FHA Multifamily Loan Limit Adjustment Act of 2003

Mr. President, I rise today to introduce the Small Business Credit Liquidity Act of 2003, and I am pleased to be joined by my colleagues, Senator Pryor and Senator Bond, as sponsors of this bill.

The genesis of this legislation was a proposal made by the Small Business Administration. When the President's Fiscal Year 2004 budget request was transmitted to the Congress this past February, it stated that the SBA was exploring a possible new approach to expand the opportunities of small businesses to access capital markets by facilitating the securitization of non-SBA small business loans, i.e., loans that were not already guaranteed by the SBA. Increasing access to capital is a high priority of small businesses, and has been one of the Committee's priorities throughout its history. We are always seeking innovative ways to increase access to capital for small businesses, while at the same time measuring the cost and risk of loss that the Federal government must incur to facilitate such financing. Accordingly, we recognized the potential benefits of this proposal for small businesses across the Nation.

At our roundtable on April 30, 2003, the Committee discussed the idea of the securitization of non-SBA small business loans. The SBA reported that it had been exploring this type of program for some time and thought the idea had considerable merit. The agency was uncertain, however, whether it had the statutory authority to develop and implement such a program, absent legislative authorization. After the roundtable, we consulted with the SBA and with participants in the small business financing industry to determine the program's appropriate elements.

In addition to the support the SBA expressed for the proposal in its budget request, at the Committee's roundtable, and in subsequent discussions with Committee staff, the SBA took other steps to help make the proposal a success. For example, the agency entered into a contract with Dun & Bradstreet and with Fair, Isaacs, Co., to create a credit scoring model for small businesses, similar to individual consumer credit scores, to help small businesses gauge their credit quality. The scoring model will be an important asset to the pooling proposal by providing uniformity of pricing, thus reducing one obstacle to the securitization of non-SBA small business loans. The Office of Advocacy of the SBA has also helped build support for the proposal by publicizing the need to take the foundational steps to build a secondary market for small business loans, rather than later trying to create such a market in one step when economic pressures called for an immediate response.

Support for a program to securitize small business loans has also been advocated by the Board of Governors of the Federal Reserve System. In its September 2002 Report to the Congress on the Availability of Credit to Small Businesses, the Federal Reserve stated that the securitization of small business loans could ``substantially influence the availability of credit'' to small businesses. The Federal Reserve noted that one primary benefit of a secondary market would be that small business borrowers could enjoy lower financing costs.

In addition to the Federal Reserve report, other studies have shown that small businesses could benefit from an efficient secondary market for small business loans. Several, including the Federal Reserve report, have noted that a primary obstacle to a wide-spread secondary market for small business loans has been the lack of standardized information to evaluate and price small business loans efficiently for resale. As noted, the SBA has exercised foresight by securing the contract with Dun & Bradstreet and Fair, Isaacs to address this problem. With the information provided by this new credit-scoring model, the securitization of non-SBA small business loans will be far more feasible.

With input from the SBA, small businesses, and financial firms in hand, and having considered many studies regarding small business credit and the effectiveness of secondary markets, we included a provision similar to this Act in S. 1375, the Small Business Administration 50th Anniversary Reauthorization Act of 2003, which was approved unanimously by the Committee on July 10, 2003.

Working with Senator Pryor and with other colleagues, we endeavored to provide sufficient specificity in the instructions the legislation gives the SBA regarding the pilot program, so as to ensure that the pooling proposal provides the greatest benefit to small businesses in need of capital while limiting risk to the Federal government.

Unfortunately, despite all the hard work and input from the SBA and from other participants in the small business financing industry, some apparently either failed to recognize or understand the benefits for small businesses that exist in this idea that originated with the SBA. In the interest of expediting the passage of S. 1375 before the SBA's authorizing legislation expired, I reluctantly removed that provision from S. 1375 to focus on those elements of the bill that had to be enacted before the legislation expired. I continue to appreciate the benefits of this proposal, and I am now introducing this provision as a separate bill. With the support this proposal already has, I am confident we can implement this innovative program, and I look forward to the benefits it can provide as we try to assist small businesses to prosper, create more jobs, and pull the economy out of its current doldrums.

