To impose appropriate limitations on affiliations with certain member banks.

RESTORING AMERICAN FINANCIAL STABILITY ACT OF 2010

The PRESIDING OFFICER. Under the previous order, the Senate will
resume consideration of S. 3217, which the clerk will report.
The assistant legislative read as follows:

A bill (S. 3217) to promote the financial stability of the
United States by improving accountability and transparency in
the financial system, to end ``too big to fail'', to protect
the American taxpayer by ending bailouts, to protect
consumers from abusive financial services practices, and for
other purposes.

Pending:

Reid (for Dodd-Lincoln) amendment No. 3739, in the nature
of a substitute.
Brownback further modified amendment No. 3789 (to amendment
No. 3739), to provide for an exclusion from the authority of
the Bureau of Consumer Financial Protection for certain
automobile manufacturers.
Brownback (for Snowe-Pryor) amendment No. 3883 (to
amendment No. 3739), to ensure small business fairness and
regulatory transparency.
Specter modified amendment No. 3776 (to amendment No.
3739), to amend section 20 of the Securities Exchange Act of
1934 to allow for a private civil action against a person
that provides substantial assistance in violation of such
act.
Dodd (for Leahy) amendment No. 3823 (to amendment No.
3739), to restore the application of the Federal antitrust
laws to the business of health insurance to protect
competition and consumers.
Whitehouse modified amendment No. 3746 (to amendment No.
3739), to restore to the States the right to protect
consumers from usurious lenders.
Dodd (for Cantwell) amendment No. 3884 (to amendment No.
3739), to improve appropriate limitations on affiliations
with certain member banks.
Cardin amendment No. 4050 (to amendment No. 3739), to
require the disclosure of payments by resource extraction
issuers.

The PRESIDING OFFICER. Under the previous order, there will now be 30
minutes of debate, equally divided and controlled between the Senator
from Connecticut, Mr. Dodd, and the Senator from New Hampshire, Mr.
Gregg, or their designees, prior to a vote in relation to amendment No.
4051.
The Senator from New Hampshire is recognized.

Amendment No. 4051

Mr. GREGG. Mr. President, I sort of did a trailer version of this
bill a few minutes ago while we had some time in morning business. But
let me discuss the amendment again.
The PRESIDING OFFICER. Will the Senator call up his amendment.
Mr. GREGG. I call up amendment No. 4051 and ask unanimous consent
that the pending amendment be set aside.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will report.
The assistant legislative clerk read as follows:

The Senator from New Hampshire [Mr. Gregg] proposes an
amendment numbered 4051 to amendment No. 3739.

Mr. GREGG. Mr. President, I ask unanimous consent that the reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To prohibit taxpayer bailouts of fiscally irresponsible State
and local governments)

On page 18, between lines 17 and 18, insert the following:

SEC. 5. PROHIBITION ON THE USE OF FEDERAL FUNDS TO PAY STATE
OBLIGATIONS.

(a) In General.--Notwithstanding any other provision of
law, no Federal funds may be used to purchase or guarantee
obligations of, issue lines of credit to or provide direct or
indirect grants-and-aid to, any State government, municipal
government, local government, or county government which has
defaulted on its obligations, is at risk of defaulting, or is
likely to default, absent such assistance from the United
States Government.
(b) Limit on Use of Borrowed Funds.--The Secretary shall
not, directly or indirectly, use general fund revenues or
funds borrowed pursuant to title 31, United States Code, to
purchase or guarantee any asset or obligation of any State
government, municipal government, local government, or county
government or to otherwise assist such governments, in any
instance in which the State government, municipal government,
or county government has defaulted on its obligations, is at
risk of defaulting, or is likely to default, absent such
assistance from the United States Government.
(c) Limit on Federal Reserve Funds.--The Board of Governors
shall not, directly or indirectly, lend against, purchase, or
guarantee any asset or obligation of any State government,
municipal government, local government, or county government
or to otherwise assist such governments, in any instance in
which the State government, municipal government, local
government, or

[[Page S3857]]

county government has defaulted on its obligations, is at
risk of defaulting, or is likely to default, absent such
assistance from the United States Government. Notwithstanding
any other provision of law, no Federal funds may be used to
pay the obligations of any State, or to issue a line of
credit to any State.

