our seafood. most residents ae fisherman or employed byhe oil and gas business. we understand what it takes to get the jobbdone, becau our livelihood dependsn it. if the votes breakdown, or the net net stair, we know how to fix them. if the boats break down or the nets tear, we know how to fix them. in grand isle, we provide 7

it icompletely down. i am looking at picture that brings tears to my eyes. we have been watching this oil cominghrough our passes, which affect by parishes. we havbeen working hard to come in and b t pass. we haveome in with ideas. we came up with the idea of sand bes. trng to protect our people, trying tstop oil from coming on bourbon strt. we came up with an idea to come in withhthe deeperasses. i tell theresident of the united states if he gives us $1 million a day, we can come in and block these bypass with barges. we only have 45 days before a major hurricane gets into the

-pgulf of mexico. i keep loong athat oil and watch it every day, every morning, coming through the passes. or heritage has taught us to work hard, and we are very resilient. born and raised, watching my mother and father lose everything in 1965, watching my father be elected, saying it's ok, it is just material things. anyone in louisiana can protect anybody from hurricanes. you send me anywhere in the world, give me 10 days, i can make a difference with hurricanes. right now my hands are tied. i am dealing with an oil company. we have no say-so. we have the best equipment that can come into our town. different salesmen. 2,500 salesmen come in through the weeks, and billy can tell you, asking us. but i can tell you one thing. we are not going to give up. as of yesterday, we are

bringing barges through our town. i am going to be meeting tomorrow morning in grand isle to make sure they know where to put it. every day i have a mom that comes to me and says mr. david, how am i going to get food to my kids? i have 37 applications right now standing by at the community center as we speak that is still waiting on a $5,000 check. you get a deck hand on a boat that gets $2,500 maybe, and a boat owner waiting 0 a cohen. you have a marina waiting 0 a check. right now the water bill is $5,800 at the city hall. the shrimp dock is a ghost town. the booms don't work. in a major pass, the booms

don't work. mr. senator from florida, this is a wake-up call. what we went through seven weeks ago, you are just opening your eyes this morning. we need some help. we need y'all to push. we need some money down there. and the last thing, our people don't want a free check from the government. our people don't want foot stamps or s.b.a. loans. they want to go on the waters. we still have fisherman waiting to put out booms to scoop up the oil. right now it is coming through our passes. when i get back tomorrow morning, i will have one pass blocked up, and i have four left. i guarantee if i can push, and i am going to make it happen, i am going to block the five passes, get out of there in 45 days, and i will stop -- with a low president bush, i will protect five parishes. we are not waiting. two saturdays ago i got the

fishermen at the dock, and we put fishermen to work. we don't want to be on food stamps, we are not used 0 that. we want to work. i still have a shrimp boat. two of them came from chicago, illinois, two of them made a good living. and you are right. the seafood, what i see here, it is destroying the best see food in the world -- seefed in the world. i give them a credit card for. i fed some febs, i make $513 a week as mayor. i have my own family to feed. i gist talk to the secretary. i can promise you, i will not let no one starve. maybe that is why i have been

re-elected seven times. mary can vouch for that. she has always been there for us. a good friend feels the same way. we continue to fight. i am going to meet with the president today at the white house at 3:30. every time the president came, bp got closer, they pushed a button, and then it fades away. i am hear maybe there are navy ships on the way to scoop up this oil. please send us some help. we are true americans. if i mnd father would be alive, my faub would be alive, i can remember them having an american flag and asking my grandmother why was the american flag behind the sofa on the wall. she said your grandfather was the best fisherman. tomorrow i will stop at my grandfather's tomb and my

father's tomb and tell them that i want to continue with the american flag, that i stood up for my people. feed my people. on behalf of the elected officials of grand isle, we remind you there is 45 days before a major hurricane gets close. major hurricane. it is close. hurricane. we just need your help. it is like a r and we are on the front line. i want to thank u so much. >> thank you for being he today and thank you for that ry touching testimony. >> we aciate the opportunit here today. i wrote a nice speech, and i reit in the garbage this rng. i represent 25,000 people.

i wil talk witt because i have a lot to say. more coastline than any other paris. today over 3,000 acres of my parish is destroyed, not 30 mis like the coast guard says. i started out too into a lot of detail on some things, and last night on a plane, a gentman what to the back of the plane and handed me this piece of paper. he said i work with the coast guard. i am a coastguard official. he said i am bk home in washington, and i wrote ts down for you to say and tell somebody until they listen, because it is not getting done. he said i have been down in the command center in hma for over 35 day the problems at thencident command nter tharesultn a slowing down of this rponse, agency reece -- requests musto through two levels of approl,

first the request waso to the ico comma approval, which typically takes less than a couple of hours. the finavel approval comes level approvaluhc. sometimes it getapproved the next day or the day after. most requests takever five days. this timing is unaccepble for an effective response. when the [unintelligible] spilled into the misssippi river in 2008, the ceo of the commd poss had full authority to obligate andngage funds. why is this not happening now? theurrent federal projects is $150 million, causing it to almo be depleted. theris more than $1 billi in th why hasn't congress allowed the coast guard for borrow from this fund as it did for the

o.p.a. 90 when that barge broke in louisiana? the lack of action by congress has forced the coast guard to ration the little money they have left, therefore slowing down the response. i don't know if that's true, shame on us. i am not here to place blame. i am here to move forward. it has got to change or we are going to loose coastal louisiana. i still don't know who's in charge. is it bp? is it the coast guard. when i get mad enough in a meeting, the coast guard says i can make that happen. when i throw a bp official out of my office, he comes back the next day and approves something. i have spent more time fighting the officials of bp and the coast guard than fighting the oil. we have come up, the parish presidents, with every logical

answer. the boom is not working. please don't rely on boom in florida unless they get ocean boom. it's a joke. it washes up on the shore with the other. we have to find somebody to put in charge that has the guts and the will to make decisions. we are going to make some bad ones, but we are goong to fix them and go forward. right now it took the president of the united states to come down to a proof the jack-up boat to put in the mouth of the refer. when you work 20 minutes and rest 10, not much work is getting done. sometimes it feels like the contractor has more influence that bp has hired than bp and the coast guard. i have sat in the command center in venice when i call him the guy with the red hats

stands up and saysier not going to do that. well, obviously not because his guys are on the payroll. anything that comes through the state or the federal government, he is not getting a percentage of. right now they are building a camp in plaquemines parish for 1,500 people. i tell you there is nothing in plaquemines parish for 1,500 people to do. they were throwing eggs throwing eggs around like it was a jokeeuntil our fibbermen stopped them. we have people in charge that don't know what they are doing. we have laid out a plan for the jack-up boats. that oil spill sits in the marsha, and every day more and more pelicans dive into that stuff, not knowing what it is,

get coated and die. thousands and thousands more birds will die. hundreds and hundreds of turtles and sea life will leave that out in the marsh. we came up the next day with a vacuum plan and have been begging to get it approved. we have to suck it up. there are overseas ships, and some in this country -- we have had people from all over the world see me was bp won't see them with a pipe that will go down 500 feet to get that oil. why aren't those shims deployed? we could get most of ittout phere. the. had to approve the jack-up plan. we begged for the berman plan. although we don't want to see it on the florida beaches, it is easier to clean off a bench than out of the marsh.

we told them from day one you'll never clean it out of the marsh. they said it will never get there. well, it is there. please don't take fly overs of plaquemines parish. you can't see it from the air. you have to touch it. you have to pull into that marsh and see there is absolutely no life. everything is dead. i will make you a prediction. we will lose more coastline from this disaster in louisiana than we lost from katrina, rito, gust off combined. as soon as the grass and the kane falls into the water, the land will watch wash away. how can we sit here and say we are doing everything possible? it is beside me. and i don't know who to blame any more. it took the president coming down to get the boom project --

the berman project approved. i don't know if it is going to take him coming down to get this sucks eequipt. we put a vacuum truck that vackoums out port a otties on a barge and showed that it sucks up the oil. and there is other equipment out there. you have the parish president the running the whole show. bp could fire all their contractors because they are doing absolutely nothing but stroig our marsh. you could put every fisherman to work. this is an emergency. to work 20 minutes and take 10 minutes off? would we do that at war? because weeare at war here. would you say lay down your guns because it is over 90 degrees? we are letting the rules, regulations, the contractors and bp stand in the way of saving our keithline.

the governor went out and showed that the vacuum equipment is working. hopefully by the time i get back this afternoon we will have an approval for that process. but if what this gentleman told me on this piece of paper is true, then shame on the coast guard. they are rationing their money and saying we may not do that because we need this. i don't want to point fingers, but there's a lot of money being spent, more than that berman will cost, that is not going to benefit florida, louisiana, mississippi or alabama one bit in keeping the oil out. it is being spent on hotel rooms, jack-up boats, fly-overs, all the things that look pretty but do not do things absolutely. i don't know if you saw the

crews wiping the blades of grass. that was an insult. does anybody believe we can do that? there are over 100 natural products that could be sprayed to eat the oil. bp is not looking at any of them. we have tested several and made recommendationings. you would think as big a company as they are, they could multitask. the first two weeks we heard we have to stop the leak, then we will worry about the fisherman. i hope the guy writing the check to the fisherman is not the same one. maybe it is. that is why they can't stop the leak. everything should get attention. everything should be worked on at the same time. god knows we have enough people on the payroll to do that. what did they say, 24,000 people? people. inow out of time, and i

wiljust leave you with this. thomas paine sd a century a, follow, or get out of e way. ourell them to ge out of of they are not going to helps, because right now, they e the main thank you. >> thank you for your testimony. >> key state agencies were ineed to be involved cleanup efforts. parisvernor met with t them ino assis impacting tir parishes and to adess the economic issues facing the parishes and their citizens. -- the department of resources and a permant terminal qualities the of pollion

thee in respoe to cleanup. egencies an local used their have expertise to develop innovativ modular process is to protect coastlines which are nimble and qck to deploy. however, unlike other disaster the tate does not have the to independently conduct the sponse activitie is has led to a great deal of frustration, as just dated, as we have attempted to interface for response.ss of june 7, over 13 coastal parishes are affected and we ar tryi to get the exact number, over 100 linear miles of louisiana's coast and coastal are cfirmed to have >> this is measured as i indicated in linear miles only and does not reflect the depth of the intrusion into our coastal marshes. the impact of oil on a beach is vastly different than the effects of oil in the marshes, especially in terms of environmental impact. large areas of state and

federal fishing grounds are -pclosed to commercial and recreational fisherman. less than 20% of our shreveporters are actually able to harvest. large regions of oyster harvest areas are closed. the businesses in support of the fishing industry, other areas of louisiana's economy have been and will continue to be affected, to include, tour itch, transportation, logistics, oil and gas exploration and state brand issues, which is a major concern. much of the coastline currently threatened is part of a very fragile coastal marsh and wildlife habitat system. damage to these systems may require generations of effort to repair and recover and could greatly disadvantage louisiana's economy for years to come and co-jeopardize louisiana's reputation as a sportsman's paradise. it has the potential to severely damage if not destroy