The Small Business Credit Liquidity Act of 2003 authorizes the Small Business Administration (SBA) to develop and implement an innovative three-year pilot program to facilitate the securitization of small business loans in order to increase the liquidity of capital available to small businesses. Under the pilot program, the SBA could provide partial guarantees on pools of securitized small business loans that are not otherwise guaranteed by the SBA. The legislation seeks to increase capital available to small businesses, without creating additional risk for the government since the SBA's guarantees would be paid for by fees charged to the financial firms administering the pooling of loans, and thus no appropriations will be necessary.

I believe this pilot program has a great potential to provide increased access to capital on terms that are beneficial to small businesses. The pilot program will also allow lenders, including small lenders such as community banks, to utilize their capital better, and make more loans available to small businesses on better terms, by increasing the liquidity of existing loans.

The pooling structure is based on similar arrangements for home mortgages, credit card loans, and car loans, which have active secondary markets based upon their pooling and securitization. The increased liquidity of loans provided by a secondary market allows lenders to be confident that the loans they make can be sold to investors, so that the lenders can utilize again capital that is otherwise locked into existing loans. In addition, because lenders receive a quick ``turnaround'' on the loans that they make and then sell to investors, the profit that the lenders receive from the interest rates charged to borrowers becomes less important for the lenders, who can receive a smaller per-loan profit, but increase the number of loans they make, and thereby receive a greater profit. Lenders are thus able to make more loans and to provide better terms to borrowers on those loans.

As Chair of the Committee on Small Business, I realize that access to credit for small businesses is often a challenge. The Committee has consistently found that encouraging more lending to small businesses that have a likelihood to succeed, grow, and create new jobs is a sound national policy. The pilot program takes advantage of the successful example of the prior securitizations of SBA small business loans, and of changes in the investment community, to facilitate lending in the small business community for years to come.

This pilot program is not a departure from the SBA's current practice of guaranteeing loans and regulating the securitization of those loans. The SBA already regulates the securitization of both guaranteed portions of 7(a) and 504 loans to small businesses and non-guaranteed portions of the same loans. These loans are made both by Federally- regulated lenders and by lenders that are not federally regulated. In Fiscal Year 2002, the SBA regulated the securitization of $3.4 billion in government-guaranteed 7(a) loans to small businesses. When the guaranteed portions of the 7(a) loans are securitized separately from the non-guaranteed portions, the SBA is guaranteeing 100 percent of the loan pools.

This bill authorizes a pilot program with a much more modest SBA involvement than is represented by the SBA's current financing programs. Under the pilot program, financial firms approved by the SBA would pool loans not individually guaranteed by the SBA. These pooling entities would then issue securities offering returns based upon the returns from the loans in the pool. The securities would be rated by a rating agency and sold to investors.

The pooling entities, also known as ``loan poolers,'' would also offer a partial ``first-loss'' guarantee to investors on the securities' returns. If the loans had insufficient returns to pay the expected returns on the securities, the pooling entities' guarantees would be the first guarantees called into performance to pay investors. The SBA would issue partial, not complete, ``second-loss'' guarantees on the return from the securities, but not on individual loans within the pool. The agency's guarantees would thus be available only after the first-loss guarantees offered by the loan poolers are exhausted.

Significantly, the cost of the SBA guarantees will be fully funded by fees paid by the loan poolers, so no Federal appropriations will be necessary. The bill provides that the SBA will adjust the fees required from the poolers under the pilot program annually, as necessary.

The legislation also includes other provisions to ensure that the pilot program will not lead to increased risk or liability for the government. In particular, it caps the SBA's guarantees on any loan pool at a maximum of 25 percent of the value of the securities issued for that loan pool. In contrast, the SBA's guarantees for the 7(a) and 504 loan programs are as high as 90 percent and 40 percent, respectively, of each loan in those programs. Moreover, in the 504 loan program the SBA is in a first-loss position, sustaining the loss of its full guaranteed amount on a defaulted loan before the private lender incurs any loss, whereas in the pilot program the SBA will be in a second-loss position.