Mr. GREGG. Mr. President, this amendment is pretty simple. It says
American taxpayers should not be put on the hook for States which have
been profligate. It says, specifically, that: Federal funds cannot be
used to purchase obligations of States or local communities that are in
default or are about to default, unless those States have gone through
some sort of crisis such as the Katrina situation.
But if the default that the State or local community is about to
experience is the function of their failure to discipline their fiscal
house, then we are not going to ask the taxpayers across this country
to support that error in judgment and that misguided fiscal policy of
that State or that local government.
If we do not have this type of rule in play, basically we will be
setting up a situation where the American people will become the
guarantor of inappropriate actions across this country by legislators
and city governments. You will have this untoward situation where you
will basically create an atmosphere that there is an incentive for
State governments and local communities to not be fiscally responsible.
It is this moral hazard issue. We debated it at considerable length
when we discussed too big to fail in the banking system. This bill has
a lot of issues, as far as I am concerned, but one of the things it
actually handles reasonably well is the issue of too big to fail. It
does need some adjustment. But it basically handles that issue pretty
well.
We have designed language in this bill between Senator Dodd and
Senator Shelby, which essentially says: No longer will the American
taxpayer be presumed or in any way expected or have any obligation at
all to support a financial institution which has gotten too large and
has taken on too many risky decisions and is therefore in fiscal
distress. That institution will fail. Its stockholders will be wiped
out. Unsecured bondholders will be wiped out and the American taxpayer
will not come in and defend that situation.
Too big to fail ends with this bill, hopefully. But it should apply
also to States and local governments. We should not create the moral
hazard of having taxpayers in New Hampshire or taxpayers in Nebraska or
taxpayers in New Mexico responsible for profligate activity in other
States.
In fact, many of our States, of course, have balanced budget
requirements. In fact, in Nebraska, they do not even allow any debt,
period. They have a constitutional amendment that says, there can be no
debt. So they are extremely disciplined, these States, in the way they
handle their budgets.
The taxpayers and the citizens of those States expect their leaders
to be disciplined. So how can we ask those taxpayers and those citizens
in those States that have been disciplined, who have elected people who
are willing to live within their means as they govern, whether it is at
the community level or at the State level, how can we ask those
citizens across this country to go in and bail out other States and our
communities that have been totally undisciplined in managing their
fiscal house and have put themselves at huge distress and have
defaulted on their debt or are about to default on their debt?
This is not acceptable. If we are going to have a bill which
addresses the issue of too big to fail, it should apply to this type of
a situation. So I have offered this amendment. It is very simple, as I
said. It prohibits Federal funds from being used to purchase or
guarantee obligations of States and local communities that are in
default or about to go into default.
It is a pretty strict standard, pretty clear. If you have a State
that for reasons of its own making has created a fiscal mess of
inordinate proportions and cannot pay its debt, it cannot come to
Washington and say: We want you to bail us out.
That is not right. That is not appropriate. So this bill bans that
sort of an event from occurring. Why do we need to do this? It is
pretty obvious. There are a couple States in this country that have
been irresponsible in their spending, that have not disciplined
themselves, and that, I think, are expecting everybody else in this
country to bail them out.
I sure do not want to be part that. I do not want my taxpayers in New
Hampshire to be part of that. It is not fair that they should be part
of that. Those States are going to have to figure out how to straighten
out their own fiscal house. They should have to do that within the
terms of their own spending streams and their own revenue streams.
They should not expect the Federal Government to come in and take
them out of their distress, which was self-imposed and self-created.
There is an exception in this bill. There is this language so that if a
State is put into severe distress because of an emergency situation,
such as a Katrina-type situation, this would not apply. Obviously, it
should not apply then.
If it is a self-imposed event, simply resulting from the human nature
of legislators and city councils to sometimes spend a heck of a lot
more money than they have and that they can take in under their
structure, they should have to pay for it and figure out how to deal
with it themselves. They should not pass that problem on to the
American people by financing it through Washington. It is consistent
with the theme of this bill that there should be nothing that is too
big to fail in this country, including State governments and local
governments or financial institutions. I hope my colleagues will
support the amendment.
I reserve the remainder of my time and yield the floor.
The PRESIDING OFFICER. The Senator from Illinois is recognized.
Mr. BURRIS. Mr. President, as I take the floor today, my colleagues
and I are caught up in a momentous debate over the shape of our Wall
Street reform bill.
This legislation will not only help secure America's continuing
economic recovery, it will also help prevent this kind of economic
crisis from happening again in the future.
It would create commonsense regulations designed to keep major
institutions from gambling with America's economic stability, and it
would extend a helping hand to the underserved populations that are
currently suffering the most especially minority individuals and the
elderly.
I believe when the history of this economic crisis is written, we
will judge that its most damaging legacy was the harm it did to
people's savings and investments.
It wiped out stock portfolios and 401(K)s. It forced many fixed-
income retirees to go back to work, and it undermined the hard-earned
retirement security of an entire generation of Americans. So it is time
to take action.
We need to do everything we can to protect people's savings,
investments, and retirement security.
In a broad sense, this means limiting the risk that big firms can
pose to the economy as a whole, and shoring up our overall financial
stability. But it also means we need to guard against fraud and abuse.
We need to prevent scam artists and people like Bernie Madoff from
taking advantage of hard-working Americans, so folks can breathe a bit
easier, so people know that their money is safe.
Today, many Americans--including 39 percent of minority households--
invest in the financial markets.
Most of these folks expect their portfolio to be there for them when
they retire.
But when big companies sell risky investment packages, and then bet
against those investments--when companies have no incentive to be
honest about high-risk opportunities--regular folks are bound to get
the short end of the stick.
That is why we need to institute basic rules of the road--to cut down
on fraud and misrepresentation, and make sure financial institutions
are operating fairly.
That is why our Wall Street reform bill includes a number of key
protections for American investors.
Our legislation would create a new program at the Securities and
Exchange Commission which would mandate an annual assessment of all
internal supervisory controls, and encourage folks to report
violations.

[[Page S3858]]