a culture. entire communities have been established around these activities for generations. ddmage to these activities could displace people never to return. a moratorium on deep water drilling will exacerbate the impact to louisiana in that we estimate up to 10,000 jobs could be lost if deep water drilling is occur tail. open 90 identifies bp as the party responsible for clean up. state and local governments developed plans to influence the actions of bp and coast guard to have a more current analysis of those critical areas that need prrtection and implement from a bottom-up approach. but have experienced frustration in having the plans implemented. they require timely implementation, as stated the

dredging of the barrier island. there has been an unresponsive regulatory process. it cannot be over emphasized that it is not only an environmental concern but a significant economic driver for louisiana and the station. governor jindal has made several requests to the federal government for assistance, and while response from the federal agencies have expressed support, the overriding message has been the oil pollution act does not allow the nation to respond for a catastrophic ole spill. we are primarily concerned with the assistance to individuals that can be provided by federal age is his that are in the stafford act emergency. with the official beginning of hurricane season this month, it has become increasingly clear that should a storm threaten to collide with the huge oil spill, there will be unexpected and exacerbating consequences to the waterways and coastal

marshes and inlapped areas of our state. we are requesting that fema be proactive in identifying potential response issues, like preapproval for 100% cost for debris removal. few jurisdictions in our nation have experienced the level of disasters brought upon our state in the last five years. louisiana continues to recover from hurricanes katrina and rita and gustav and ike. governor jindal nor our parishes will not entirely entrust the care of louisiana, coast lines and matches and state and local governments will continue to be forward leaning and aggressive to protect the interests of our state and citizens. the bottom line is this. because of the resilience,

fortitude and battle experiences of these people, pouisiana will recover from yet another catastrophic disaster. this is vital not only for our state and the gulf, but for our nation. the challenge is assuring that our parishes, louisiana and the other gulf coast states are full partners in identifying what works best and that plans that have been identified are flexible scaleable and responsible. and that bp is recentive and forward-leaning in doing everything that is possible to protect and restore our coast and the livelihoods of our people. thank you. >> >> mr. cooper, what i might do is open my questions with you. we will probably do two rounds here. we will do two five-minute unds and try t move to the questions as quickly as possible. cooper, let me start with

you, and you mentioned at the staffordct. louisiana in the process of assistance under the stafford act? >> no, we are not. at this point, the reason i up is that, i want have ay up front that we great partnership with dhs, fema, and the coast guard in planning for hurricanes. what happened during katrina. part of the issue is that we are staffordesponding to time disasters where t response is from the bottom up. as opposedo the top down, and been a frustration. also when you put plans gether, we know that not always been to planned.

we need to be able to change notice, andoment's what we are seeing disaster. why i brought that up about the stafford act. unemployment -- disasr unemployment insurance is something were not able to ativaten this disaster crisis counseling. there is goinn to need to be a lot of that, as well a other assistance. our concern is tha if the system could be more flexible, bter result.a you have seenince 9/11, katrina, we have seen emergency managementn ball. to 1990.goe back there has never been a oil spill like >> one of the challensere is you have a priva company, bp who ultimately has responsibility for most of this,

but then you also have the federal government i very in the response. just tell the subcommittee can about how your state has coordinate with the federal government and wit bp in some of the challenge is gaps thereome of the wor very we. >> one of the challenges is, with the stafford act, were used with -- used a chain of command and unified command. when it goes beyond local capabilities, you asked the for assistance. when igoes beyond the state, u.s. for famous assistance. beee thatnge has e is no unified command. you have command and robert, houma.command in you have bp both in houst, xas. areas whereng there is command. part of the issues just a

identifying where that demand is sometimes decisions take a long identified. when you are getting was that from the federal government or from bp? >> that was from the federal holding b.v. for that.e for paying we appreciate the president for proving that. something we do not have an arkansas. have an oil sll coordinators office. as i understand it, that used to be a cabinet level position. >> with the governor did is move to a canet level position. there are a number of resources e have.e state polic >> in your state governmen are responsiblewho is coordinating, or is it the

state pice through the oil spill coornator? ofl us how thathain the state is required to establish trustees, and i name they incde theepartment of internal -- the pa of walleye and fisheries. coordinator is the primary contact chris marks that is correct. i am going to turn it over to ensig and let him ask the questions. i want to thank all of you testimony, and as got, i thoughtu you weee pretty restrained. expletivesear any and i can understand i am sure of themuttered a few out there. understandle. can somebody walked me through

who has to approve t berms? it took the president -- has to approve the suction, the suction units yoguys have shown on shore. board put them on the get them going. of thesehrew some it sounds like you are having knowing who can approve it. the coast guard man on the grou says he can approve it, but then he goes to bp and it through the b p cin of comman think when we scream loud enough and it's up to averell allen, the coast gua pulls the igger. if funding is a roblem, early in a conference call with admiral alan's, they approved me easothey wld not e berm is because they did not believe it would do keep the oil out. . 2 was because of the cost, d they have imited funds for

this recovery. that scares me, and should not limited funds. making bp but the moneup. we should be throwi everything in the kitchen sink at this. skimmers. skimmers in a warehouse, we are n getting out there to pick up this oil before it gets to florida and other states. here andtting out nobody is picking it up. . .

>> maybe when you have trouble getting something appved,e st put somep oil.tives in the >> shock cousteau's son went for hour and a half and coulnot find anything. iuggested we take him o there and throw him overboard is black stuff him.ing off o there is a new guy icharge of

bp, and i said, "what do you not here?" r crew is out there putting it t every day. they're not picking up the oil, so we just keep adding to it. ere are no skimmer's out there, not thh day before or the day before that. >> the y before yesteeday around 5:00 in t evening, some or-ere t in at of the river. the people it's about 25 of them force -- bp put bout of them in a task force.

one o them climd up the ms. he told me he wantso come home. been going for five weeks. n watching television, s watching the place he makes a living. thfishermen want to come home. he said, c you please bring us home? there is no oil tre. about --maybe between the 25 of u in th last tdays we have picked up maybe a quarter of oil. apparently, bp does not believe oil moved at night. shrimping is 24 hours a day seven days a week. ave left their families, are scared. they are scared to tell bp representatives that we need to go to where the oil is at. we want to save ourwn communit now, the task force behind the

from venice, louisiana. there is a place where locals in the areas. le, the bp representativeof the road the h us, just picture you grandn son or your playing ping pong, and there are about 500 balls coming at you at once. that is what it looks like from the bay. there are 500 ping pong balls of coming, and only one shrimper out there. >> it sounds t me, based on what everything i am hearing, folks note the area the best. you know the lution inhe best. more of that command and control happen perhaps even like what we did senator landrieu during the war.

we had a local troops helping local commanders on the ground. perhaps we neee to set up something li that so that you go have theve to president come down to get some things done. it sounds like you have a lot of solutions that could prevent a lot of this stuff from happening. >> i will follow up on that because tt is wheri o jump off. i do not think weeed any more testimony about the contract in process being absolutely broken. w this. seen it before. weaw it aer the catastrophic kaina. we are operating under a law with some of the same principle raising their again.ad the people that are on the ground either up to their chin in the water, or up to their knees in oil in this case, do not seem to have the resources authority to get the job done.

mr. chairman,ranking member, i tell you how important this partiiular bcomttee is, hy i argued to form it, to staff it, because i fired so time we might need again. well, we ne it now. this subcommittee of homeland is focused on givg government a seat ath table. this is a county of 10 doesn't represent 10,000 people who represent probably largest, most valuable wetlands in the country. i want to welcome t council member from jefferson perez -- jeffern parish. up here, washington knows the difference. down there, wdo not care.

one is a republican. e is a democra they could be brothers in this figh message to washington is this in any way political. this is a nional disaster. it needs to be handled in a much different way, and we have got to do it. our economic and environmental futureepends on it. i also want to ask a question -- billy, you ve had experience in the environmental community, you also know about the oil and gas industry. could you please juss, a minute on the importance, or lack thereof if that is your view, of as move tore oil, ntain the oil, get it offf our march, but how to do at recognizing that half of our family fishes,

the other half is in the oil business. >> absolutely. oil drilling affects a lot of our people. it is going to be a double whammy. the business community in south community came up with 866 man plan, and we presented it to -- with us 66 man plan, and we d it to the psident. 33 men go on for seven days and the other 33 go on thenext seven, you swap out. i have spt hundreds of nights offsre in the oil business. the company manas an agenda. he has to work that rick. he has got to make a buck. that is a dangerous situation. we saw this catastrophe.

it is not the first time there were disagreements abouthe mud what is going on, is it safe or unsafe. seen in the argument personally myself on sho. you put a federal agent out there thatas the right to say, "stock." -- the right to say, "stocp." and you make it safe to come . we all know that people asked to becauseed from that rig of unsafe misspelss. there are a lot of good retired engineers that d love to to the plate. the answer is one person from the right to shut down the rig. overseas, the half a million

lot ofdevice that a people say, and i am not an pert, ty sayt could have prevented this tragedy. lf a million dolls for a writnd we do not require them. -- fover rig and we do not -- upfor a -- and we do not requie them. ask the president to looat these solutions. >> i know how i have gne over my time but i have to ask the have been at t the fight for sharing since this staed 20 years ago. it has been going on a long time. you know the history. andhe chairman ofhe offshore industry started offering louisiana 37%. wanted 100%. we lost it in court. we have been trying desperately

to tell pele that of the $5 by thisproduced offshore but the gets, we getent nothing. one penny of the hureds ofotten of billions of dollars taxes the would have been generate by this oil. could you just comment on what do with the funding if h it? >> psident obama came through and visitedhe island last friday. i remember looking o the back isl to theran north side. he asked me what a tor was and him it was in or drilling -- in shore drilling. when you look at the gulf side, you see a nch of it jacked up rigs.

just talking to thpeople in are and my colleagues, just this one report is the largest the united stas that into the united states. talking to the president last friday, 're looking at 37,000 jobs. there is way in the world we should sttp drilling. i looked at the president and i him, if we are all in class and the teacher is a sin -- is the fussing you, you should not pish all of us. he told me they'reoing to stop the whole and bring it back. -- stocktop the hole and bring t

back. i told my chief of police and my the new board as was beinge second droppedown. i am not an oil man, but i know one thing. when the fishing was bad we could work in oilfield. we need to continue drilling. weave exxon mobi. after katrina, president bush called and askeddhow many gallons of oil we had in it the tank. you could s the ships at the facility, the ships coming in t port that port.

it is very imporrant that we work like brothers and sisters, mess, and weur continue drilling. >> i am trying to get to the gist of the conttol and command, who in charge. what is the recommendation -- do you have a recommendation? during katrina, i saw a man come on televisiod say we are this and we are going do that. and do you have someone like n there? >> we ed somebody on the ground to kick some tt and

make this happen. we have st the battle but we can win in the war. we can save our heritage, but it has to happen quickly. we need someone with auority to mobilize all of the equipme necessary, wherever it ma be, do what ever it takes to keep the oil out, to do what ever it to pick it up, and to have the heart d the comssion to do it. whether that is somebody from the coast guard -- do not think there is a person from bp who has a that will and that direction. >> [unintelligiblee >> absolutely, and the president admiral allen that he wants ground who can make decisns. >i am still sitting at the table bp and the coast guard, and

looking back and forth other while the oil continues to come in. i am with you. i believe one person that is responsible, and we get this thing kicked. we can do it, and we are willing in any way shape or form. i will rn over all of my as parish president, i will spend 100% of my time on this. >> you are making the recommdations. evidently, the recommendations areitting the bureaucracy. >> they cannot make bp do it on a local level and it takes five days to get up to admiral allen. that is the problem. somebody on the ground has to be able to make strategic, fincial conclusions quickly.

we cannotait now, of three weeks, to make a decision. get in the room and say, what is the best way to go after this? we need tottack it wth all forces. ifdmiral alan says a guy has authority, they are not using it. they ar not using it to solve the problem. >> also have a little bit of experience in decision making and government. somebody has to take charge of this thing. i do not ow what authority we have. i donot think we do, even as homeland security. let usove today to put in charge dwn there.