In addition, the bill requires that firms licensed as loan poolers adhere to certain standards, such as being well-capitalized and maintaining sufficient reserves. The bill also provides that the SBA will set standards for the licensed poolers and will review these entities annually to verify that they are conforming with SBA requirements. Among the requirements the SBA would establish for such loan poolers would be standards relating to loan delinquency, default, liquidation, and loss rates. If any licensed loan pooler fails to meet the SBA's standards, the SBA may terminate the pooler's participation in the pilot program.

To ensure that the pilot program is initially implemented on a manageable scale, the legislation specifies that no individual loan pool created by a licensed pooler will exceed $350 million in loans in fiscal year 2004, $400 million in loans in fiscal year 2005, or $450 million in loans in fiscal year 2006. The bill also specifies that the SBA's total guarantees under the pilot program will not exceed $2.1 billion for fiscal year 2004, $3.25 billion for fiscal year 2005, or $4.5 billion for fiscal year 2006.

Finally, this legislation requires three separate types of reports to ensure that the pilot program is properly monitored and evaluated. First, the SBA must provide to the Senate and House Committees on Small Business a report detailing the pooling program before it is implemented, and wait 50 days after submitting the report before implementing the program. In addition, the SBA must file with the Congress, in the SBA's Budget Request and Performance Plan, an annual report about the program's performance. To strengthen the on-going oversight of the pilot program, the bill also specifies that the SBA's annual report to Congress will include information about the pooled loans, including delinquency, default, loss, and recovery rates. Third, the GAO is required to study the program once implemented, and report on the program's performance, including any effects the program may have on the 504 or 7(a) programs, before calendar year 2006.

My Small Business Committee has received expressions of support for the pilot program from representatives of thousands of small businesses that believe the program could improve access to capital, and could improve the terms of loans received, for many small businesses, particularly those without significant real estate property to use as

collateral. In particular, support for the program has been expressed by minority-owned small businesses and by women-owned small businesses. For these small businesses, which often have less real estate collateral than other small businesses, this pilot program holds great potential for creating capital resources to meet their financing needs.

For instance, a recent study by the SBA's Office of Advocacy, issued in September 2003, reveals that small businesses owned by women are more likely than other small businesses to rely on expensive personal credit cards to finance the business, rather than more traditional types of loans. For these small businesses, an increase in the availability of traditional business loans, with lower financing costs and on terms beneficial to the borrowers, would be a welcome development.

In addition, the same study showed that minority-owned small businesses, in addition to being less likely than other small businesses to obtain credit, were far less likely to obtain their credit from traditional Federally regulated depository institutions, and were more likely to resort to financing their businesses through sources such as family, friends, and acquaintances of the business owners. While this bill does not address subjective lender behavior, it does address the objective cost/profit opportunity presented to a lender by a loan to a small business, including a minority-owned or women-owned small business. If a lender is able to sell a conventional small business loan in an efficient secondary market, the potential downside cost of the loan to the lender, e.g., its default risk, is decreased, and the lender is assured that its capital will still be available for other loans.

Financial firms currently involved in the pooling and securitization of loans issued in the SBA's two primary loan guaranty programs, under Section 7(a) of the Small Business Act (``7(a) loans'') and under Section 504 of the Small Business Investment Act of 1958 (``504 loans''), have also expressed their support for the program, and have stated their belief that it will increase small businesses' access to effective capital.

In closing, the Small Business Credit Liquidity Act of 2003 is an innovative approach to a persistent problem for small businesses in this country--access to capital. I believe it has the potential to address this problem for small businesses with effectively no risk to the Federal Government. At a time when our small enterprises are helping to lead the country back onto the road to economic recovery, we should be doing all we can to eliminate obstacles facing small businesses, which hold the greatest potential for job creation in America today. This bill is an important step in that direction, and I urge my colleagues to join me in supporting its enactment.

I ask unanimous consent that the text of the bill and a summary of its provision be printed in the Record.

Mr. President, I am very pleased to be joining today with Senator Levin in introducing the Independent Counsel Reform Act of 2003. With this bill, we hope to convince our colleagues that an improved independent counsel statute can serve an essential purpose. We want to convince our colleagues that our legislation will preserve the ideals that motivated the enactment of this statute in the years after Watergate, that no person is above the law, and that our highest government officials must be subject to our laws in the same way as any other person. If they are guilty, they must be held accountable. If they are not, they must be cleared. In these cases the American people are more likely to trust the findings of an independent counsel's investigation and conclusions. Officials who are wrongly accused will receive vindication that is far more credible to the public than when it comes from the Department of Justice. As a result, the public's confidence in its government is enhanced by the independent counsel statute.