It would establish a new Office of Credit Rating Agencies to
strengthen regulation, expose hidden risks, and make sure a warning
system is in place so we are never caught off guard again.
Our bill would also require companies that sell mortgage-backed
securities to hold on to at least 5 percent of the credit risk--or meet
underlying loan standards--so their performance is tied to the products
they are distributing.
It would require these companies to be more transparent about the
assets that underlie these securities, and more straightforward in
their quality analysis.
Finally, our legislation would give a company's shareholders the
right to a nonbinding vote on executive pay so pay can be brought in
line with performance, and these folks can make their voices heard.
Together these measures would help to bring transparency and
stability back to the financial markets.
This would bolster the integrity of people's investments, and would
help ensure that their retirement savings are secure.
There will always be risk associated with making investments, and
that is exactly as it should be.
That is how our free market system is designed to work.
But we need to eliminate the possibility that fraud and abuse can
undermine the security of our entire economy.
We need to pass rules of the road that will keep financial
institutions honest, so ordinary Americans will be protected from
serious harm at the hands of those they entrust with their savings.
I yield the floor, suggest the absence of quorum, and ask unanimous
consent that the time under the quorum be charged equally to both
sides.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. KOHL. I ask unanimous consent that the order for the quorum call
be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. KOHL. I ask unanimous consent to speak for up to 5 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. KOHL. I joined the Senate Banking Committee about a year and a
half ago, shortly after failures on Wall Street forced a taxpayer
bailout. Bear Stearns, AIG, and other pillars of our economy had
collapsed, and we learned that our financial system was built on a
foundation of sand. The crisis on Wall Street hit Wisconsin households
hard. Families lost their homes, workers lost their jobs, and retirees
lost their life savings.
Seventy years ago Congress reacted aggressively to our gravest
economic crisis, and put us on the road to prosperity by creating new
regulations and institutions that avoided a meltdown for generations.
By creating agencies like the Securities and Exchange Commission and
establishing margin requirements, the Federal Government helped put the
markets back on track.
We are now called on to set up rules to put our economy on the right
track just like we did in the 1930s. For over a year, the Senate
Banking Committee held hearings to study the financial crisis. We know
that the conditions that led to this mess did not occur suddenly in
2008, and these problems cannot be fixed overnight.
Wall Street needs accountability and transparency to avoid future
financial meltdowns. The legislation we are considering takes vital
steps to end ``too big to fail,'' bring unregulated shadow markets into
the light, and make our financial system work better for everyone.
This bill protects Main Street jobs by focusing on Wall Street, where
the crisis began. Community banks and credit unions have continued to
act responsibly, and should not be subject to new layers of regulation
that will impede their business.
The bill also protects consumers, and I would like to thank Senator
Akaka for working with me on the consumer protections in title XII of
this bill. This title will help mainstream financial institutions make
small loans on affordable terms to people who are currently limited to
riskier choices like payday loans. This title will also help Americans
get bank accounts, and encourages banks to offer financial education to
their customers.
I would also like to thank my friend and Chairman Chris Dodd for his
leadership on this legislation. Fixing our financial system is a
complex challenge, and Chairman Dodd has worked tirelessly to get this
done right. He has been called upon to do so much in this Congress, and
he has done it all with fairness, wisdom, and good humor. We will miss
his steady hand in the future.
I hope the Senate will continue to work in a bipartisan manner to
complete this important bill. Our economy is slowly recovering from a
devastating shock, and we must ensure that our progress is built on a
more secure foundation. Continuing business as usual on Wall Street is
not an option.
I yield the floor.
The PRESIDING OFFICER. The Senator from Missouri is recognized.
Mr. BOND. Mr. President, I rise to speak on the Gregg amendment and
ask unanimous consent to be included as an original cosponsor.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BOND. It is important we recognize what a fiscal crisis we face
in the United States. Today, America's public debt stands at over $12.9
trillion. Regrettably, that will be on our children's and
grandchildren's credit cards. We have, just last year, raised that debt
by $1.4 trillion, and it will be $1.6 trillion added this year. This
mountain of debt is going on the backs of our children and
grandchildren. We will have to pay the interest on it, but they are the
ones who will bear the real burden. Taxpayers are already bailing out
Wall Street and failed banks with $700 billion; GM and Chrysler, $80
billion; the toxic twins, Fannie Mae and Freddie Mac, more than $1.2
trillion. We have tried unsuccessfully to deal with Fannie and Freddie
in this financial regulation bill. When we look at the cause of the
financial crisis, it is the subprime market, the bad home loans that
were enabled by Fannie and Freddie being willing to purchase them. In
my humble estimation, we should not pass a financial regulation bill
designed to prevent a reoccurrence of the crisis which we have just
gone through without dealing with Fannie and Freddie.
But when you look at the budget deficit, taxpayers are on the hook
for $1 trillion in a failed stimulus package which only created jobs in
the governments. It was a government expansion, not a measure to create
jobs in the private sector.
The President and majorities in Congress have also recently created a
new taxpayer-funded entitlement for health insurance. Many of us in
December were pointing out the fact that this bill would add to the
debt, it would drive up costs of private health insurance, it would
limit the ability of seniors on Medicare to get their services by
cutting the amount of money going into Medicare, and it would lead to
higher taxes.
Funny thing, the new Actuary at the CMS has just come out and
repeated those same four things. The health care bill is not only going
to drive up private insurance costs, you are not going to be able to
keep the same plan you had, it will continue to squeeze down the
services Medicare recipients can receive, and it will add to the
deficit and, thus, the debt.
But how much more debt and how many more unfunded liabilities can we
take on before destroying the economy? What is happening in Greece,
regrettably, could happen here. I strongly support the Gregg amendment,
which will ensure that taxpayer funds are not used to bail out States.
We talked about too big to fail in terms of financial institutions.
We ought to be talking about it in terms of governments. We adopted an
amendment saying we should not use taxpayer money to bail out Greece.
But we should not be in the position where we would be called upon to
bail out States which have been unable to get their spending under
control and get their spending in line with their revenues.
I know a little bit about tight State budgets. When I was Governor of
Missouri, we had to make tough decisions. I came back into office as
Governor in 1981, with a huge deficit in the middle of the year, and we
could not borrow money to cover that deficit. So we made major, drastic
cuts in spending,

[[Page S3859]]

and it was not pleasant. I was picketed by people who had to be laid
off from the State government. But we readjusted and managed to provide
services our State needed and put the State back on a sound financial
footing.
States all across the country are taking tough steps. There are areas
where they have agreed to go without services to get their budget back
in balance. Most States do not have the ability to run deficits. Those
that do have the ability to do that should not be operating on the
false assumption that the Federal taxpayers and our children and our
grandchildren will come back in and be asked to take the irresponsible
and unacceptable task of putting a burden on residents of the States
that have made the tough decisions and cut spending to pay for the
mounting debt of other States that have spent their way into the red
for years.
In fact, a bailout of States would create a disincentive, an ongoing
disincentive, for State leaders to make tough decisions and implement
necessary reforms to get their budgets in balance and future
liabilities under control.
The Missourians I hear from are very angry. They are angry every day
at spending money on things that are too big to fail. They are angry
that the government continues to use their hard-earned dollars to help
companies such as AIG and potentially to help a country such as Greece,
which failed, instead of paying down our debt and cutting the runaway
spending.
This bailout mentality must end. I thought that was one message we
were going to carry with this legislation. I hope this legislation
actually does, although I am concerned there are provisions that could
enable the Federal Government to continue bailing out and taking over
more businesses.
The Federal Government must not continue to be an enabler of those
companies or those countries or States that continue to spend beyond
their means. It is time for the leadership at the State, as well as the
national level, to make the decisions necessary to put all of us on a
sound financial footing.
I thank Senator Gregg for his strong leadership on budget issues and
for offering this amendment, and I urge my colleagues to support his
amendment.
The PRESIDING OFFICER. The Senator from New Hampshire is recognized.
Mr. GREGG. Mr. President, first, let me thank the Senator from
Missouri for his thoughtful and substantive discussion of this
amendment. As a former Governor, I think he appreciates how tough it is
to maintain balances in the State budget, and you have to make the very
difficult decisions to make sure your State does not get its fiscal
house into disarray and end up defaulting on debt. That would be the
worst thing that could possibly happen if you were a Governor--or one
of the worst things. In any event, he certainly did that when he was
Governor. I tried to do that when I was Governor.
The PRESIDING OFFICER. The time of the Senator from New Hampshire has
expired.
Mr. GREGG. Mr. President, I ask unanimous consent that after the
Senator from Connecticut has used up the time that was originally
allocated to him, the remaining time between now and 12:05 be divided
equally between the two sides.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. GREGG. Mr. President, I ask unanimous consent to speak on that
remaining time.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. GREGG. I think the Senator from Missouri has made a superb case
that it is inappropriate to set up a structure where States can be
profligate or communities can be profligate and then basically throw
the problems they have created on the rest of the country and the
taxpayers of the rest of the country--whether they are from New Mexico
or Missouri or Connecticut or New Hampshire. There is no reason why our
taxpayers should pay for inappropriate fiscal actions by some other
State or some other community. Rather, those States and communities
should have to straighten out their own financial house and not expect
that they can come to the Federal Government for a bailout if their
problems have been self-inflicted, created by their own failure to
discipline their fiscal house.
As I said earlier in the discussion, a lot of States have a balanced
budget amendment. I am not sure whether Missouri did--New Hampshire did
not--but we understood if we did not run fiscally responsible budgets
in New Hampshire, we would find our debt downgraded. That is what we
were worried about--to get to the point where you might actually
default, which would be, as I said, a totally terrible situation.
But in States that have balanced budget amendments, States which have
worked very hard to keep their fiscal house in order, the taxpayers of
those States should not have to suddenly step up and take care of the
taxpayers of another State that has failed to do that. It is not fair.
It is not equitable. You certainly do not want to create that
atmosphere because if you have an atmosphere where one State can throw
its problems on to every other State, then you create an incentive for
States to be profligate and irresponsible.