>> senator, you have hit the nail on the head. what is the problem? the proble is command and control. give you an exampl a week ao i went to te in mobile,+ma alabama. they have jurisdiction over misssippi, alabama and florida, all the way over to the area of florida. now, what i wasold wa pepper -- was that the coast guard was 51% in command and band the st. then i was told that really the is 55%n command. well, that is the problem. nobody is in charge. now, there is a way to solve is, and i donot want to sound record, but the controlommand and capability in the world is the

united states military. and you have got toive somebody with a clear chain of command that al hashe capability of bringing together parties, pvate- sectornd public- agencies, and directing them to do, of, cleaning up a problem, and hhve some authority to make it happen, and have the resoces, and that everyby ows that it goes straight to the commder in cef. until you do thhs, you're going have the same problem that you're having. you're goiig to coin to have same problem that florida d yesterday', not even being in . lop, when in

fact, the orange sluce is coming to florida waters. you can lead a horse to water but you cannot make him drink. how much more of this do we ve until a command and structures changed? youannot leave bp it corol becaase they a not going to get it done. and you cannot have this kind of delay that is goi over and over until somebody with authority, such as mirable allen, approves it, or when they senator andr weething gets done becae start rattling the cage. this is the long and short of it. th thing is going to go on for me time cause as much oil as is out there in the gulf, just think of thefar reaching

efcts when the wind sarts ifting and it goes in other -pplaces. all are just brown. i would hope that somee would listening to the pleasf fhermen, and the of the local officials their senators change this command structure. it does not mean that the military have to be in charge. it is setting up the command structure and having people responsible for that command structure. you cannot split 51%, 49%. at just does not work in a like this. otherwise, you have got -- which you all pointed out -- people out there wiping off the place t marsh grass. d that doesworking off rur coas?

>> there are companies that do really monitor -- all of the

nonprofit that ms arce startedd the -- msrc started right after the exxon spill that watch for l leaks and contamination. for anotr day msrc group was heavily funded. i did a response gro in texas that was done a first-class. it was avily funded b the oil companies afterxxon, which has absolutelyo assets. th are down there, but in name only. they are not eqpp for this. that needs to be looked into by this group because they were not rdy for this. th warehouses were empty that

be full of booms and so on ando forth. >> they dri in internional waters and that is why we do not have that authority. >> thht is what i was wondering. i just did not ow. >> coulyou clear up something about the berminhe barrier islands? need any more approved? >> yes, sir in red are the ones not approved. in green are the ones approved. >> why are sooe not approved? >> that is a good question. the corps of enginee is still answerg questions about the environmental impact of current flows and ridiculous questions. we hope get started on six and have them approved before finished sox are that we can move right to them.

we he to build a whole thing keep it ot. >> isn' that a huge -- this is a huge issu,this getti to the marshes, isn't it? >> if wwould have built this asked for it, those pelicans that died, we could have collected all of that oil offshoreand those four hundred that are dead, that been prevented. >> to be clear, this is not something that bp can do, the toeral government has approve this. >> the federal government ordinarily would pay for it, but t president of bp saw it, he aeed to pay for it. >> what is the status on t guard?nal how many arehere and what are they doing? >> i do not have the exact number, but ove1000 have been

deployed. they are doing a number of things. they are assisting in building land bridg. some pictures of that. >> b you need a lot more down ere is the bottom line. >> keep in mind that we are starting hurricane season. we talk about not having enough personnel to responto that. if hurricane were to come hit louisiana or any nearbytate, o further it into the marsh lands, and if there are not enough persoel or poin how arethis ve enough if we get hit by a hurriccne? that is why the national guard to.he g they are doing a number of thing and thee would certainly on more of a rol if hurrane or to hit. >> there are backing -- there

vacuum -- there are vacuum trucks out there oil.ming upn the >> we altered the coastal plan make these firms and that enough, yet big enough to give us a fair chance keeping the oilutf our marshlands >> i hope the admistration is listening so that they can get e on this and get that approved. >> the parishes to the west need protective measures so th of a hurricane comeshrou they are protected as well. >>ust a couple of qui points. the burns that are in place now

ber -- ms -- berms that are in place now are there because of the president directethey b put there. i think we should give obama credit where credit is due. thcoast guard is the military. they useto be in the dertment of fense until we in congress moved them when we reated the department of homeland security, so this is an issue we have to discuss about now hoto fure this out, whether the coast gua should be consered the navy or the army. i do not know, but weve resolved today that the command structures are broken. to fix this, we ned more discussion. finally, and didn't bp give

every state $25 million? and if so, could yyuust briefly say how you are spending that money? di everyone get thatmount, mississippi, alabama and florida? >> i am not sure about the ot states. in our ate, each parish got $1 million. >>nd each county did. are you going to send any of that to the parishes? >> absolutely. we want to make su that the paaishes are supported. t at we do not want to do -- we have the funding avlable to assist us asell as the parishes. we want to make sure that bp is responsible to the parishes. >> billy,ave u spent all of

your mlions? >> we are about halfway thugh it. we are spending in rescuing animals, putting out booms, and th we have also built a potato bridget t protect the oyster beds -- potato bridged to protect the oyst bed >> you bought a bt at has been very helpful, which is good. we have got to get more money flowing down to theocals, and i will wait for my next question. >> iijust have to say, w ha got to get somebody in charge down the. >> i do not care who is in charge. i want somebody with some authority, and it cannot be bp. by the wa the coast guard was

not a part of the department of defense. it was a part of transportation. when we reorganized the department of homeland securi, we put the in there. now, it is fine to have the coast guard in charge, given the fact that theyave so ma other responsibilities around the world. if that is what the decision is, that is ne, but thpresent stem is not working. the decisions are not timely.. the resources e not produced, me with no command ande a big control. that has got to change. correct thank to our pat -- >> iwant to thank our panel for

being here today. we are going to keep the two

lls. is there is a vooing on the floorrof the house so we want to get underay and the acknowleddement and the regnition that the house side. we will beginhe opening senate's on the house side- opening statements on the house side and i will nominate chairman frank as the chairman of this conference a perceived

the order we laid out for opening statements to be made pot of ourolleagues, those of yowho are interested in making statements. if the mistake at the outset that this is not a terribly common occurrence to have conference committees like this this conference committee ion -pc-span. this may be the first ti we ever actually had a census -- a committee conferencen c-span. the text of the base deborah will be considering over the coming weeks is on the website banking.sentate.gov. there is a side-by-side comparison of the two bills posted. you can certainly have a look at the bill and aide-by-side comparison of the two pieces of legislation through the two bodies. i will make a few opening comments and turn to senator

shelby. we will go back and forth based on sincerity -- based on seniority. let me begin by thanking all of our colleagues that have been involved. this has been a lon couple of years as we have gone to thomas hearingsnd meetings, formal and informal, toermine what course to follow to resolve the financial services reform that the country so desperately needs and anxious to have. i thinkhe public responses to this over the number origs have indicated strong support for theroducts to support. not univers but strong. colleagues for the job they have done. i went to thank my colleagues on the banking committee, republicans and democrats, who worked long and hard on this pr.

>> i think all of my colleagues for their work they have done er these many months as we try to tackle the tough questions and how to create a financial regulatory structure to protect our economy for years to come. we know what is at stake. the nancial crisis has devastated millions of our fellowitizens. we know that the gears. and they deserve being reated. 5 million of our fellow citizens have lost their jobs over t last several years. 7 million homes have fallen into reclosuror near foreclosure. millions more were told that their retirement savings are ped out, some instantaneously. there has beeis directing loss of wealth in the nation. trillions of dollars of lost wealth and income that will nee be made up. bossed home values may never come back. tirement savings are gone in a

flash. there is aot of ttlk about the doubt. we will see the stock market comeback in my view. we are seeing some positive signs. portfolios tbe strengthened again. for a lot of middle-class families across the nation, they will be feeling the blows and loss of these four years and years and years to come. these are problems we cannot simmly walk away from. we must act in th congress. the central question we must address in this bill is how do we restore the fai and confidence of the american consumer? th core strength of the american economy is that people over the years have had faith in our financial system. th faith has been shhttered in this crisis. the fundamental job that we have is to do our best to bring back confidence and sense ofptimism back. to do that, this legislation focuses on four major areas there has long been agreement on these areas between both

parties. the bill wou protect consumers from products such as some pride mortgages that led to the crisis theirst place. it will and bailouts ensuring that failing firms will be shut down withoutelying on taxpayer bailouts and threateng the fragility of the economy at the whole -- as a whole. it will create warning systems so theres always somebody responsible for loing out for the next large problem as it will certainly come. it will ensure that all financial practices are exposed to some level of transparency so that exotic instruments like hedge funds and derivatives to not work in the sws that businesses caa compete on a level playing field. most importantly, it will restore our financial security so that our enomy and create jobs, awful their -- offered middle-class familieshance to rebuild. we can produce a final bill that will incorporate the strongest ements of both packages and

ll become the foundation of our financial regulatory structure and -- structured for decades to come. it book continued to be the envy for the world. barney frank and i have agreed to contie to this cference the open, delivered, and transparent process. we have advanced this legissation over a number of mohs. there has been and connues to be a debate from the origins in committee the debate on the nate floor. we extend ou hand to the members of both party and include their ideas in legislation. you ccn go back all the way to april of 200 when our staff first presented our ids at how we would likk to go forward with legislation. swiss have held dozens of hearings tdeath and many of you have participated in some degree. after i presented the first discussion draft of our proposal in november, i signed bipartisan working groups to attack the

major issues in our bill. i until a new proposal that incorporated many oo those bipartisan ideas through those working groups. beyond that, i have worked every day to keey colleagues informed every step of th process. th bill is the product of collaboration of many colleagues before debate even began on the floor of the u.s. senate. that debate lasted nearly ur weeks and some 60 votes were democrats and republicans. one of the many that passed was the in shelby-dodd amendment. we were able to and bailouts, one of the most contentious ises of our proposal. this conference represents an extraordinary time in the banking committee. we are currently part is putting intoonference is at once. this bill and the house foreign affairs committee and the iran sancons legislation. the last time the conference was held was 2003 for the fact tax. only one of two completed in e

