Protect America Short-term Extension Act

Mr. President, I understand I have up to a half hour to speak at this time.

I thank the Chair.

Mr. President, yesterday I spoke about the work we have done, and the challenges we still face, with regard to energy policy. I return to the floor today to complete my remarks.

I concluded yesterday by putting a pricetag on our dependence on imported oil. Experts estimate that foreign oil will cost us $400 billion just this year. This expense will impact our economy in a number of ways, including our trade balance. In December 2007, imported crude oil accounted for 61 percent of the national trade deficit, or an all-time high of $36 billion. The trade deficit, propelled by high oil prices, has factored into the decline of the dollar.

Yesterday, Fed Chairman Ben Bernanke testified that the cost of energy is being passed through and reflected in the increase in prices of core consumer goods and services. Other experts believe that increasing energy prices and lower economic growth could lead to a return of ``stagflation.''

Our dependence on foreign oil also has a negative impact on job creation in America. The National Defense

Council Foundation concluded that imported oil deprives the U.S. economy of more than 2.2 million jobs per year. Choosing to import oil to meet our energy needs exports more than our money--it also exports jobs. Choosing to produce energy here at home would keep those jobs within our borders, and help countless Americans earn a good living.

The National Defense Council Foundation also identified several more ``hidden costs'' of oil imports, including oil-related defense expenditures, lost economic activity, reduced domestic investment, lost Government revenues, and the cost of periodic supply disruptions. Together, these total $825 billion per year, nearly four times the amount that America spent directly on acquisition of foreign oil in 2005.

The money we export for oil flows directly into the economies of foreign nations around the world. Oil-producing nations spend these revenues on national defense, education, health care, social programs, infrastructure, financial instruments, and to bolster their own energy security. As these nations use American dollars to pay for investments in their own futures, we are forced to spend money we do not have, and forgo our own priorities.

The fact that many of the major oil-exporting nations are undemocratic only makes matters worse. We import much of our oil from Canada and Mexico. Unfortunately, beyond North America, most of our oil comes from countries such as Saudi Arabia, Venezuela, Nigeria, Iraq, and Algeria. Worldwide, the top oil exporting nations also include Russia and Iran.

Many regimes in oil-rich nations are unstable and unfriendly. Anti- Americanism is prevalent throughout the Middle East. The same Saudi lands that are used to produce 10 million barrels of oil per day also provide a staging ground for the advancement of radical Islam. While the State Department has listed Iran as a sponsor of terrorism since 1984, oil revenues allow that regime to weather heightened sanctions.

Our reliance on foreign oil continues at our own peril. We pay huge sums for oil, but even this premium cannot guarantee the availability of supplies. A recent study identified 24 significant oil supply disruptions between 1950 and 2003. These lasted an average of 6 months, and reduced the world's supply of oil by up to 12 percent. Recent events around the world reveal that our supply of oil is still incredibly vulnerable to disruption.

In Nigeria, conflict over oil wealth reduced that nation's daily output by 25 percent last year. Dozens of workers have been kidnapped there, nearly leading Shell to suspend all of its operations in the Niger Delta region. In Iraq, more than 460 attacks on oil pipelines, facilities, and personnel have occurred in the past 4 years.

Not all supply disruptions will be caused by natural events or manmade strife, because much of the world's oil is controlled by irrational, often unpredictable leaders. Venezuelan President Hugo Chavez recently threatened to stop sending his country's oil to America because of a British court ruling. The simple truth is this: in a world without spare production capacity, every major production loss, no matter where it occurs, can boost oil prices--and even short-term increases heighten the long-term costs to our Nation.

Many foreign leaders are using oil as a diplomatic weapon, and establishing diplomatic ties with growing energy consumers. Such relationships legitimize the regimes in power and allow them to secure regional influence. We have seen the Putin regime use its vast resources as leverage throughout Eastern Europe. But perhaps the best example of this type of petro-influence can be seen in Venezuela. The Chavez regime peddled influence by distributing nearly $5 million in financial assistance per day last year to nations throughout Latin America. Venezuela also used revenue from its oil sales to subsidize bus tickets for Londoners and home heating oil for Americans.