Amendment No. 4051, as Modified

With those comments, Mr. President, I ask to modify my amendment. I
believe the modification is at the desk.
Have we shared the modification with the Chairman?
Mr. DODD. I believe so.
I ask the Senator, this is the modification?
Mr. GREGG. Yes.
Mr. DODD. As I understand it, the modification is a new paragraph:

(d) Limitation.--Subsections (a) and (b) shall not apply to
federal assistance provided in response to a natural
disaster.

Is that right?
Mr. GREGG. That is correct.
The PRESIDING OFFICER. Is there objection?
Without objection, it will be so modified.
The amendment, as modified, is as follows:

On page 18, between lines 17 and 18, insert the following:

SEC. 5. PROHIBITION ON THE USE OF FEDERAL FUNDS TO PAY STATE
OBLIGATIONS.

(a) In General.--Notwithstanding any other provision of
law, no Federal funds may be used to purchase or guarantee
obligations of, issue lines of credit to or provide direct or
indirect grants-and-aid to, any State government, municipal
government, local government, or county government which has
defaulted on its obligations, is at risk of defaulting, or is
likely to default, absent such assistance from the United
States Government.
(b) Limit on Use of Borrowed Funds.--The Secretary shall
not, directly or indirectly, use general fund revenues or
funds borrowed pursuant to title 31, United States Code, to
purchase or guarantee any asset or obligation of any State
government, municipal government, local government, or county
government or to otherwise assist such governments, in any
instance in which the State government, municipal government,
or county government has defaulted on its obligations, is at
risk of defaulting, or is likely to default, absent such
assistance from the United States Government.
(c) Limit on Federal Reserve Funds.--The Board of Governors
shall not, directly or indirectly, lend against, purchase, or
guarantee any asset or obligation of any State government,
municipal government, local government, or county government
or to otherwise assist such governments, in any instance in
which the State government, municipal government, local
government, or county government has defaulted on its
obligations, is at risk of defaulting, or is likely to
default, absent such assistance from the United States
Government. Notwithstanding any other provision of law, no
Federal funds may be used to pay the obligations of any
State, or to issue a line of credit to any State.
(d) Limitation.--Subsections (a) and (b) shall not apply to
Federal assistance provided in response to a natural
disaster.

Mr. GREGG. A parliamentary question: Mr. President, don't I have the
right to modify without asking for unanimous consent?
The PRESIDING OFFICER. There was a time limit on the amendment. That
did require unanimous consent.
Mr. GREGG. I thank the Chair.
I reserve the remainder of my time.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Mr. President, I ask unanimous consent that the time until
12:05 p.m. be divided for debate with respect to the Gregg amendment
No. 4051, and that at 12:05 p.m., the Senate proceed to vote in
relation to the amendment, with the provisions of the previous order
remaining in effect.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DODD. Mr. President, let me address this amendment, if I can.

[[Page S3860]]

First of all, let me express my admiration and respect for Judd
Gregg. He and I are good friends. We have worked together on numerous
issues over the years, so I have developed a great deal of respect for
him. In fact, it was Judd Gregg and a handful of others who made it
possible, 18 months ago, for us to develop the emergency economic
stabilization bill. Without his leadership and support, I think our
country, unarguably, and, beyond our own borders, the world would have
been in much more difficult economic shape--had it not been for his
leadership, along with others who pulled together that proposal that
passed this body 75 to 24 on that night in late September of 2008. So
my admiration for Senator Gregg--and among other accomplishments he has
had during his service here--is strong.
This proposal, however, goes way beyond anything I have ever quite
seen here, which basically says the Federal Government cannot provide
any help to States and local governments. Then the wording of it: even
if you might be in trouble.
I go back and I think of New York City, a major metropolitan area of
our country, which was in economic difficulties. I do not remember the
history, exactly, of what occurred that brought the city to that fiscal
brink, but it was serious enough, and there was a serious debate here
that occurred before I became a Member of this body over what could be
done to help put that city back on its feet again.
As a result of the efforts, both in New York, New York State, as well
as here, New York recovered, paid back whatever it was it received in
financial assistance, and, arguably, the most important metropolitan
area of our Nation survived a fiscal disaster.
Again, now, through the IMF and the World Bank, we appropriate moneys
each and every year to support international organizations that have as
one of their purposes--or their purpose is to provide financial
assistance and stability to nations that are struggling. In many cases,
I suspect they are struggling for exactly the same reason my colleague
and friend from New Hampshire has identified: They made bad choices,
bad decisions. I am not suggesting their problems were afflicted by
outside forces, although that could happen.
Certainly what we are watching today in Europe is a classic example,
where you have other nations now in trouble because of one Nation's I
will even call it fiscal irresponsibility. I am not sure that is the
final conclusion, but let's call it that. Yet we find the declining
Euro, we find debt in trouble in that country, so other nations are
feeling the effects of it.
We have all seen where events could occur in our own country: The
automobile industry in Michigan ends up in deep trouble. That has an
impact on other States. It certainly affects the economy of Michigan.
The idea is ``one nation,'' and we are one nation. We are not Europe
where we have separate political structures and separate rules and
regulations and one currency which pose difficulties. We are one people
here, whether you live in New Hampshire or Connecticut or Arizona or
Alaska or Hawaii or Texas or Oklahoma. Wherever it is, we are one
people.
Lord knows, we do not want to reward irresponsible behavior on the
part of a local government or a State. But the idea that we are going
to terminate or not provide any kind of assistance because we have
drawn the conclusion, in the wording of this amendment, as I read it in
this language here:

The Board of Governors shall not, directly or indirectly,
lend against, purchase--

All these things we could do here--

State government, municipal government, local government,
or county government [that] has defaulted on its obligations,
is at risk of defaulting, or is likely to default. . . .