In 1999, as the independent counsel law was expiring, I joined with Senators Levin, Specter, and Collins in introducing the Independent Counsel Reform Act of 1999. That year, we drafted new provisions to curb the excesses we had seen in some of the investigations conducted under the prior incarnation of the law. The revisions ensure that there will be fewer Independent Counsel appointed, and that their actions will in many respects be constrained by the same sorts of guidelines and practical restraints that govern regular federal prosecutors. The bill we are introducing today retains these suggested reforms. In fact, it is virtually identical to the Independent Counsel Reform Act of 1999, with a single exception I will describe in a moment.

We made those substantial changes after the Committee on Governmental Affairs had held five hearings on the Independent Counsel statute. During the hearings we heard from numerous witnesses who had served as Independent Counsel, and as Attorney General, from former prosecutors and from defense attorneys. Many witnesses supported the statute, even defense attorneys who had represented targets in Independent Counsel investigations. Both witnesses who opposed the statute outright, and those who advocated keeping it in some form, suggested a number of improvements to the statute. We carefully considered those recommendations before we sat down to draft a bill that retained the essential features of the old law while reducing its scope, limiting the powers of the Independent Counsel, and bringing greater transparency into the process.

For example, the threshold for seeking the appointment of an Independent Counsel will be raised, so that a greater amount of evidence to back up allegations of criminal conduct will be required. The attorney General will also be entitled for the first time to issue subpoenas for evidence and convene grand juries during the preliminary investigation, and would be given more time to conduct preliminary investigations. This change responds to concerns that, in the past, the Attorney General's hands have been tied during the preliminary investigation stage. With our bill, the Department of Justice will be able to conduct a more substantial preliminary investigation.

In another change that will reduce the number of Independent Counsel appointed, officials covered by the statute will be limited to the President, the Vice President, the President's Chief of Staff, and Cabinet members. This is a major reduction compared to the number of officials covered by the Independent Counsel statute when it expired. The Attorney General will retain the discretionary authority to appoint an Independent Counsel to investigate non-covered individuals when the Attorney General determines that investigation or prosecution by the Department of Justice would result in a personal, financial or political conflict of interest. This discretionary authority was part of the Independent Counsel law from 1983 to 1999; although the provision was not included in the bill we introduced that year, it has been included in this bill because of the promulgation, after our bill was introduced, of new regulations by the Department of Justice.

In many administrations, high level political advisers can have enormous influence, much more even than some Cabinet members. When we first introduced the Independent Counsel Reform Act of 1999, I hoped that criminal allegations against officials not covered by the statute could be handled either by the Department of Justice, or, in cases involving high-level officials or other conflicts of interest, through the appointment by the Attorney General of a Special Counsel. After our bill was introduced, however, then Attorney General Reno issued revised regulations for the appointment of Special Counsel, which provide that the Attorney General may block any investigative or prosecutorial action being pursued by the Special Counsel. The regulations also allow the Attorney General to shut down the investigation entirely, or starve it of funds. These revisions, and others, constituted a major reduction in a Special Counsel's autonomy. As Robert Fiske had testified during our committee hearings in 1999, he accepted his 1994 appointment to be the Whitewater Special Counsel only after satisfying himself that the regulations then in effect granted him the same powers as would have been available to an Independent Counsel. Now, with the variety of control mechanisms in place under the Department's 1999 regulations, it is far too easy for an Attorney General to stifle an investigation in ways less dramatic and less public than actually removing the Special Counsel.

Under the legislation we are introducing today, each Independent Counsel will have to devote his full time to the position for the duration of his tenure. This will prevent the appearance of conflicts that may arise when an Independent Counsel continues with his private legal practice, and it will expedite investigations as well. The Independent Counsel will also be expected to conform his conduct to the written guidelines and established policies of the Department of Justice. The prior version of that requirement contained a loophole, which has been eliminated.