four years that my good friend and colague from alabama was chairman of the committee. continuing that spirit of bipartisanship, the minority is as revant as they choose in these discussions. i wcome constructive input so we work to finalize the essential rorms we need to ensure the long-term stability of our financial system i do not want to see this bill weekend at all. chairman frank and i present this before you. it is essentially theenate bill would valuable additions from colleagues from the house. the text it the final word. it is a jumping off point for wh i expect to beea serious and thoughtful debate conduct this is a conference committee. there are parameters in terms of what is and not within the scope of the conferee. what is and is not germane. i would expect changes to be made in the it is our intention that this conffrence is done openly as poible. we want people to know how we are proceeding and people have a

right to know what we're doing, as well. we are continuing to place this deba befe the public which strengthens the case for our strong financial of reform proposals. many expected the bill to be watered down. that is not what happened. the issues were dated on the senate floor and colleagues votedo strengthen the bill and add reforms. it i our hope this conference is the same result. a warning to those who hold hope that we will let our built the weekend by last-minute lobbying blitz is, this bill made so strong over the course of last year will not t weekend in e last throes of this debate. this is a strong bill and it is time we get it to the president for his siate. as we sit he today, the rules of wall street have not changed. e same turmoil we saw in 2008 could emerge agn. consumers can still be misled

into abusive products. the shallow baking system still operates in the darkness. taxpayers may ill on the hook as major instituttons threaten to bring down the economy once again. the uncertainty in the economy continues. not just in the recent latility of t stock markets and the contind strength in the capital markets but in the difficulty in perspective -- a prospective home buyer faces when getting a mortgage o a recent college graduate faccs in finding a job. for those who think these problems can only appear off month in a generation or longer say there is no urgent need to act. when did not have to look as far as europe to see the threat of financial instabilitt. we will cplete our work in a smart indeliberate fashion so that chairman frank and i have commted to work with our colleagues, democrats and publicans, or the coming da and weeks and weekend if necessary toch an agreement on a good piece of legislation, a strong piece of legislation,

that restores confidencend optimism and security and stability in our nation. failure is not an opon. with that, i see the arrival of my colleague and friend from massacsetts. chairm frank, let mece before turning to my colleague forn opening statement. to have to it on this? >> i want to nominate my fend to be the chairman of the conference. i will not make a long winded speech. i think you haae done a great job and i think you will be a valuable and orthwhile chairman i therefore dominated -- i therefore nominee barney frank to bchairman of the conference. >> thank you. >> is there any debate about the nomination? ayes have it. congratulations. here is your gavel. [laughter] >> i will put forward as a major

qualification for this job my impatience. i thinit will serve as well houp votes on theefha bill. i will go back and get oneas vote and we will then go back and i assume proceed with the senate statements and en the house statemts. to echo with the senator said, this will be an open process. pele he conversations in various ways but we are th committed and all of us will agree, nothing wl be put into this final bill that is not openly debated and subject to amendmt by the conference process and voted on. the conference is a unique american instituti. we are the only part of t world that has general -- genuine bilateral listen. there is no decision making mechanism in a binding way the

way there is and other entities to make decisions. that requires a degree of give- and-take and conciliation. i believe we're all committed to making that work. than you and i will be back after every self any doubt that i am against oil spills. >> >> we are in e same situation. before the senators go with their opening statements, could i very briefly make mine. >> i have made my statement. >> i recognize my friend and colleague and chairma-- fmer chairman. >> thank you. will have profound effect on our economy and the living standards come. much has been made of the ball

straight vs made straight narrative by some y colleagues it has been my experience over the years thatall street tends to take care of itself. whatever congress decides to enact into law. in other words, ball street does not need democrats or republicans to protect its financl interests. th will do that on their own. there is a history of that. what congress needs to do is to make sure that wall seet is functioning and support main street ability t createobs and grow the economy. we should also ensure thatall street is ever again the beneficiary of a taxpayer bailout. unrtunately, i believe the drafted bill before the nferenceommiee undermines the former and virtually ensures the latter. before we are de, i would like to see this conference produce a report that will protect consumers and andailouts for good and promote economic growth and strengthen our financial system while preservi its competiti edge

in theorld. if we accomplish these things, it does not matter to meein the slightest whether wall street likeit or not. i woulde happy to support it. befo thoss goals to be realized, the senate and house bills each require significant changes. before proceeding to some bu substantive concerns, i wanto talk about the process that has3 our host today has emphasized his desire to make our deliberations open and transparent. he reiterated that. in resnse, the senate republican colleagues and i wrotto chairman frank and dodd expressing our strg desire for a completely open and transpenconference. i do not believe we ever received a response to that letter. perhaps we will today. at this time, i would like to knanimous consent that are brought letter be made part of the record. >> unfortunately, it appears that we are off to a rocky srt because the basic text before

the conference was negotiated and compiled behind closed doorr without any republican in fact, we only received about two and a half hours ago. i suspect and i hope i am wrong that there have been aumber of private meetings wh legislative language has bee courted and drafted without any public access or republican input. it appears to me that the only cet of this congress that will be public is when the republicans get our one and only chanceo amend what is alrey been decided by democratic colleagues behind closed doors. we both participated in many conferences over the years and i fully appreciate th position any minority party that reaches the stage. i believe if we continue to proceed in this manner,nn further assertions of openness and transparency will be a fiction and meetings le this one will only serve as political

theater. while i have no illusions we will have this process is how to unfold, we should at the very least be honest with the american people about what is happening, where it is happening, and who is making those decisions. i would like to say a word about our time line as well. the new york times reported that chairman frank was urged by the administration to produce a nferce report by june 24. that is from the ti the president is expted to lea for toronto for a g-20 meeting. such target is ambitis. while we mmy complete our work, i would hope that we could all agree that our schedules should be dictated by the needs of our financial system, o economy and the american families and businesses that will be touched by this legislation and not by the arbitrary time lin orhe president's travel plans. befo this bill can achieve the goals that i have enunciated, i think it is to behanged versions of this legislation are

incomplete and unnecessarily overreaching. both the senate and house bills thheavy lifting touture study and will writing by a host of new and existing regulatory bodies. most of those regulators are the me ones w tragically ailed us in the run-up to the recent financial crisis. but the remind my colleagues that one of the main objectives of this legislation was tolug regulatory gaps and streamline our regulatory structure. yet we still have the fed, the fdic, the occ3 them will expand and power and scope. these s also add new lette to alphabet soup. so much for streamlining. this legislation reflects series of deals made by the executive brch along with the

existing financial regulators who failed to do their jobs during the last crisis. the bill we are considering is filled with undefined terms leading up to the film regulators to deeerminehether a company is a threat to the financial stability of the ited states or is in danger of deult. therefore eligible for special resolution proceedings. these are just two of the vague and undefine ttrms with in this bill. i am sure there are others. the mostgregious example of why this legislation has to do with absolute neglect of any series treatment offthe government sponsored enterprise as we know as fannie and freddie. there were intervaa players a the collapse of the housing market that precipitated fear, panic, lack of trust and aaa ratings and ultimately the freezing of financial markets and economic activity around the globe. the ensuing crisis led to the destruction of millions of jobs

for americans and the evaporation of trilons of dollars of household wealth a retirement savings. to date, the bailouts have cost the merican taxpayer rouly $150 billion. i believe it imply a failure of will that nothing is being done to reform the gse's cap all losses. the open with the america peoplebout what you are refusing to address this core issue. another major component deals with the cation of a massive new consumer bureaacra all along with a separate title 1 which i believe is it liberal activist dream come true. and provisions will cpel financial institutions to provide freeervice to selected community groups pontiffs paul census model that .

because the democrats' new bureaucracy is an enormoureach across every segment of our economy and a massive expansion of government influence on our daily fincial lives, republicans only ask that this budget be subject to congressional oversight and reviewed by theegators charged with ensuring theafety and soundness of our banks and banking system. the democrats' response was a unanimous know. the american people have been clear. they do not want a massively intrusive and continuously growinggand overly expensive government. we allo favor consumer protection.

this legislation promises to be more interested an protective. aside fmhe conmer regulations, and other means or this will slow economic actity is the trend for datives. the legislation would send nancial trades overseas. it is about magnifying. because risk management will now be significantly more expensive, we an expect lower business investments which means fewer jobs. i do not understand why we would want to increase costs for ordinary and users of derivatives suchs her home heating provider or makers of candy bars to name a few. many end urs will find themselves subject to clearing mandates and capital requements and eensive dealer-like conduct requirements. as a result, main street businesses will face higher

costs that will ultimately bb bornby the consumer. the treatment of deratives in this legislation will work a an anti stimulus plan pooling resources out of the economy a hurting growth and slowing j creation. this result would be unacceptab to me and should be unacceptable to the congress. most of the house bills differ on how to handle limitations on the protary trading activities of financial institutions. sometime in the future, regulators are to consider implementing a vague notion called the volcker rule whi i call the volcker concept. it is merely a concept because there is no rule accepted. despite assances from high- ranking tasury officials that clarity would be provided on what constitutes proprietary trading and what does not, no such clarity has been ovided. this is an area that should be addressed with some specificity.

this bill will grant discretion to the regulators who filled us the last time around and hhve yet to account for past lapses. theegislation offers concepts but no definitions punts on the hard decisions. as everyone here that has been paying attention to the causes of the financial crisis is aware, the rating agencies favored to their fees and market share over their franchise reputation as highly creditworthy would proveo be junk securities. the legislation introduces concept of increased oversight and speaks out against conflicts of interest. what this willean is presently unclear from the bill. perhaps more hearings on these matters would have been lpful. the aaa ratings assigned to mortgage-backed securities and a book many in the shadow banking

system to effectively create money and fun the operations of financial institutions to the tune of trillions of dlars per day. as interval as rating agencies were to the recent financial crisis, i think it borders on malpractice not to addss rating agencies more serious. from the beginni of is process, i he maintained the same position. we need to determine what went wrong and whether it could of been avoided and whether anybody should be accountable for their actions and if we need to change the law to prevent such a crisis in the future. i have said many times throughout the past 18 months that i believe we have not done the necessary diligenceor such a significant legislative undertaking. every member of this conference and knowledge that fact. we bically subcontracted our work to the financial crisis inquiry commission which we all know it does not complete its work until the end of the ar.

the legislation more often than not cause for long adjustment periods and periods of study and more time. this is the time we should be using to determine t best way forward to ensure the future vitality of the economy, the competitiveness of our fincial system and the financial well- being of the american family. throughout this process, i have encouraged my democratic colleagues to focus on the root causes and resist the ue to exploit the crisis to enact a wish list of extraneous speci interest positions. it appears that the majority is going to impose theirill and this bill will become law. the american economy will once again become the loratory for another grand democratic experiment in grand -- big government. i am afraid th the prognosis of the economy i not good in the significanchanges are made. >> thank you.