Who makes that determination: ``is likely to default'' or ``is in
danger of''? Is there some omnipotent force that is going to lean over
all of this and say: I think such and such a county or such and such a
State is ``in danger of''? That is pretty vague language here to
decide, all of a sudden, regardless of the reasons.
We have excluded natural disasters. I appreciate that addition to
this amendment. But there can be other factors which can contribute to
these circumstances in a State.
Again, according to the language on the first page of the amendment,
it says:

Notwithstanding any other provision of law, no Federal
funds may be used to purchase or guarantee obligations of,
issue lines of credit to or provide direct or indirect
grants-and-aid to, any State. . . .

I remind my colleagues that is a pretty broad, sweeping proposal.
Medicaid; the Children's Health Insurance Fund; the CDC's disease
control, research, and prevention programs; the Special Supplementary
Nutrition Program for Women, Infants, and Children; the Unemployment
Trust Fund; Veterans Health Administration medical services; Department
of Justice, State, and local enforcement assistance; FEMA--FEMA, I
guess, may be excluded because of ``a natural disaster''--but the idea
we would be depriving a State of these resources seems to me would only
exacerbate the problem.
Again, I will acknowledge in certain circumstances local governments
or State governments have made irresponsible choices. But you do not
blame the entire population of that State or locality because some
leadership has made a bad choice and then cut off Medicaid, nutrition
assistance, and so forth. Do you blame a child living in a State
because some Governor, a mayor, a county executive has made dumb
decisions, and all of sudden, we say: ``I am sorry, you happen to live
in that State. You are going to have to move. Go someplace else in
order to get help''?
I, for the life of me, do not understand. I understand the
frustration we all feel when we read about States and localities that
could have made better decisions. But, again, I remind my colleagues
here, we are one Nation--one Nation. ``E Pluribus Unum''--they are the
words right above the Presiding Officer's chair--``from the many,
one.'' We are many: Over 300 million in 50 States and hundreds and
hundreds of jurisdictions across the country. Thank the Lord we are not
just some collection of disparate entities bound together by a common
currency and little else. We are bound together by much more as a
nation.

So I hope my colleagues, at 12:05 or thereafter when we vote on this,
would say respectfully to our friend from New Hampshire that this
amendment ought to be rejected.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Hampshire.
Mr. GREGG. Mr. President, I admire the Senator from Connecticut and I
appreciate what he has done in his efforts to stabilize the financial
industry in this country. At the core of what he has done, of course,
is to say: No more bailouts. That is essentially what this bill is
about: No more bailouts; the taxpayers of this country will not step up
and bail out large financial institutions which have taken actions
which have put them at risk financially, and the only people who should
bear that burden are the stockholders and the unsecured bondholders of
those institutions.
What this bill also says is no bailouts, no bailouts for States which
are in default or about to default on their debt. They are doing it not
as a result of some external event forcing them into dire straits but
because they simply spent their way into a fiscal situation where they
can't pay their own debts. Why should the people of Connecticut, the
people of New Hampshire have to bail out the people of California--
let's be honest about this; this is about California, the people of
California--because their government has been totally irresponsible in
spending for a large number of years, has created a massive obligation,
especially in their public pension programs, which they can't afford to
pay? Why did they run up those obligations? So that people who were
running for office in California could get elected. Just promise this,
promise that, promise this, promise that. Then, the people in New
Hampshire are supposed to pay to help those people get elected on those
promises which they could never fulfill and for which they created
obligations to pay for? I don't think so. I don't think that is fair or
right.
If the people of New Hampshire and the people of Connecticut and the
people of New Mexico have been fiscally responsible in the managing of
their towns and their cities and their States

[[Page S3861]]