There have been many complaints about runaway prosecutors, who continued their investigations longer than was necessary or appropriate. Our bill will impose a time limit of two years on investigations by Independent Counsel. The Special Division of the Court of Appeals will be able to grant extensions of time, however, for good cause and to compensate for dilatory tactics by opposing counsel. Imposing a time limit with flexibility allows Independent Counsel the time they genuinely need to complete their investigations, and deters defense counsel from using the time limit strategically to escape justice. But the time limit will also encourage future Independent Counsel to bring their investigations to an expeditious conclusion, and not chase down every imaginable lead.

Our bill makes another important change that will prevent expansion of investigations into unrelated areas. Until now the statute has allowed the Attorney General to request an expansion of an Independent Counsel's prosecutorial jurisdiction into unrelated areas. This happened several times with Judge Starr's investigation, and I believe those expansions contributed to a perception that the prosecutor was pursuing the person and not the crime. An Independent Counsel must not exist to pursue every possible lead against his target until he finds some taint of criminality. His function, our bill makes clear, is to investigate that subject matter given him in his original grant of prosecutorial jurisdiction.

We are bringing greater budgetary transparency to the process by directing the Independent Counsel to produce an estimated budget for each year, and by allowing the General Accounting Office to comment on that budget. This greater transparency will provide more incentive for Counsel to budget responsibly.

Another correction we are making is to eliminate entirely the requirement that an Independent Counsel refer evidence of impeachable offenses to the House of Representatives. The impeachment power is one of Congress's essential Constitutional functions, and

no part of that role should be delegated by statute to a prosecutor.

Our bill was unsuccessful in the 106th Congress. Perhaps one of the reasons was that we were still too close to one or two controversial investigations that turned some against the statute; perhaps the wounds were still too raw. Now with a fresh perspective gained through the passage of time, Congress should reconsider what it has given up by allowing the Independent Counsel law to lapse for the past four years. Hopefully, occasions will be few and far between when serious and credible criminal allegations emerge against high-level officials. When this happens, however, the public will question how we can be certain that the incident is being appropriately investigated. Indeed, in the absence of an Independent Counsel law, some may even question whether allegations are as likely to surface in the first place. If people with knowledge of criminal wrongdoing suspect that their information may be covered up rather than acted upon, they would be less likely to take the risk of coming forward.

The controversy that has enveloped the White House in the past week illustrates the need for an Independent Counsel law. According to news reports, two high-level Administration figures, which some reports have placed in the White House, willfully disclosed the name of a covert CIA operative. If true, this disclosure would be a serious criminal law violation, one that may well have endangered not just the covert operative, but the people abroad who worked with her in service to the United States. The disclosures were reportedly made to punish the agent's husband, Ambassador Joseph Wilson, for questioning the accuracy of comments made by the President about Iraq's nuclear weapons program. The Department of Justice recently initiated an investigation, but according to a recent poll the public overwhelmingly prefers that the investigation not be handled by the Department. Although we do not yet know which individuals may be implicated as a result of a thorough investigation, many Americans question whether Attorney General Ashcroft can preside impartially over a probe that could prove very damaging to his close associates in the White House, and to the President. An Independent Counsel statute is absolutely essential so that we have an institutionalized means for addressing allegations such as these. We should not, as we are now, forced into an ad hoc and situationally driven discussion of whether the Department of Justice can investigate a particular case.

I have always believed that the Independent Counsel statute embodies certain principles fundamental to our democracy. The alternative to an Independent Counsel statute is a system in which the Attorney General must decide how to handle substantive allegations against colleagues in the Cabinet, or against the President. Often the President and the Attorney General are long-time friends and political allies. The Attorney General will not be trusted by some to ensure that an unbiased investigation will be conducted. In other cases, many will question the thoroughness of an investigation directed from inside the Department. In a time of great public cynicism about government, the Independent Counsel statute guarantees that even the President and his highest officials will have to answer for their criminal malfeasance. In that sense, this statute upholds the rule of law and will help stem the distrust toward government. The Independent Counsel statute embodies the bedrock American principle that no person is above the law.

I ask unanimous consent that the text of the Independent Counsel Reform Act of 2003 be printed in the Record.