i want to thank the chairman and other colleagues who have worked so hard to bring it to this point. i strongly support this important legislation and the reforms it will bring to r financial system. i have long advocated for comprehensive and effecve financial regulatory reform. we held many hearings and the oversight committee investigating the causes of the financial crisis. we examined the collapse of lehman brothers and aig, a conflict of interest that affected the credit rating agencies, the unconscionable packages awarded at countrywide, meill lynch and citigroup. and the mistakes made by alan greenspan and other regulators. those hearings showed government regulators were asleep at the itch while wall street banks drove our economy off a cliff. change is necessary and i beeve this legislation to

strengthen the federal government possibility to prevenand rpond to future crises. there are a number of issues at are imptant to my current committee, the committee on energy and commerce. we have consumer financial protection, regulation of electricity and other energy markets. i strongly support a new consumer finance protection agency that is independent, has strong role making and enforcement authority and has broad jurisdiction over the entities that provide financial products and services to consumers both for the house and senate. our challenge will be to produce a consumer financial protection agency that h all of the tools it needs to be successful. our economy and ouramilies across the country are suffering from the abuses of wall street.

our job is to prevent these abuses so the economic security, hard-working americans will never again be held hostage to run aw corporate greed. if we do not pass legislation, will be in a situati where we have delated the authority to the private sector, to wall street, to the vy people that have got us into this probl to keep doing what they think is appropriate ratr than what is appropriate to the est interest of the american public. i look forward to worngith mike -- my fellow colleagues and looking forward to getting successful legislation and i hope it is bipartisan. on occasion, it has happed. thank you. >> before barney comes back we have a vote in the senate comi up so we will cover as many as these as wean and switch to your side, as well. i will turn to my good friend

arkansas. senator blanche lincoln. >> thank you. i want to thank cirman bob, as well and all of our cleagues in the senate and house. i cannot overstate the significance of what we areere to do today. fincial market reform is the single most important factor in our long-term economic recovery and it will be the foundation of our nation's financial future. i am glad we are binning with a base tax that is well over 99% of what we had in our senate bill. only small technical corrections that are there and we are excited to begin with that product. everybody recognizes the importance of the task at hand. nobody more so than the hard- working families of each of our states and districts as well as3

street and the important role that this place on their behalf. in 2008, the economy was on the brink of collapse. the greed and excess on wall streetpiraled out of control and small businessss were left to payhe price. amera was held captive by financial systems at were so irresponsible that its faire almost destroyed our economy our y of life. sie 2008, which have been estling with how to fix our bren financial regulatory system. i would like to thank those individuals who have been workg on isegislaon for close to two years on the outside, the treasury, the regulators, and all those who are fighting for reform. there is so much common ground here, am very optimistic that we are only weeks away from makingghistory and i look forward to qui resolving our differences. we have a historic opportunity to reshape how the business of finance is conducted in the u.s.. not only to do with here but to

provide the leadership and example globally. to ensure both prospery in the coming decades and studied -- ansafety for consumers. to ensure that we as a nation lead the world as an example, to ensure that our regatory system matches the 21st centur innovation that exists and is able to adapt and keep pace with the innovation of the future. we are here to tackle complicated problemssand find resolutions. crisis, the american people deserve historic reform of their financial system which we are poised to deliver. i will mention a few pragmatic ways in which we can aure that wall street no wonder benefits while main street suffers. at the heart of financial relatory rorm is the over- the-counter derivatives market. within a decade, this market exploded to $600 trillion notional value. we must bring transparency and

accountability to these markets. clearing exchange tradinare at the het of reform. migating risk, reducing leverage and enforci transpency. it is critical that we maintain those provisions in the final bill. the senate bill also requires reale transparency to the robust transparency, the markets will not function and the regulato cannot do their jobs. information is powernd real time transparency gives this power to tho on a straight and acrossmerica. it also requires swap leaders to put pensis and university endowments before theiown. senator shelby and becky -- rep baucus are well aware that swap dealers have taken advantage of miss fatalities all over the u.s.ncluding jefferson county

alabama. the senate version addresses this problem by helping o pride demint street the same protection that otr investors -- investors already receive. we also have to ensure that we aduately addressed institutions that have been emed too b to fail. under our current system, there are a handful ofig banks that are simpl no longer acting like banks. five of the largest commercial bankaccount for 97% of the coercial bank notional swap activity. that is a huge concentration of economic power. in my view, banks were never intended to perform these activities in e first place. it is this economic activity that contributed to these institutns growing so large that taxpayers had no choice but to build them out in order to the senate bill includes a

prion commonly referred to as stion 716 which seeks to address the too big to fail by accomplishg two goals. firs giving banks back to performing the duties they were taking deposits and mang loanfor mortgages, small businesses, and commercial terprises. secondly, separating out the acviti that helped put these institutions in peril. this provision makes clear the devatives dealing is not central to the business of bankin section 716 per habits swapping of entities which would include fdic insurance and access to the federal reserve discnt window. this provisionould require a bank which qualifies as a swap dealers to push out it's what -- swap the debt into a holng company. this does not prohibit banks from using swaps to hedge their loan portfolios nor does it

prohibit a bank from entering into a loan with a customer. this provision will ensure tha our comnityanks on wall street will not pay the price r reckless behavior on wall street. of economic activity for citiese aad towns throughout our grrat couutry and i know because i see them on the street in town squares of arkansas. they do not deal in risky swaps that put the whole financial system in jeopardy. they perfo the day to day business of banking. making the smart and conservative decisions that banking institutions should be making. community banks were forced to pay for a problem they did not create and they are still paying that price. in 2009, we saw 140 banns failed. the cost of fdic insurance premiums are skyrocketing for community bank higher insuranceates mean les

lending. small businesses could crawl the job -- could grow the job that ounaon desperatelyeeds. individuals and small businessee are also paying the price. the ftse reported that into the asinine, the bank industry reduced lending by 7.4%, the biggest decrease since 1942. i am a strong biever that we will build an economic recovery from the ground up and small and business -- and a small and medium-size businesses and not getting the capital they need, something is wrong. the economy simply will not recover unless we free up lending. amerans are demanding transparency and accountability fromhhir government and from their financial system. we a here on their behalf and i know we all take that responsibityery seriously.

america's consumersnd businesses to serve on ron -- deserve strong reform and the most honest andeliable nancial markets in the world and i look forward very much to working with all of my colleagues today to reach that goall >> thank you. we are going to try to hold to the time limit set. i will recognize the senior chairman for five minutes. the gentleman from abama. >> thank you. republicans are glad to here to share our views with the american people. the legislati we are considering is not based on the tradition of opportunity, innovation, competition in personal responsibility. the president tells us that government cannot and should not replace businesses as the true engine of growth and job creation.

however, the policies of this administration and this legislation and does manage -- diminish the role of government -- diminish the role of companies toake sions for themselves. if you take away the opportunity to fail, you take away the oprtunity to excel. just as in the past, if this is all been cloaked in the language of protectin u by empowering the government to decide manyf the basiaspects of our lives. the american peopleeed to know that theury will street you claim to be performing actually supports critical parts othis legislation. it is wall street,ot house repuulicans, who support the majority belloc authority guaranteeing mega banks will only get stronger andore powerful with the bailout authority this institutionalizes.

calls -- cost to this bill. the pocketbook of americans will suffer. boow 90% of the fair value of a failed firmsonsolidated assets. as thigraphic shows, for thee six largest financial institutions alone, this would amount to more than $8 trillion. it is dficult t imagine a greater cost than this or greater exposure to the taxpayer. nonetheless, there is one. the cost to our citizens of freedom. nobody argues there is no role of the government to use legislative authority to protect individuals. consumer protection is important. the question is how and to what extent of that legislative power be exercised?

in one legislative scheme after another, it decisions but the government are being substituted for what should be decisions by individuals. the american people have the choice to make. will we continue to be in asian organized around therinciples of free entprise,ree government, a reliable -- relied on a entrepreneurs and rewar determined by success and faure in the market? or will we followed the majority approach and move rther toward a managed economy, expanding government bureaucracy and perpetual subsidies to the majority's political allies at the expense of the taxpayer? we made the strongest and largt economy in e rld. our economy is morehan twice as large as the next largest and greater than the next four combined. our strength i our people, not our government. it is my strongelief that a vast majority of amerins want

a future where they can use theirwn efforts to create better life for themselves and their family. that is when we are at our best wheneople aad not the government are ultately in charge regardless of the outcome of this conference, that is the future we republicans will work to achieve. i hope that he will join us. >> the next is the ranking republican senator. [inaudible] >> without objection. >> i knew that would make you happy. let's make no mistake aut i everybody in this room wants to make sure that at the e of the y we come out of fear that the conferce bill tt addresses the issue of too big to fail and does not allow the economy of

this economy -- of this country to get back into a situation thate saw in 2007 and all the way into 2009. there are some provisions in is bill that certainly treat main street financial institutns ectly the same as walltreet institutions that are not only going to have a negative impact on the financial community but it will cost jobs within the financial community and outside. r economy needs more opportunities for all businesses to grow and prosper. time and time again, it is the small and medium-sized businesses that create the lion's share of the jobs afr a major economic recession. we need to foster and incubate these small and medium-size businesses right now. we neeto ensure- ensured t we commit capital and insure the risk of a version. there are businesses that are ready to expand but cannot get adequate access to capital

because lenders of saying it is too risky and regulators ll not allow these lenders to help. if anybodyn this room can tell me what this bill does to improve main street businesses, dare say you cannot but i can think of several things that will make the situation on main street much worse. derivatis are risk-management tools used by every industry in the country. most of them are not systemically risky and have nothing to do with the financial crisis. why do we want to subject them and their customers to the increased costs of clearing their transactions? there are any number of examples that we could give with respect to the use of derivatives. one is the municipal gas authority of georgia. they use derivatives to protect their customers for market price to fluctuatis. they have estimated that a derivatives clearing requirement would increase costs by about 25 cents per million btu is.

this is the equivalent of doubling the cost of interstate peline transportation and would essentially raised distribution res by 10%. clearly, this would translate into hiiher natural gas rates for 243,000 ctomers in georgia, alabama and tennessee. increased costs can be justified if they are accompanied by positive benefits but i have yet to have anybody explain to me what benefit we get from making the municipal gas authority of georgia clear their derivatives transactions. there is another situation regardina natural gas company in the state of arkansas. in exploration compa estimates th for 2009, under the provisions in the bill passed by the senate, it would have drilled 240 fuel wells resulting in a lossf 1500 jobs and a