Nearly all of us, and nearly all of our constituents, can agree that America's dependence on foreign oil must end. Before I discuss some solutions to the problems I have outlined, I will provide historical context for them.

Attempting to bolster America's energy security is not new to Washington. In 1973, my first year in Congress, President Nixon gave a major address on energy. He proposed a very aggressive initiative, called `Project Independence', stating:

Let us set as our national goal, in the spirit of Apollo

with the determination of the Manhattan Project, that by the

end of this decade we will have developed the potential to

meet our own energy needs without depending on any foreign

energy sources.

At the time of that speech, net imports accounted for approximately 28 percent of U.S. crude oil demand. Thirty-five years later, imports account for more than 60 percent. Imports have grown because the gap between domestic supply and demand has been allowed to widen-- consumption has steadily increased over the years, while production dwindled.

In 2005, the United States consumed 21 million barrels of crude oil per day, but that same year, domestic production hit a 50-year low. The result established a record for oil imports--13.7 million barrels per day--but not a ceiling on them. According to the EIA, oil usage will rise 30 percent by 2030, even as alternative sources of energy account for a much greater percentage of our energy supply.

These estimates show that, while our goals have been admirable and ambitious, we are heading in the wrong direction. As consumption rises, and domestic production falls, oil imports continue to increase and our hand is weakened diplomatically, militarily, and economically. As we debate catch phrases like ``energy independence,'' ``energy security,'' and ``energy freedom''--we miss the point. And that is, we must immediately adopt policies to reverse the course we have been on since before 1973, and the course that our best experts estimate will continue beyond 2030.

Part of the problem is created by the talking points originating in Washington. Although the goal of ``Project Independence'' was never met, the same rhetoric is still used to define the challenges we face. Invoking the Apollo missions and the Manhattan Project ignores the hard truth that an effective long-term energy policy will not be a race to the finish line. As President Nixon asserted, we will need the spirit and determination of past endeavors. We will need our brightest minds and best science. But this time, we do not seek a one-time goal--to land the first man on the Moon, or to develop the first atom bomb. Instead, we seek a fundamental shift in how our Nation powers its economy. The widening delta between domestic production and consumption will continue to swell unless we change course.

Throughout this debate, we must be straight about these challenges. We must be honest with the American people and honest with ourselves. Given our growing energy needs, and our reliance on foreign oil, we should not promise energy independence within a term of office. In the absence of scientific breakthroughs, the strengthening of our energy security that we seek will take substantial time and effort to achieve. But we can begin to move in that direction today.

There are no easy solutions or quick fixes to our energy challenges. As we debate these issues, we should not propose to overhaul the traditional energy industries without also addressing the likely impacts that such actions will have. And we should not seek to transition away from traditional sources of energy until new technologies are affordable, available, and acceptable to the public.

Those of us in Congress share a common goal--to reduce our dependence on foreign oil--but there are deep divisions over how to achieve it. As a result, the Congressional Record is filled with legislation that undermines our ability to move toward this goal. These measures were drafted with good intentions. However, good intentions are not enough, especially when they are not matched with the wisdom and experience necessary to achieve these goals we seek. This Congress is in danger of failing in this regard.

Last year, Congress passed an omnibus appropriations bill in the place of several individual bills. As time dwindled, attention was diverted away from damaging provisions that were inserted in that bill and passed with little notice and no debate. Among these provisions was a moratorium on oil shale regulations, which could delay the commercialization of one of America's

most promising resources. Our Nation holds 62 percent of the world's oil shale deposits. This equals nearly five times the proven conventional oil reserves of Saudi Arabia. Just imagine the possibilities if we unleash American ingenuity to access these resources.