and their counties, why should they suddenly have to pay for California
which hasn't been? Clearly, they shouldn't. If we are going to have a
no bailout bill, it ought to apply to California as well as to large
financial institutions that have acted inappropriately and unwisely.
That is all this says. It doesn't say you are not going to be able to
get your usual Federal assistance that comes through the usual course
of action. That is a bit of hyperbole. I appreciate the intensity and
energy of the Senator from Connecticut, but that is hyperbole. This is
about not having Federal funds be available to States that are in
default or about to go into default on their debt as a result of the
actions of the State leadership as elected by the people of that State
and not asking the people in the rest of the country to have to pay the
cost of those inappropriate actions and those actions which were
fiscally irresponsible. It seems like a proposal which is totally
consistent with the basic purpose of this bill, which is to end
bailouts.
I reserve the remainder of my time.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Mr. President, I will not take a long time to respond.
First of all, the distinction between a public company--and, again,
my colleague is absolutely correct; we want to end bailouts of those
companies, and we certainly want to discourage the kind of behavior
that can put a county or a city or a community or a State in fiscal
jeopardy.
But the legislation also looks backward. On page 2 of the amendment
it says: ``Municipal government, local government, or county government
which has defaulted on its obligation.'' So it isn't just those that
may default. Orange County, CA, for instance, defaulted, and worked
itself out of its difficulties. But now I am to understand that because
Orange County was in default a number of years ago, got out of its
difficulties, yet the adoption of this amendment would preclude Orange
County potentially from getting any kind of assistance. I don't
understand that.
Again, there are a lot of reasons, aside from natural disasters, why
this can happen. Some of them have nothing to do--a major industry
which all of a sudden finds itself departed. How many times have we
seen a company located in a State or a locality, particularly a county,
that is the major employer, employs thousands of people, all of a
sudden go offshore. There is a dramatic decline in tax revenues that
come in. So that community's obligations to its citizenry on education,
health, highways, everything else, all of a sudden are in jeopardy.
That is not mismanagement of the government. It is that company made
the decision to leave. All of a sudden we find an area in trouble and
they turn to their national government for some help, and we are
saying: Well, because you are at risk of defaulting--not that you have
defaulted; the language is, ``is likely to default or at risk to
default,'' you can't get any help because you might be in trouble, not
because you have done anything wrong necessarily but because it has
happened to you. I just feel that such a step would be draconian, in
the extreme, when it comes to the people of our Nation who, from time
to time, need help with that list of obligations that would have to be
curtailed if a community is likely to or is at risk of defaulting or
has defaulted on its obligations. Over what period of time? Are we
talking about 10 years, 20 years, over 100 years? How far do I go back
to determine whether someone has defaulted? What were the reasons for
it that occurred at that time? It provides none of that relief, except
that maybe it was a natural disaster.
Ms. STABENOW. Would my distinguished colleague yield for a question?
Mr. DODD. I am happy to yield.
Ms. STABENOW. First, I would say to our distinguished chair of the
Banking Committee that when you describe communities where businesses
have collapsed and left communities struggling, certainly we have many
of those in Michigan. Through no fault of the communities, and many
times through no fault of businesses in terms of our recession right
now, we have many communities in this situation.
Would the Senator from Connecticut agree that what we are talking
about is not the cities or counties but the local communities and what
happens? It is people. It is whether they are going to have a police
force, police on the street or whether they are going to have the
firefighters being able to answer if there is a fire or whether they
are going to be able to pick up the garbage or whether they are going
to be able to do snow removal on the streets. Aren't we talking about
whether communities--people, families, and communities--if they need
help, whether we would be able to respond to them? So it is not about
the government; it is about whom it serves and the people who would be
hurt through something such as this; would the Senator agree?
Mr. DODD. Mr. President, my colleague from Michigan is absolutely
correct and that was the point I made earlier and she makes it even
more strongly. Again, I don't want to sound like I am in a civics
class, but we are not just sort of a collection of disparate States and
communities, we are a country, we are one Nation. It has been a great
source of our strength. Our country has been through difficult times
periodically, obviously through some natural disasters, through some
manmade disasters. We are dealing with one as we speak. That is not a
natural disaster occurring in the Gulf of Mexico; that is a manmade
one. People didn't put in the proper safeguards and all of a sudden we
are looking at the worst environmental disaster maybe in our Nation's
history.
What do we say to the States of Louisiana or Alabama or Florida,
depending upon where these currents flow, and all of a sudden we find
major industries--tourism, for instance, in the State of Florida. I
don't know what percentage of the economy of that State depends upon
tourism, but I suspect a pretty heavy number. All of a sudden beaches
are closed on the west coast of Florida. Maybe that current brings it
around to the east coast. All of a sudden hotels and resort areas are
shut down. The economy begins to falter. A manmade disaster, created
through the fault of some engineers or whoever else, of an oil company:
What do we say if this amendment was adopted? I am sorry, Florida. It
is in danger of defaulting or at risk of defaulting on its obligations
because the revenues that would come into that State through the normal
exercise of its business practices was affected not by a natural
disaster but by one created through the fault, malfeasance or
misfeasance of a company that caused this kind of danger--or Louisiana,
which has already been through a natural disaster and is now facing
this one, or Alabama as well and its coastline.
So, again, for all these reasons, I urge my colleagues to reject this
amendment. I thank my colleague from Michigan for making her points.
I reserve the remainder of my time, yield the floor, and note the
absence of a quorum. I ask unanimous consent that the time be charged
equally between the two sides.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. DODD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendment No. 3884, as Modified

Mr. DODD. Mr. President, on behalf of Senator Cantwell and others, I
ask unanimous consent to send a modification to the desk.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment, as modified, is as follows:

At the end of subtitle C of title I, add the following:

SEC. 171. LIMITATIONS ON BANK AFFILIATIONS.

(a) Limitation on Affiliation.--Beginning 2 years after the
date of enactment of the Restoring American Financial
Stability Act of 2010, no member bank may be affiliated, in
any manner described in section 2(b), with any corporation,
association, business trust, or other similar organization
that is engaged principally in the issue, flotation,
underwriting, public sale, or distribution at wholesale or
retail or through syndicate participation stocks, bonds,
debenture, notes, or other securities, except that nothing in
this section shall apply to any such organization which shall
have been placed in formal liquidation and which shall
transact no business, except such as may be incidental to the
liquidation of its affairs.

[[Page S3862]]

(b) Limitation on Compensation.--Beginning 2 years after
the date of enactment of the Restoring American Financial
Stability Act of 2010, no officer, director, or employee of
any corporation or unincorporated association, no partner or
employee of any partnership, and no individual, primarily
engaged in the issue, flotation, underwriting, public sale,
or distribution, at wholesale or retail, or through syndicate
participation, of stocks, bonds, or other similar securities,
shall serve simultaneously as an officer, director, or
employee of any member bank, except in limited classes of
cases in which the Board of Governors of the Federal Reserve
System may allow such service by general regulations when, in
the judgment of the Board of Governors, it would not unduly
influence the investment policies of such member bank or the
advice given to customers by the member bank regarding
investments.
(c) Prohibiting Depository Institutions From Engaging in
Insurance-Related Activities.--
(1) In general.--Beginning 2 years after the date of
enactment of this Act, in no case may a depository
institution engage in the business of insurance or any
insurance-related activity.
(2) Definition.--As used in this section, the term
``business of insurance'' means the writing of insurance or
the reinsuring of risks by an insurer, including all acts
necessary to such writing or reinsuring and the activities
relating to the writing of insurance or the reinsuring of
risks conducted by persons who act as, or are, officers,
directors, agents, or employees of insurers or who are other
persons authorized to act on behalf of such persons.

Mr. DODD. I note the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. BOND. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BOND. Mr. President, I ask unanimous consent to speak for 2
minutes remaining on Senator Gregg's time.
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendment No. 4051