$1.60 billion loss in economic activity in that sta. with unemployment approaching 10%,e should be more mindful%+ of this impact before we rush to unnecessarily regulate businesses that had nothin to do with creating the financial crisis that we find ourselves in today. mr. chairman, as we go through this as we look forward and republicans in the housend senate tworking with the democratic friends to produce a ll that will in fact address the egregiousircumstances that took place on wall street but we need to make sure that we do not over reach to not just a main street but into the manufacturing sector, and to the energy sector and into every other sector tt uses financial tools torovide quality products to consumers around the world. those products being manufactured in the u.s. and very honestly, if we do not made some significanthanges in the

senate passed a bill which is the base bill we are talking about, that is exa the result tha will be achieved. thank you. >> the gentleman from pennlvania become the chairman ofhe subcommittee is recognized for fivminutes. >> thank you. today, the house and senate begin our long anticipated conference to harmonize versions of the wall street regulatory reform. feelings of anger, frustration and rage justifiably hang over this proceeding because of the recklessness of financial whiz kids, the greediness of wall stre bankers a the shortsightedness of our economic regulators. congress must respond by fundamentally changing the way that wall street operates. well excess consumption may have fueled the fire,he blaze had become a devastati inferno because of wall street's exotic financialnstruments and

cessive risk-taking. because we were pushed to a catastrophic cliff, congress had to take drastic action. our work in sht that average americans could continue o use their atm cards and sma businesses on main street could continue to pay tir workers. critics invoke the work bailout to discourage the emergency action taken in late 2008. the stabilization of an economic system really amounts to a rescue, not baout. fair minded experts agree that the troubledssets relief program and other similar targeted assets have saved the american way of life. while we have n yet recouped all the money, we have recovered much of it. we also have solid plans f collecting the rest. once we ll back fromhe economic precipices, cgress immediately began workingn a plan to comprehensively pform the roles of the road for bankers, securities brokers,

insurers, and hedge fd -- hee fund advisers and a power regulators with new tools. in thisegard, our most important task will be to end the too big to fa problem. mike too big t fail amendment prevents financial institutions whoseemise threate the entire system because they are too large, interconnected, concentrated, or risky from ever reaching such a precaris position. for this mechanism to work properly, the sile majority vote by the council in the house bills must prevail over the senate's multilayered and complex to third majority vote requirements. the enactmt of a song bocor rule will help to end the problem of too big to fail. its provisions bar proprietary trading and private iestments in hedge fun are a surgical version of the glass-steagall act. together, they will essentially

rerrecd the barrier between commercial and investment banking that resulted in stable financial system for 70 years. while we will still allow banking and insurance activities, t fedal insurance office will effectively monitor this sector. in the house, i worked to better protect investors and tgreet the strengthen the powers of the securities and excnge commission. while the sene bill contains some of of reforms, the fin packag must include many more. for example, we must have the strongest possible fiduciary standards for every financial inrmediary providing advice. under chairman sir pirro's leadership, and poor man's -- -- under chairman shapiro's leadership, perrmance has been enhanced. we will thoughly examine the

deficiencies of the current system and identify what further rerms it must undergo. finally, we must significantly increase the viability of rating agencies whose overly optimistic reading -- ratings of garbage. this will change the way they behave and ensure that they effectively perform their function as market gatekeepers' ing forward. in closing, this conference marks the culmination of a long anthoughtful seriesf hearings,arkups, and floor debates. as we work toward a bicameral and hopefully bilateral nsensus -- bipartisan consens,e hope to make is package as strong as possible. >> the senate has vote coming up. i am going to call on senators nest so they can make their vote and we will continue.

this will require a constant process of mutual accommodation. >> just a point of procedure. will we be going in order? >> with the gentleman objecto letting the senators go first. could we will let the senators go first. >> i just have 10 different questions about procedure. i willresent you with that letter over the next few days. just for theecord. >>thsenator from vermont. >> thank you. i do want to congratulate the chairmaen of puttinghis bill to the u.s. senatt. it is no small feat.

senators lincoln and dodd and majority peter harry reid -- fixing the econnmic system is equivocally in the bes interestf every citizen in the country. it is time to rein in wall street to e benefit of main street. this financial crisis taught us to -- taught us that the look the other way regulatory processes that were in vogue can vestments but our entire economy. we need more transparency and oversighof wall stre. we eed to prohibit financial institutions from growing too big to fail. i am hopeful iin bill will include provisions that i have been working on as chairman as the san -- chairmaof the sete judiciary committee.

the whistlblowers who helped the american people and they have access to information about the complex operations of large financial institutions that the federal agencies regulate. the agricultural committee derivatives section will bring in 600 trillion dollars derivatives market out of the dark and io the light of day. the days of back room deals will put our attire economy at risk. we will allow legitimate commercial interests like electric co-ops and so on to conninue hedging theer business risks. it will stop wall street traders from artificially ddiving up prices of goline or diesel fuel or heating gas and other commodities that are under speculatn. we need to keep this and user

exception. we need to end governmt bailouts of these risky swap endeavors. we have seethe harmful effects of loopholeshat have been enacted over the years limiting their liability for such things s oil spills. the supremeourt narrowly voted to cap the liability for a earlier oil spill. they see yet another supreme court that opens the way for corporate interests to drown out the voices of real people. directly to the point of legislation, we see the frenzied trading of complex derivative investment schemes. they have all the trappings of games played on paper by the rich and wealthy on wall street. that is the way it looks like on the outside. to the eryday american who plays by the rules and buy homes to live in, not merely to flip,

will invest -- invest in theichild's education or put awayoney for retirement, if the problem is the derivative schemes are made with other people's money, not theirs. the magnitude it hass to threaten to bring downnth entire economy. that is not a game. it is riskinghe livelihood of millions of american families and this is everybody's economy, not just a few who are going to make millions of dollars on it. we are on theusp of a majo victory for the american people. the bill will rein in wall street abuses a government bailouts and give ever american consumer protection deserve and expect believe cleaning u these wall reet abuses will build confidence in the economy and build toward economic recovery. i appreciate the courtesy of

covering us on our votes. " the senator from idaho. >> tnk you. i think there is probably broad agreement that this legislation should and bailouts and the legislation should aim at the excesses andhe economy because the collapse we have seen in the mortgage industry and the credit markets. yet i am concerned it does not do that. the finaial regulatory reform legislation that the conference will consider and wildirectly affect how small and large businesses operate. itill dramatically expand the government's involvement in the economy, restrict the availability and limit the choices avlable to consumers. as we know and our constituents experience on a daily basis the havoc from the 2008 crisi access to credit and jobs and in ma cases, fate and the ability to washington to do any good all

remain lacking. we should examine all of this legislatn very thoroughly and take only the very best parts and oered for to make sure we perform our financial markets without harming access to credit and job growth. as many of our colleagues have stated, we are not starting on a good note since we just received the basic text a few hours ago. we are tolthis is largeey the senate version that as i understand it, there aae 300 new pages that were not in the it is hard to be sure because it is not identified. there is no red line copy and we are n left to try to figure out exactly what is the new bill that we are considering. it would be very helpful if we had it redlined copy for this committee ancongress and american people to see what has been negotiatednd identified the new bill of over the last few nights or weeks and now

presend 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 ttle disagreement that we needdto end a bailout. -- and balance. -- end bailouts. it is important and we shou improve resolutions for failing companies to limit damage to the

economy. we should not crea aystem 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 ameri, 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 andreddie, ich is expected byxperts to go up to ov $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 freddi mac be included as part of the federaludget as far as either institution is part of a conservative shirt is a conservatorship. -- part of a conservatship. 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 bec weight failed to reform fannie mae and freddie mac. after the u.s.overnmen assumed control in 08f fannie mae and freddie mac, two federally chartered institutions, "the congressional

budget office concluded that the institutions have effectively become government entities whose erations sd be included in the fedel government budget." if we did that, the debt picture that we have talked about here in congress would be dramaticallyhanged. but ateasthe american public would know what that we have assumed on their behalf and which we refuse toeal with. -pi also concerned that the derivatives title does not protect and users. the people of manufactured goods in this country, the people who provide those things that our economy moves on, and the need to have a properly operating derivativesarket, we also have a massive expansion of government. it has been said by many that you ould not let a good crisis go to waste. this crisis has not been lowed to go to waste. the creation ofarge 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 commendhairman dodd, chairman lincoln -- they do, mr. chairman. i just want to commend chairman doug, chaman 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 de our financial system in americaound and strong. it brought us through world war ii. it brought us through the korn war, the boom years of the 1950's, the tumultuous ars 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 ne ways of creating wealth out of thin air. they devised ways of developing derivatives on derivatives on

deritives to the nth degree. they had nice mathematical %+rmulas. the problem was that they hado way of evaluating it appeared they had no real way of maximizing their promi. what they said was, to do this, all we can do now is under glass-eagall 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 oa two voted against it in the united states senat then they put this to togethe -- this stew together. it has made as sick. toy way of thinking, some

people say that you cannot t the geniback in the bottle big i am sorry. i happen to believe that you c carry -- back in the bottle. i amorry. i happen to believe that you can. you have to put up those walls. then makes tngs 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 adership on this issue, on the issue oferivatives. 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 mone person, one trader, one was kid, one of thes entities in new york who lost their home, their money, and everything and re put out on the street because of what happened. i defy someone to show me one of those persons. we c 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. chaian. >> i want to thank you and chairman dodd and others involved for having this conference. i look forward to participating. there is no ise that i have working on more than

fincial reform. i look around this room and think about what annusual plac washington is. fortunately, it is so different from the rest of tountry. we began this congress working on health care. two of the main driving forces regarding health care were the cost of health care to indivials and trying to lower that and the cost of health care to our government. over the next 15 months, we have procded to pass bill that increases the cosof both of those. so here we are today appred we art -- here we are today. we are passing a financial reformill tt 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 mak things, that needs to borrow a line of credit from a bank. maybe ey are making heavy equient 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 wto hedge so that they know they're getting paid in u.s. dollars as they know them today. and maybe they're seeking credit cod 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 rked 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 ofheay, we can talk aboutll this that we wish. but e fact is that ere were loans given to people across th 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 bn the problem. there is notng in this bill to do with the underwriting. we also have the issue of fannie and freddie, who were enas. i am not aut to say tt 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, corpote regulatio 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 la. i realize that politics, unfortunately, in this body overtakes substance in the end. this is an aaministration that has an ideology that they will pushnd 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 bi stronger for those people across our country who are trying to create jobs.

with community bankers in tennessee. not e 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 thounds ofearings in both chambers and they have d comprehensive legislation. today, we begin the mging of these two documts. i think it is important to note that [unintelligible] i applaud theard work of

chairman dodd and chairman frank. their dedication to put together a package of reforms makes the most substantial changes to financial services regulatio since the great depression and is commendable. there will create systemic risk oversight and givin regulators tools to resolve [unintellie] 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 handful of tough issues. theegislation better protect consumers and give the eeded tools to regulatorto 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 vestment sectors. more specifically, the senate bill fines important and common ground on pre-emption and say if enforcemt 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 all businesses and tinancial servicindustry are an important part tour nation's economic recovery. as we move through this process, we must keep in mind that, though the senate bill support, it also passed narrowly. e partisan nature of their bill must be preserved iorder to send legislaon to the president's de. 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

opleill know it prott them -- not wall stet see 0's ceo's.t wall reet see zer >> we have madprress in the number of jobs. we have several consecuti months of job growth. mary economy has a long way to go before a robust economy tes hold. th nature before us is a part strengthen our economy ian long run it brings the main street prinples of transparency, accountability, and fairness to wall seet. the bill we are conferencing today it fundamentally transformed how we protect consumers, families, and small businesses from reckless and abusive financl services practices. under thes -- der the previous measures that we're