Mr. President, I rise today to introduce the Community Economic Development Expertise Enhancement Act of 2003.

This regulation would provide funding for nonprofit, community-based economic development organizations and for the establishment of partnerships between these organizations. Most importantly, the legislation would authorize grants to promote the use of mentors to improve the operational capabilities of community-based organizations in the areas of project development, personnel management, legal services, and financial management. These and other eligible uses of the funding would increase the capacity of these organizations to expand community development activities throughout the country.

Over the past several decades, our Nation has seen the emergence of community-based organizations that have helped break the cycle of poverty for millions of families. Today, according to the National Congress of Community Economic Development, there are more than 3,600 of these organizations, many of which serve some of our Nation's most economically challenged communities. These include both urban and rural areas, as well as suburban regions.

Typically, community development corporations have annual budgets ranging from $200,000 to $500,000 and staffs averaging about six members. Their lack of personnel, expertise and financing often creates real constraints on their ability to make even greater contributions to their community.

This legislation would expand our investment in these organizations, and expand their capacity to build homes, create jobs, improve public safety, provide critical social services, increase access to capital, and turn around communities now filled with despair. The bill would serve a wide range of communities with different economic, geographic, and social characteristics.

I hope my colleagues will support the bill, and I ask unanimous consent that the text of the legislation be printed in the Record.

Mr. President, today I am introducing legislation, the FHA Multifamily Housing Loan Limit Adjustment Act of 2003, that will improve access to affordable housing for families living in high cost areas where there is a shortage of such housing. This bill was introduced earlier this year by Congressmen Gary Miller (R-CA) and Barney Frank (D-MA) and was recently approved by the House Financial Services Committee.

The Multifamily Housing Loan Limit Adjustment Act of 2003 is supported by housing and community advocates and has also been endorsed by the National Association of Home Builders, the National Association of Realtors, the Mortgage Bankers Association, the Manufactured Housing Institute, and the National Affordable Housing Management Association.

The Federal Housing Administration's Multifamily Housing programs are among HUD's most successful. The Federal Government has tried a number of different approaches to providing housing over the last 50 years. The most successful of these rely heavily on a public/private partnership that encourages the private sector to produce housing with support from the Federal Government. The FHA mortgage insurance programs have been extremely successful in producing new and rehabilitated housing with little or no cost to the Federal Government.

As you know, rising construction costs have resulted in a shortage of moderately priced affordable rental units. Rent increases now exceed inflation in all regions of the country, and new affordable rental units have become increasingly harder to find. Because of the current dollar limits on loans, FHA insurance cannot be used to help finance construction in high-cost urban areas such as the New York/New Jersey metropolitan area, Philadelphia and San Francisco.

HUD statistics demonstrate this--in 2002 and 2003, no multifamily loans have been FHA insured in New York City, Philadelphia, Los Angeles, Seattle, Massachusetts, or New Jersey.

Increasing the limits on loans for rental housing would create more incentives for public/private investment in communities through America and spur the new production of cooperative housing projects, rental housing for the elderly and new construction or substantial rehabilitation of apartments by for- and non-profit entities.

The National Association of Home Builders estimates that increasing the limits in high cost areas will allow for an additional 6,000 units of rental housing to be built each year in the cities limited by the current law. These 6,000 units will generate $318 million in new income to the residents and businesses in these cities, $38 million in added revenues to the local governments, and 6,720 new jobs. Over a ten year period, the cumulative effects of the additional building will contribute $9 billion in new income to the cities where the limits currently constrain new rental production.

While Congress approved legislation I introduced in 2001 to increase the statutory limits for FHA-insured multifamily project loans to account for inflation, we failed to act on a key provision in my bill to raise the loan limits for high cost areas. I am reintroducing that portion of my bill gain, with the hope that two years later, we can finally achieve the increases we need to make the FHA multifamily programs succeed in all our communities, particularly in those high costs areas that so desperately need additional affordable rental housing.

There is currently no HUD program designed to provide rental housing for working families from 60 percent to 100 percent of median income who are unable to find decent, affordable housing near where they work. Yet, the most recent Census data reveals that these working families, including vital municipal workers like teachers and police officers, are increasingly vulnerable and the lack of decent, affordable housing is increasingly being seen as a significant impediment to local economic growth. This is one reason why the FHA multifamily programs are so important.