Mr. BOND. Mr. President, the argument has been made that this bill
would somehow limit responses to natural or manmade disasters, a
natural disaster such as a flood or a tornado, a manmade disaster such
as what is occurring in the gulf.
I have read this language. It is very clear. It is talking about
defaulting on obligations. It in no way restricts the ability of the
Federal Government to respond to disasters.
I used to chair the subcommittee on the Federal Emergency Management
Act, and when there was a disaster, we provided money for those
disasters, to deal with those disasters. But one cannot continue to
present unbalanced budgets and enact them into law and continue to
drive up the debt and say it is because of a natural or manmade
disaster.
That is a stupid decision. I don't think the taxpayers of the United
States should be in a position of bailing out governments that make bad
decisions and that, year after year after year, spend more money than
they are taking in on their ongoing obligations. It has nothing to do
with a sudden natural disaster or even a manmade disaster such as the
spill in the gulf, which is partly natural and partly manmade. I agree
that we should not stop providing assistance where there is such a
disaster, but that is not the focus of this amendment.
I urge my colleagues who really believe we should not be promising to
bail out profligate States that continue to spend more than they take
in, we should not bail them out with taxpayer funds.
I yield the floor.
Mr. GREGG. Mr. President, how much time remains?
The PRESIDING OFFICER. Two minutes 40 seconds.
Mr. GREGG. Mr. President, I really think the Senator from Connecticut
is sort of reaching in his arguments here. This is really about a State
like California defaulting and the rest of us having to pay for it.
That is what this is about. This is about a State that has been
irresponsible, to be kind, with its spending and now finds itself in a
situation where it cannot pay its debt. You know the legislators of
that State are saying: Let's go to Washington and get the money so that
we can get reelected on the basis of spending all this money. That is
not fair. That is not how a federalist system is supposed to work. You
cannot argue that the American system was set up so that when one State
would be profligate, another State would have to pay for the cost of
that profligateness.
The Senator's bill uses this same language. The Senator from
Connecticut had phraseology that claimed my language as inappropriate
on the issue of default and how he defined it, and it basically mirrors
his language in title II. If it works in title II, it ought to work
here.
The real issue is that we should not set up a situation where States
and communities can expect to spend a lot more than they can take in,
know they are spending more than they are taking in, run up a lot of
debts they cannot pay, and then come to the rest of America and say:
You pay our debts because we want to get reelected. That is what this
is about. It is limiting the ability of States to act in a fiscally
irresponsible manner and expect the country will stand behind them and
bail them out.
I reserve the remainder of my time.
The PRESIDING OFFICER. Who yields time?
Mr. GREGG. Mr. President, I ask unanimous consent that the time run
equally against both sides.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. GREGG. I yield the floor.
The PRESIDING OFFICER. All time has expired.
The question is on agreeing to the Gregg amendment.
Mr. GREGG. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second? There is a
sufficient second.
The clerk will call the roll.
The bill clerk called the roll.
Mr. DURBIN. I announce that the Senator from West Virginia (Mr.
Byrd), the Senator from Arkansas (Mrs. Lincoln), and the Senator from
Pennsylvania (Mr. Specter) are necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 47, nays 50, as follows:

[Rollcall Vote No. 153 Leg.]

YEAS--47

Alexander
Barrasso
Baucus
Bayh
Bennett
Bond
Brown (MA)
Brownback
Bunning
Burr
Chambliss
Coburn
Cochran
Collins
Corker
Cornyn
Crapo
DeMint
Ensign
Enzi
Feingold
Graham
Grassley
Gregg
Hatch
Hutchison
Inhofe
Isakson
Johanns
Kyl
LeMieux
Lugar
McCain
McCaskill
McConnell
Murkowski
Risch
Roberts
Sessions
Shaheen
Shelby
Snowe
Tester
Thune
Vitter
Voinovich
Wicker

NAYS--50

Akaka
Begich
Bennet
Bingaman
Boxer
Brown (OH)
Burris
Cantwell
Cardin
Carper
Casey
Conrad
Dodd
Dorgan
Durbin
Feinstein
Franken
Gillibrand
Hagan
Harkin
Inouye
Johnson
Kaufman
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Menendez
Merkley
Mikulski
Murray
Nelson (NE)
Nelson (FL)
Pryor
Reed
Reid
Rockefeller
Sanders
Schumer
Stabenow
Udall (CO)
Udall (NM)
Warner
Webb
Whitehouse
Wyden

NOT VOTING--3

Byrd
Lincoln
Specter
The PRESIDING OFFICER. On this vote, the yeas are 47, the nays are
50. Under the previous order requiring 60 votes for the adoption of
this amendment, the amendment is withdrawn.
The Senator from Connecticut is recognized.
Mr. DODD. Mr. President, in a minute I will note the absence of a
quorum, but we are working on a consent agreement that would schedule
two votes after the weekly caucus conference lunches. We will possibly
be able to do that. We are trying to get that written up. As soon as we
get it written up, I will present it. But I see my colleague from Texas
is ready to speak, so I will yield the floor and let her go ahead.
The PRESIDING OFFICER. The Senator from Texas is recognized.
Mrs. HUTCHISON. Mr. President, I was going to speak on the amendment
Senator Landrieu and I have, the Hutchison-Landrieu amendment. I will
be happy to yield any time the chairman of the committee wishes to
clarify. Until he does, I will speak on the

[[Page S3863]]

Hutchison-Landrieu amendment, which is an amendment that has been filed
but is not yet pending.
This is an amendment that will provide a permanent exemption for
publicly traded small businesses with less than $150 million from the
costly reporting requirements mandated by section 404(b) of the
Sarbanes-Oxley Act. In removing this great burden, our amendment will
free small businesses to focus on the capital investment and job
creation that we need now to get our Nation's economy back on the right
track.