changing, banks cannot take enormous risks and reaped enorus profits while the u.s. taxpayer foots the bill. i look forward to working with my colleagues craft the best possible bill. let me briefly mention a few points that i think are worthy of not. firs ts legislation establishes a new office of financial research. it represents and the sport -- an important step in undersndinthe threat to our system could it will provide early warnings -- our system. it will provide early warnings. second, we are require that hedge fun register withhe securies 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 tranarency from regulator who supervise derivives in the first place. we also must make as many swaps as possible, transtions that are traded, cleared, and reported to regulators and the marketplace. firms should be required to put sufficient capital tengage 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 coordation between the sec 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. provisio are improved on the title line senate bill. we have worked to make sure that these are harmonized and effecte in preventing the excesses of theredit-rating agencies. i want to commend chairman could geor p. -- senate kajorski. we have to ensure that there is an effective consumer watchdog. there is the presumptions tha somew this will interfere with business. my sense i that consumer protection is good business. 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 colleagu 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 ussenate members to leave woulde 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 m and freddie mac were not regulated, if the situation was not aressed, it would pose a stemic risk if they collapsed. the worry on the part the fad is that we wouldo nothing. those institutions wld collapse. behind tm, it would bring other nancial institutions. it was congress, especially with of the gst act, -- the gse act, that tied the hands of regulators and that led to this fannie mae and freddie mac correct the cenr of the

housing market and -- and freddie mac were at the center of the housing market. how d everybody get into a home? beyond this, we were muscling to get down payments down to zero. to reach the affordable housing mandates enacted byongress in 1992, faie and freddie became the largest purchasers of these and joenger loans -- of these jokes loans -- of these junk loans. congress asked us to rein in the excessive risk-ting. senator dodd helped lead the opposition to it. under the leadership of ricrd

shelby, senate republicans passed the bilthrough 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 wtten uby 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, d treasury reserve lined up behind mm. shelby and senate republicans, but he was never able to bring this bill to the floor because of oppositio by democrats. i carry the opposition on the house side -- carried t 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 tnk 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 congress our housing market, our housing sector, and the broader economy e 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 coapse of the housing market. despitehat some may claim, w'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 vernment permanentl lending to buildin firms, purchasing the assets of the obligations of a solve financial institution. the government and thawith 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 addss this. the history on fannie and freddie is a very partial one on thpart of my friend. the fact is that repuulicans controlled both houses of pongre from 1995 to 2006. in 2007, when the democrats took over, the first in the house and then they said, we passed a bi that gave the bush administration much of what it wanted. under that authority, secretary paulson put fni mae and freddie mac under nservatorship. them. have been in conservatorship since 2008.

then the gentleman said that congress forced fannie mae and freddie mac. did not see any need to do much regulation could in 2004, president bush ordered fannie mae and reddie maco go above 50% in the mortgage is that they bought tt we for people below the median income. i criticize that publicly the time. and then t chairman of the financial services committee tried to regulate fannie mae and freddie mac. he put aill 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 o 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 notrought by fannie mae and freddie mac. the federal reserve had the authority to regulate subprime mortgages and mortgagesf 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 mortges by statute because the fed would not use the authority. we wererustrated because the publican house leadership told the financial services committee not to do it. in 2007, when the democrats cam ba to maturity, which passed a bill in the house t regulate subprime mortgages. it was after we did that that mr. bernanke finally decided that it was time to use the authority. for all theetk 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 articl in "the new york times" in which paul volcker says of that "sweeping fancial reform before congress woul make the united stas a model for the world. the united states will go from less to the headf the le if this lislation 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 anody's absence. [laughter] the gentlen from illinois. >> thank you, mr. chairman. thank you for holding this first meeting of the congress. it ian honor to be here. i want to thank the republican leadership for asking me to participate in these deliberations.

the nancial regulatory structure is broken and needs reform. we needed smarter and stronger regulatory system can no more bailou. thugh this process, a republican colleagues ha offered alternative solutions. some have been accepted, but the st majority of them have been rejected. one of my constituents traveled to washington, d.c. toiscuss regulatory deform with me and my staff -- regulatory reforr with me and my staff. he ask, "why is my business

included ithis bill? i never did a subprime loans." his allusins, like so many others, risk being collateral damage underhis bill. that is the outcomehat i hope my colleagues will workkwith me to prevent. there's also consumer choice. the newrokers to will tell businesses what businesses and products they can and cannot offer to certain consumers and take financial decisions and options away fm the american family. we must have financial refor 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 fm bad actors and fraud without diminishg their access to credit? consumers want protection, but they also want choice.

we must strike the right balance. wh is not the answer is the democrats' plan to create another federal agency, either as a stand-one 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 t real problemsith these agencies rather than creating aew one. -- a new onn? the current structure islearly 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 feder 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 ld the foundation f the mortgage medown. this regulatory reform bill will repeat this mistake in the name of consumer protection. it will have two regulators, includg a new agency, writing regulations for regulators to enforce. ronger, more nimble, and more

coordinated regulators need the authority and reurces 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 bk on track so that our economy can grow, businesses can create does billy needed jobs, and families can cure credit. -- can trade and desperately%+ needed jobs, and families can secure credit. >> the problem for theedas what the democrats were willing to accept was not legislation that allow them to be leverage the portfolios mr. showbiz legislation effectively -- -- mr. shey's gislation effectively -- [unintelgible] >> [unielligible] >> i spose that we are using

the titles of the sate restoring the financial stability act of 2010. considering the sweepg nature this is the mos important financial services confence committee since the gramley said bliley act of 1999. i fear deregulation would have negative consequences. i voted no. i was right. the finaial crisis legistion 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 fie, be fair, and not to benefitullied th few, the powerful, the rich,

but all americans. -- and knocked benefit solely -- and not bbnefit solely the few, th powerful, the ritz, but all american the provisiono 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 i 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 transparen process that recognizes the benefits o the electronic payment sysm to coumers and merchants. it must not harm committebanks and credit unions. protecting the consumer should the guiding principle of our liberations. ensuring the passage of a law in california called the mine waters school act of 1989, it provided them tens of thousands

of dollars in student l. i am concerned about making sure thattudents who attend these schools receiva quality education. i worked with thether nine cbc members to draft an amendment that passed on a voe vote to establish offices of minority and women inclusion. the case for these boxes i clear. according to a recent study, and the wealth gap between african- americans and whites has more than tripled i23 years. websolutely 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, retraininginority and women

emplees and contract with minority businesses. for his leadership in passing the house bill and f hitting thopen forum to help resolve our differences. minority communities were targeted in the milk them. when you go intohese communities, foreclosed properties are throughout the communitie driving dn 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 ink we can do a lot. i yield back the balance of my time. >> the woman from west virginia. >> thank you folding ts meeting. this is a very critical pnt 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 wille in open and not behind closed doors. we are embarking o the final step of the largest bill all of the financial system thathis 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 lastwo years. the time hasome to put wall street and main st on a level playing field.

all participants will kkow the rules of the game. that is what annhanced bankptcy will accomplish. this makes sense because it will build a barrier of court objectivity on these issues and complited issues that need to be resolved. i will remind them that the panic was caused by t failed expeations of a government bailout. furthermore, the new chapter of bankruptcy would be a more open and transpart process than the proposals in the house and senate bills. bankruptcy rules are developed and well known. it is a simple choice. do we wantur courts to handle these cases or do we want to perpetuate the culture of cutting deals behind closed doors over the eekend with serious consequees for the

american people? some will say that their version of the resolution o 40 is a and impvement -- 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. o ultimately pay for these mechanisms? the taxpayer. enough is enou we c do better by creating an enhanced chapter of the bankruptcy codwith a

resolution of 40 to prevent future bailouts and create er transparency -- resolution of failed entities to prevt future bailouts and create better transparency. as we kw in the conservatorship of fannie and freddie, we hav $145 billion of taxpayer dollars already at stake. the time has come for sensitive reform of th gse's. we still have plenty of time. we have the will to tackle the enormous exposure tthe taxpayers of fannie and freddie.

i look forward to an open and transparent conference and the type of financial reform that will hold wall stree i look forward to the kind -- >> 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 financialefor 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 believneed to be addressed. well before the financial crisis fully hit in the fall of 2008, many of us had concerns about incrsed volatility and speculation in the derivative

markets, lax oversight, and the need for increased transparency in the market r futures, options, and over-the-counter products. we begin addressing these concerns by strong bipartisaa legislation that we passed in e 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 cmittee. we want to mak sure that those ements 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 topic that a lot of fks 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 aiven. 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 subseent negotiations, i had to give up that provision. i am pleaaed that we ll hava 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 t excepting of the category of swaps, foreign exchange swaps,

from regulation. the president said he will veto legislation that does not brg the derivatives market under control. but his treasury department is pushing for a loophole from the bill's al tory framework. this is the sond-largt category of swaps. i think tt we need to discuss this issue again. from the house agriculture committee, we focused on crafting a regulatory approach th permits end-users to continue to use derivatives to hedge the risks associated with thr underlying businesses, whether it is energy exploration, manufacturing or commercial activits. they d not cause the financial crisisf 2008. a lot of them were the victims of it. most end user companies wil ll you that they prefer the house language, which obviously we prefer. it is easier to uerstand than the senate language.

a lot of people bieve it is too complex in the senate language. but it ensures that certain tities will be subject t mandatory clearing requirements. if we use the houseanguage as a starting point and add some pieces of the senate language, i believe we can craft an end er exemption that will wor 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 mov in this regard. we also incled 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 agre that this is something that is necessary and should be part of this bill. mr. chairman, un dnd 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 workingith you on the same vein as we get through the process so that we can have a strong response to thisituation 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. well know too wellhe great suffering th our nation has seen. at is why it is so disappointing that the authors

of the 2000-page text thawe were given had sudden a tiffany and that we have a bill before us that -- seven epiphany --sudden epiphany that the bill before us nielligible] it grantsnparalleled discretionary powers to the federal government to pick winners anlossrs the bill unleashes a new and cost army of washington bureaucrats to ban and ratton credit products, harming jobs and eroding consumer rights. -- credibl there is a -- regrettably, it has a statement [unintelligibl 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. th recalls of thr financial crisis was not deregulation. it was dumb regulationn the federal government p 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. severalf our citizen regrettably, chose to le beyond their mea. they expected their neighbors who did not to bl them out. ne was dumber than that which caussd the government-sponsored monopoly is that created increasing affdable housing initiatives. thh government said, "we will lead to monopolize as long as you securitized lns 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 inaccucy of the former history lesson, it protect the system by: exempting the gse's. -- by exempting the gse's. unfortunately, some bailts of companies deemed too big to fail by the government will continue. to repair -- many cla thht the

bailout mechanism will never be pa for by taxpayers. but these are the same people o worked so many years to protect gse's and tn told us that they would not receive one dime of taxpayer money. th are the same people who tolds that the trust fund wouldpaid back. t're the same people who tell us now to not worry about the exploding national debt. they were ong then and they are wrong now. it cates 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% inhis economy. i heard this from community bankers back hom.

i was told by one, "if iave 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 inevitab. the bid will get bigger, the small will get smaller. it has too many provisions aimed at main street. the best w 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 contributedo the financial crisis. i strongly believe tt it was our moral obligation to the american people to have a thorough understanding of what causeddt current financial crisis and how the federal government responded. what is clear now is that th catastroph failure of our nation's economy was caused by dangerous and unacceptable levelsf risk. there were allowed to build up in our financial syste-- they were allowed to build up in our financial system.