Without this much-needed adjustment to the FHA multifamily loan limits, access to affordable housing for our working-citizens will continue to lag, thousands of more families will join the 14 million people who currently face severe housing needs and our nation's economy will suffer.

I hope my Senate colleagues will support the legislation and help ensure that America's working families have access to affordable housing.

I ask unanimous consent that the text of the legislation be printed in the Record.

Mr. President, I am pleased to join Senator Hatch, Senator Brownback, and Senator Specter in introducing legislation to advance the use of umbilical cord blood for clinical applications and research. I first became aware of the potential therapeutic benefits of cord blood when my daughter was born 2 years ago. At that time, our doctor informed me and my wife that preserving a small amount of blood from the umbilical cord could prove enormously beneficial later in her life. Should she become ill with a disease requiring bone marrow reconstitution, he told us, her own cord blood stem cells could be used. This would eliminate the need to find a suitable bone marrow donor.

The bill that we are introducing today will begin a new national commitment to the development of this technology--which has the potential to reduce pain and suffering and save the lives of so many Americans afflicted with some of the most debilitating illnesses. Cord blood has already been used successfully in treating a number of diseases, including sickle cell anemia and certain childhood cancers. However, the use of cord blood is still fledgling. Recent developments have suggested that the stem cells derived from cord blood may be useful in treating a much wider range of diseases, such as Parkinson's disease, diabetes, and heart disease.

Like many Americans, I had never heard of cord blood before the birth of my daughter. It is not widely used--at least in this country. In the first 8 months of this year, 95 percent of all bone marrow reconstitutions were done using a bone marrow transplant. Only 5 percent used cord blood. This figure is surprising when we consider the potential benefits of cord blood relative to bone marrow.

First, it can be very difficult to find a suitable bone marrow donor. According to a General Accounting Office, GAO, report, of the 15,231 individuals needing bone marrow transplants between 1997 and 2000 who conducted a preliminary search of the National Bone Marrow Donor Registry, NBMDR, only 4,056 received a transplant--a 27-percent success rate. This number is even lower for minorities. Cord blood would not only produce an additional source of donation, it also does not require as exact a match as bone marrow.

In addition, cord blood is readily available. While it can take months between finding a bone marrow match and actually receiving a transplant, a unit of cord blood can be utilized in a matter of days or weeks. Cord blood also lowers the risk of complications of both the donor and the recipient. The need to extract bone marrow from the donor is eliminated, and the risk of infection or rejection by the recipient is significantly reduced. Finally, research has suggested that cord blood might produce better outcomes than bone marrow in children.

Why then, given all of these benefits, has the use of cord blood not become

much more prevalent in the United States? In Japan, where the use of cord blood in clinical settings is more advanced, nearly half of all transplants now use cord blood rather than bone marrow.

The relatively infrequent use of cord blood in our country is at least partly attributable to the lack of a national infrastructure for the matching and distribution of cord blood units. There are a handful of cord blood banks around the country doing excellent work, but there is a much more developed infrastructure for bone marrow. This is thanks to legislation passed by Congress in 1986 that established a National Registry for bone marrow. By the way, that legislation is due to be reauthorized next year--and I would like to voice my strong support for that reauthorization.

Our bill would create a similar infrastructure for cord blood. Specifically, it would direct the Secretary of Health and Human Services, HHS, acting through the Administrator of the Health Resources and Services Administration, HRSA, to establish a National Cord Blood Stem Cell Bank Network, as well as a registry of available cord blood units. The network and registry would be required to collect a minimum of 150,000 units, which should be sufficient to provide a suitable match for 90 percent of the U.S. population.

Donor banks would also be required to educate the general public about the potential benefits of cord blood, and encourage an ethnically diverse population of cord blood donors. Given the untapped potential of cord blood, at least 10 percent of the available units must also be made available for research. Finally, the legislation authorizes an appropriation of $15 million for fiscal year 2004, and such sums as may be necessary for fiscal years 2005 through 2008.