In 2002, Congress passed the Sarbanes-Oxley Act in the aftermath of
the huge accounting frauds at Enron, Tyco, and Worldcom. This landmark
bill was enacted to restore investor confidence in the wake of these
shocking abuses by making it harder for companies to misrepresent
corporate earnings.
Hindsight is 20-20, though, and, while the Sarbanes-Oxley Act was
well intentioned, it has created unexpected and unprecedented costs for
the small to medium sized businesses that serve as the backbone of our
economy.
The main culprit of this immense burden on small businesses is
section 404 of Sarbanes-Oxley. Here a public company is required to
include in its annual report an assessment of the effectiveness of its
internal control structure and procedures for financial reporting. The
company's auditor must attest to and report on the company's
assessment.
The compliance costs of section 404(b) have been far greater than
expected. In 2009, the SEC reported that companies paid an average of
$2.3 million to comply with section 404. When taking into account the
size of a company, small businesses with less than $150 million in
public float, or the shares held by outside investors, are
disproportionately encumbered by section 404(b), facing a compliance
cost that is seven times greater than large companies.
Small businesses are being forced to tie up time and money on
burdensome amounts of paperwork. They should be directing these
resources toward operations and capital investment that will create
jobs and spur our economy toward recovery. The Hutchison-Landrieu
amendment will fix this issue, ensuring that smaller public companies
will no longer be subject to the cost burden imposed by section 404(b).
Under current SEC rules, small public companies with less than $75
million in public float are now exempt from section 404(b). However,
this exemption expires in June. The Hutchison-Landrieu amendment builds
on this existing exemption and takes into account recommendations from
the SEC to increase the exemption. Our amendment will permanently
exempt small businesses with less than $150 million in public float
from the section 404(b).
I am pleased that my amendment has the strong bipartisan support of
my colleague, the distinguished chair of the Small Business Committee,
Senator Landrieu. I also thank our other cosponsors, Senator Bob
Bennett, Senator Scott Brown, Senator Crapo, Senator DeMint, and
Senator Hatch.
We are offering our amendment on behalf of the small businesses
across our country that face this disproportionate burden. We have the
support of: The Biotechnology Industry Organization, The Competitive
Enterprise Institute, TechAmerica, The Association for Competitive
Technologies, Advanced Medical Technology Association, and Technet.
These groups represent the companies that want to innovate. That want
to grow. They want to excel. But their companies are spending vast
amounts of money on compliance costs, and, according to an SEC study,
this money is being misdirected. The SEC reports that 75 percent of
companies believe that the attestations of auditors required by
Sarbanes-Oxley have little to no impact on investor confidence. Thus,
rather than devoting important resources to invest and create jobs,
small businesses are spending millions of dollars on paperwork that
investors don't even care about.
Our amendment also has the support of the Independent Community
Bankers of America, and the American Bankers Association. Our community
banks want to lend to worthy entrepreneurs and help jump start our
economy. But our entrepreneurs and small businesses are hesitant to
grow if they are hit with the high costs associated with 404(b)
compliance.
We are also offering this amendment because of the unintended
consequences on our initial public offering market brought by section
404(b). Since the enactment of Sarbanes-Oxley in 2002, IPOs in the
United States have been lower each year than in every year of the
1990s. Even in 2006, the peak year of economic growth after Sarbanes-
Oxley, the 162 U.S. IPOs were far below the 295 IPOs issued in 1991
when our economy was mired in recession. This drop-off in IPO's hit the
map in 2008 and 2009, when, according to a Renaissance Capital report,
the IPO level was lower than any period since the Vietnam war.
Why is this? Why are companies avoiding initial public offerings? Why
are companies refusing to access the capital that the stock markets
provide? Quite frankly, companies do not want to deal with onerous
burden of Sarbanes-Oxley. And based on the costs I mentioned, who can
blame them?
This provision incentivizes small businesses to remain private to
avoid 404(b) altogether. Worse, it incentivizes small businesses to go
abroad to markets such as the London Stock Exchange, which has
advertised itself as a Sarbanes-Oxley Free Zone, to encourage our
companies to do their IPOs there instead of in Ameirca.
Small businesses should not be incentivized to stop growing or list
overseas. The Hutchison-Landrieu amendment also has the support of the
New York Stock Exchange and NASDAQ, who want to see American companies
list here and remain home-grown. Now more than ever, we should be
encouraging our Nation's small businesses to invest in new jobs, plants
and markets. Our amendment will help small businesses do this by
reducing their paperwork costs. A similar measure was included in the
House financial reform language, and with immense bipartisan support. I
ask my colleagues to support the Hutchison-Landrieu amendment to
permanently exempt small businesses under $150 million from Sarbanes
Oxley section 404(b), to ensure that small businesses can fully devote
their resources toward being the engines that drive our Nation's
economy.
I ask unanimous consent to have printed in the Record the editorial
that appeared today in the Wall Street Journal that is entitled ``The
No-Cost Stimulus.''
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From the Wall Street Journal, May 18, 2010]

The No-Cost Stimulus

Senate Majority Leader Harry Reid wants a floor vote this
week on financial regulatory reform, and he should first add
at least one provision worthy of the name. Senators Kay
Bailey Hutchison (R., Texas) and Mary Landrieu (D., La.) have
offered an amendment to spare the smallest public companies
from the worst bureaucratic horrors of the 2002 Sarbanes-
Oxley law.
Sarbox, the Beltway's previous attempt at financial-
regulatory reform, was intended to improve the information
investors receive about public companies. The law did nothing
to prevent poor disclosure at companies like Lehman Brothers
but it did saddle the U.S. economy with billions in
unexpected costs. Even the Securities and Exchange
Commission, a Sarbox cheerleader, found in a 2009 survey that
the average public company pays more than $2 million per year
complying with the law's Section 404. The indirect costs may
be much greater, as initial public offerings of U.S.
companies have never returned to pre-Sarbox levels.
The SEC admits that compliance burdens fall
disproportionately on smaller companies. This is one reason
the two Senators aim to exempt companies with less than $150
million of shares held by the public from ``internal-
controls'' audits.
These audits are piled on top of the traditional financial
audit, and on top of a company's own internal-controls
review. The result is that going public in the U.S., once the
dream of entrepreneurs world-wide, has for too many company
founders become something to avoid. If President Obama is
hoping for an unemployment rate below 9%, encouraging these
job creators is an obvious step.
Thanks to New Jersey's Republican Scott Garrett and
Democrat John Adler, the House has already passed a similar
reform. Now the Senate should allow America's most innovative
companies to create jobs at no cost to taxpayers.

Mrs. HUTCHISON. Mr. President, this editorial that appeared in the
Wall Street Journal today says we can have

[[Page S3864]]

a stimulus that will cost taxpayers nothing by freeing our small
businesses and especially our entrepreneurial and high-tech businesses
from the burdens of all this paperwork and instead let them focus on
growing, on listing their IPOs in America for the benefit of the
American economy. That is what we should be doing, and that is what the
editorial says.
I hope very much my colleagues will listen and we will be able to
pass the Hutchison-Landrieu amendment, hopefully by voice vote. This
should be a unanimous amendment passage.
I yield the floor.
The PRESIDING OFFICER. The Senator from Connecticut is recognized.
Mr. DODD. Mr. President, I want to propound a unanimous consent
request. It has been cleared on both sides. I ask unanimous consent
that at 2:15 p.m., the Senate consider the following two amendments:
Senator Corker of Tennessee, amendment No. 4034, and Senator Carper of
Delaware, amendment No. 4071, which is side-by-side to the Corker
amendment; that the amendments be debated concurrently for a total of
30 minutes, with the time equally divided and controlled between
Senators Carper and Corker or their designees; that upon the use or
yielding back of time, the Senate proceed to vote in relation to the
Corker amendment, to be followed by a vote in relation to the Carper
amendment, with no amendment in order to either amendment prior to a
vote.
The PRESIDING OFFICER. Without objection, it is so ordered.

____________________