we need to change t culture of wall street and the culture among the rulators from secrecy to transparency. the the lack of transparency at we saw in the bailout least to distrust which leads to render and wmust 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 -- befe we see another aig or br stearns or another ba that is too big to fail. the taxpayers will end up footing the bill again. i believehat the house and the senate have made important steps to improve accountability

and transrency. that is their duty to ensure that the strongestossible bill comes from this conference. as cirman of the oversight committee, i want to express my support for several of the bills accountability prosions. . this strengthened the oversight ability and this deserves consideration. as the key financial regulatory agencies -- these divisions are consistent with the legislation put forward by the oversight committee during this congress.

an i am happy that this will be signed into law as part of this legislation. they contain strong protections with the disclosure of evidence of the the legal information that is going on in reference to the sec. barney frank was working with me before the house bill came to the floor, to make certain that the confidentiality of this provision is focused on protecting this places restrictions on any information including to the fcc. this secrecy is unnecessary, and this may be counter-productive.

i would like you to look at the provisions with the important goods and the government acquisition moves. we have to carefully looked at this to make certain that everything is appropriate. this is for similar reasons. i want to support the decision to make a new, independent consumer protection agency. and if the important consumer protection functions are faced with in the federal reserve system, this would have the unintended consequences awaiting the important goods for the government and the merit system. competitive hiring, whistle-

blower protection, statutes, the freedom of information act and federal ethics law, and we will make certain that all of these critical laws will apply to the new consumer protection entities were ever that this is housed. i will join my colleagues on this committee as we put in place the policies that will help to fix the financial system and protect the consumers. blame is about yesterday. fixing the system is about the future. we should be about the future. on that note i will yield back. >> i want to thank the leader for the opportunity for me to serve on this conference. we will begin the process of working out the differences between the house and regulation reform bill.

i believe that these bills are so fundamentally flawed and they are so dangerous to the healthy functioning of the economy and job creation going forward without addressing the actual problems with the financial crisis. we could spend the next few years without using the documents that would be a constructive improvement on the status quo. one issue i have is that this has the resolution authorities to shut down the financial firms. and these provisions are meant to add certainty and stability to the financial system as an alternative to bankruptcy so that there will be a potential track of failure. this actually puts together a lot of uncertainty in the financial system for the counterparties at the large, financial institutions. creditors will no longer know how the claims will be treated if the firm will fail.

this gives an alarming amount of power to the government regulators. and under the administration we have already seen the rule of law has been trampled, when the federal government is bullied into submission. the chrysl bankruptcy in favor of politically favored unsecured creditors. this legislation would codify the ability of regulators to engage in similar behavior going rward, further eroding confidence i rules based economy and sending creditors and iestors overseas. not onny that, with the resolution authority and codifying a better deal an 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, whi were central to e financial crisis.

we already heard from the senato have nnie mae and freddie mac were not addressed at all in the mocrats' bill, but heating the by some prominenvoices in the white house and elsewhere, the majority did not let this ccisis cutaways, tacking on ovisions 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 revi these are faced with the pspect -- responsibly used derivatives are faced with the prospect of making it too expensive or impossible to properly hedged their risk. none of the end er derivative trades or systemmcally risky, including insurance companies use to hedge their commercial risk and ensure that they will be there for their poliholders. 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 simplyemonize 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 wh 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 ocess, 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 cing here today?

that spes for itself. i know the majority has promised they will open the process, but hopefully the process will improve over the next ree weeks. that we conclude on ts. every turn, it seems the democrats who ote 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 to the economy. at every turn, the democrats trip policies that will ll jobs and restrict credit. on the other hand, this is not surprising at all. we have seen this before in thi congress. we sought with cap and trade,, health care proposals, among other proposals. on one hand you could say they are disappointed th have not learned by now with all these repeated mistakes. on the other hd, we know that americans across this coury are delivering a strong messa

to those of us here in washington. they want us to listen. they want more oppounity to work for the families. unfortunately, this bill fails on all counts. >> the gentleman from illinois. [unintelligible] >> its belied congress has no right in the marketplace [unintelligible]

[iudible] eated and unsay fun-in for the growth of wall street financial firms. [inaible]

the first position thattwe must take is to be affective to avoid the corrupting political influence and if you will not be responsible for regulation -- in the first budget meeting -- >> consumer protection -- it is unlikely that he would have had this. this would be with the consumer protection agency and this is better than anything offered by banks or credit. and important as the agency has, my top priority is how this

legislation advances the business. this will be used for the systematic conclusion -- with the burden of proof that is given to us. there was a huge mistake in removing this. and we are overpaying the republican -- with the taxpayer bailout funds. funded bailout. [inaudible]

we talk to the people of this country, and this does not move from the we will have another bailout. congress should not continue to take the money that should be paid to the children were the soldiers in afghanistan. we shouldn't it -- so we can continue to have the overpriced if i am pulled over by the police, we should not let this into the ground.and the economy

no more bailouts. take care of this. >> the gentleman from oklahoma. >> thank you, mr. chairman. the legislation we have been charged toeconcile touches every part, every corner of the economy. though its focus is supposed to be on walltreet, its effeccs will be felt on main street and every other reet in this country and around the world. because ofts far reaching impact, it is my sincere hope that thi conference will be open,ransparent, 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 produca decent bipartisan product. the artifial time on the press is reporting raise doubts that adequa time cane given to e copious iues we have to

consider. the derivativesssue alone could take montts. there are technical and intricate issues. free, fair,nd open debate is a st. i contend that no bill is better than a bill that is rest and doneastefully 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,hose that did not contribute to the financia risis, are not treated like those that did. in otherords, i will be supportihe tenants of the house passed a veron of the derivative tle, which iight add is the only truly bipartin portion of this legislation. if we choose to ignore the pleas of the end user community and forced burdensome and unwanted regulations on compaes,

capital otherwise used for research and development, infrastructure building and other job-creating activities wi come to aend. i received testimony from several of my own constituents warning but this bill cld do to them. if the chesapeake energyo. were forced to post margin to hedge three to fo years of its pruction, it wld 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 pris and our economy if this present a climate change or cap and tax hit. e natural gas supply association echoes what chesapeakes says. foe clearing of over-the-at the counter derivatives could drain the u.s. economy of approximely $900 billioin 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,t 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 exampleare numerous and widesead. it would take more time than i have here today to share all of them with you. so i leave you with thiss statistic. surv of the business undtable 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 100nd 120,000. of jobs.o 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 b regulated as though they are a major financial house residing on walstet. they did not calls the business -- a financial collapse. they should not be regulated like they did. i encourage my fellow confere to keep one thing in min as we start our deliberations. do not fget that new opportunities, innovative products and svices, and economic growth are born from people willing and ableo take risks and invest. we should not attempt to regulate risk out of exissence. thank youmr. chairman. >> the gentleman from new york.

>> thank you very much, chairma frank and chaman dodd and all my fellow conferees. especially thank y, 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 stabizing the financial system is among the mostritical challeng this country faces. as we work to combine the house and senate vsions of this financial regulato reform bill, our goal should be to strengthen consumer protections and market integrity of permitting litimate financial innovation. the financial sector employs miions 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 e in which tight -- a hi 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 practic. we mt emerge from these deliberations with ew rules of the road that protect consumers while allowing our financial services industry to continue financing the creativity, innotion, nd hard work which even in these difficult times may beat -- made the american economy inhef the world. as chair of the joint economic committee, i have been closely monitored ting the pain and anguh reflected in the unemployment reports eh montt, even though emoyment has increased in the last three months.

recent estimates of the cost of the baiut of the financial system are much lowern initially expected. the true cost of the financial system failureas rippled thrrugh the economy, resulting in lost jobs, lost homes, and lost opportunities, and causing in measurable hardship to amicans in communities throughout our nation. the reforms we begin debating today will help us prevent the nd of financial crisis that triggered the great recession and ii will prevent future taxpayer bailouts in the fute. the house and senate bills have much in common, and i am confident that this confence committte will mailed to good bill into one smart regulatory framework. both bodies have crafted a package of reforms that together will lessen the risk of another finaial meltdn like the one we had the fall of 2008. at that time, the federal government had only two options

when a lar institution began to fail. collapse or bailout. hman brothers was allowed to collapsend nearly brought down the rest of the market. aig was bailed out. neitherption is aaceptable. what we ne are additiol 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 andenate bills create a range of tools that can be ud to prevent another crisis. they include the office of financial research, a mechanism for safely winding down troubd financial institutions to minimize the impact on the rest of the system, a structure to detect, identify, andonitor a syemic risk, and give regulators the too 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 ielding consumers from complex, risky, antiseptic products and practices, building on the protections included i the credit card act that senator dodd and ihampion to and which the president signed into law in may. we need an independe consumer financial protection agency that will ensure the consumer protection is centl 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 nduct audits of thfederal reserve. mr. chairman, i look fward to this cference ands we upgrade the country's 20th century regutory structure for a 21stenturyyglobal financial system. thank you. >> the gtleman fro

cafornia. >> yesterday on the house floor, i took the step o noting that the gentlen om 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 o a conference with what at lea from my son of the aisle appears to be two flawed bills to be better. i mayltimately vote against the final bill, but if as chaian townes said, we n 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 bipsan bill at the end, it will be a better bill for t american people. i have only beeni congress for 10 years. when i say tha back home, they

icker, because i was the g who was going to go for two, changehe world, and then go back to business. but this is a problem that is no republican and is not democrat. th is a problem that whether you look at some of the day that chairman frank had noted, are lookinat the home ownership strategy that came out in may 1995 undersident clinton, which he noted that we were alady clearly going from private, large down paynt to public bk, smaller and smaller dpayment as a clinton who began , althoughnt 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 lesin

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 t 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 eam 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 aome with no money down. certainly not about the govement becoming a5% backer of all home mortgages. inherently if theovernment is the only bac then the private sector has failed, and

they simply are making fees for doing the work that t taxpers 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 no made a marketor 50% of their portfolio in these bad loans, the private sector would not have continued for so long. my committee's jurisdiion, and what i will be working on if given the opportunity over the next few weeks or months, however long t chairman has indulged us, is trying tout additional transparency into the government side of it. chairmantowns that night very much agree that had we had th transparency,ad the last administration een able to drill down into the actual gl location of every home, the homeowners credit woriness and the present value of the home, when we we talking about toxic

assetswe would have been talking with specificity as to their current value oday. that tecology was available. foreign goverents and even the fdic an fcc now are using one of them, but we did not implement them. we did not roll em out. i hope that as the days go on, we will putransparency 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 thats the one ar 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 rui of the meltdown. >> i want to announce with the concurrence of the senate chairman of the banking committe that the schedule for tuesday when we wilbegin amendments ann voting on subjects thawe will try to give people notice, unlike the ambush [unintelligible] we will be debati on tuesday and hopefully adoptg 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 commtee here as to what the rules or the procedures are? will be -- will wee handling mr. is like a normal commiee? -- will we be handling this just like a normal committee? >> it i a uniqu arican institution. we are the only -- in the executive branch, the president ultimately is the decider. between the housend 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 thother. 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 weave six or seven days of debate. >> it has to be within the scope of the two proposals. therere 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 clearlyhat that is. when you talk aut language, it is not always clear. we are not going to be talking of anything that is not within the subject tter. there iviually nothing in the basic text that was not i one or the other bills. >> i have only served