Mr. President, before finishing today I would like to make it clear that I strongly support the continuation of the excellent work done by the National Marrow Donor Program (NMDP). Cord blood should act as a complement to--not a replacement for--bone marrow. In many cases, a bone marrow transplant is still the preferred therapy. Physicians should have the ability to decide on a case-by-case basis which is best for their patients. That is why I am hopeful that the NMDP will have a very active role in designing and supporting the National Cord Blood Stem Cell Network and Registry. Ideally, the two will work together to provide a single resource where doctors can search both cord blood stockpiles and a list of marrow donors for a suitable match for their patients.

I firmly believe that the creation of a national infrastructure for cord blood will, in time, save the lives of thousands of gravely ill Americans. We have a responsibility to encourage use of cord blood where appropriate today, and invest in research to fully tap the potential of this technology. I urge my colleagues to support this legislation.

Mr. President, today I am introducing legislation, the FHA Multifamily Housing Loan Limit Adjustment Act of 2003, that will improve access to affordable housing for families living in high cost areas where there is a shortage of such housing. This bill was introduced earlier this year by Congressmen Gary Miller (R-CA) and Barney Frank (D-MA) and was recently approved by the House Financial Services Committee.

The Multifamily Housing Loan Limit Adjustment Act of 2003 is supported by housing and community advocates and has also been endorsed by the National Association of Home Builders, the National Association of Realtors, the Mortgage Bankers Association, the Manufactured Housing Institute, and the National Affordable Housing Management Association.

The Federal Housing Administration's Multifamily Housing programs are among HUD's most successful. The Federal Government has tried a number of different approaches to providing housing over the last 50 years. The most successful of these rely heavily on a public/private partnership that encourages the private sector to produce housing with support from the Federal Government. The FHA mortgage insurance programs have been extremely successful in producing new and rehabilitated housing with little or no cost to the Federal Government.

As you know, rising construction costs have resulted in a shortage of moderately priced affordable rental units. Rent increases now exceed inflation in all regions of the country, and new affordable rental units have become increasingly harder to find. Because of the current dollar limits on loans, FHA insurance cannot be used to help finance construction in high-cost urban areas such as the New York/New Jersey metropolitan area, Philadelphia and San Francisco.

HUD statistics demonstrate this--in 2002 and 2003, no multifamily loans have been FHA insured in New York City, Philadelphia, Los Angeles, Seattle, Massachusetts, or New Jersey.

Increasing the limits on loans for rental housing would create more incentives for public/private investment in communities through America and spur the new production of cooperative housing projects, rental housing for the elderly and new construction or substantial rehabilitation of apartments by for- and non-profit entities.

The National Association of Home Builders estimates that increasing the limits in high cost areas will allow for an additional 6,000 units of rental housing to be built each year in the cities limited by the current law. These 6,000 units will generate $318 million in new income to the residents and businesses in these cities, $38 million in added revenues to the local governments, and 6,720 new jobs. Over a ten year period, the cumulative effects of the additional building will contribute $9 billion in new income to the cities where the limits currently constrain new rental production.

While Congress approved legislation I introduced in 2001 to increase the statutory limits for FHA-insured multifamily project loans to account for inflation, we failed to act on a key provision in my bill to raise the loan limits for high cost areas. I am reintroducing that portion of my bill gain, with the hope that two years later, we can finally achieve the increases we need to make the FHA multifamily programs succeed in all our communities, particularly in those high costs areas that so desperately need additional affordable rental housing.

There is currently no HUD program designed to provide rental housing for working families from 60 percent to 100 percent of median income who are unable to find decent, affordable housing near where they work. Yet, the most recent Census data reveals that these working families, including vital municipal workers like teachers and police officers, are increasingly vulnerable and the lack of decent, affordable housing is increasingly being seen as a significant impediment to local economic growth. This is one reason why the FHA multifamily programs are so important.

Without this much-needed adjustment to the FHA multifamily loan limits, access to affordable housing for our working-citizens will continue to lag, thousands of more families will join the 14 million people who currently face severe housing needs and our nation's economy will suffer.

I hope my Senate colleagues will support the legislation and help ensure that America's working families have access to affordable housing.

I ask unanimous consent that the text of the legislation be printed in the Record.