Another provision in that bill imposed new fees for domestic oil and gas permits, which will increase the cost of business and ultimately heighten the cost of energy for American consumers. As we have seen our domestic production level off over the past several years, it is irresponsible to adopt policies that accelerate this trend. Yesterday, the House Democrats chose the unwise path of raising taxes on our domestic energy producers by $18 billion. Additionally, some in the majority seek to make it more difficult for our military to purchase unconventional fuels from our allies in Canada. On top of that, some in the majority still seek to undo lease agreements that American companies have to produce energy in the Gulf of Mexico. This makes no sense.

These backward policies prevent us from building on the success of recent energy bills. Legislative efforts to open a small section of the Arctic Coastal Plain have now been thwarted for over 25 years. Much of our Outer Continental Shelf also remains closed for energy leasing. Combined, these areas contain more than 100 billion barrels of oil and 450 trillion cubic feet of natural gas.

Using old fears about energy production, and ignoring new concerns about energy prices, policymakers are locking up our energy potential. It is clear that this approach has failed, and that we need to find a new way to reach smart consensus on energy policy.

For too long, the debate on energy has been dominated by extreme ideologies. Discourse has deviated into an ``either/or'' approach, where participants are accused of being beholden to either ``big oil'' or ``environmental extremism.'' In an almost equally divided Senate, and at a time when party control is split between the legislative and executive branches, there is no better time to bridge this divide.

We must take action on an aggressive agenda of both new and old energy ideas. Some of these proposals have been labeled as Republican ideas, and others have been labeled as Democratic ideas. We must recognize that reasonable policies to reduce our dependence on foreign oil are American ideas, not partisan agendas. We must affirm that these policies are worth pursuing, because additional steps can and should be taken to reduce the amount of energy this nation imports.

A strong energy policy will rely upon three types of initiatives: those that increase the responsible production of domestic energy; those that accelerate the research, development, and deployment of renewable and alternative sources of energy; and those that significantly enhance our Nation's ability to conserve energy. There is broad agreement that two of these three areas are critical to America's energy security. I see them outlined in the measures introduced in Congress, and they are built upon in the energy proposals of those running for President.

In modern politics, most people would be satisfied with two out of three. But when we miss a critical piece of the puzzle--the one that matters most in the near-term, and would have the greatest immediate impact--then we can safely say, as I do now, that our efforts will fall short of the goal.

I speak, of course, of the continuing disagreements over domestic production. We must, without delay, produce more energy at home. American energy, produced by our workers, must be used to power our homes, businesses, and vehicles.

Increasing domestic production will not be a stand-alone solution. But with proven reserves of more than 21 billion barrels of oil, and undiscovered reserves of more than 100 billion barrels, it is simply unacceptable that America fail to meet a greater share of our own needs with domestic energy resources.

The good news is that we have the resources, the technology, and the support of most Americans. The bad news is that so far we have been unable to muster the political will--we cannot even build consensus to inventory these areas and gain an accurate assessment of our Nation's energy reserves. To have a fair and informed debate, we must know the extent of our resources. And then we must tap them with the ingenuity, skill, and technology at our disposal.

We must listen to the people of Alaska and open the Arctic Coastal Plain to responsible leasing for the exploration and production of oil and natural gas. ANWR is an emotional subject for many folks, so let's stick to the facts. First, to the critics who say that oil from ANWR will take 10 years to come on-line--you are probably right. But to use this as an argument against development is like refusing to save for your retirement because you are not retiring next year. It will take time and patience to develop the resources of Alaska's North Slope. From experience, we know that starting this process a decade ago would have ensured greater domestic oil production when we needed it most.

In 1995, Congress did pass legislation to open a small portion of the Coastal Plain to oil and gas leasing. But President Clinton vetoed the legislation, and more than a decade later, an estimated 10.4 billion barrels of oil continue to sit under our own soil. The week of that veto, the average price of crude oil was $19 per barrel. This week, the price has risen to about $102 per barrel. I would say that conditions have changed enough to warrant a fresh debate on this topic.

Congress must also open more of the Outer Continental Shelf, as we did in the Gulf of Mexico in 2006. Last year, an amendment that would have allowed leasing off the coast of Virginia was defeated on a near party-line vote. That vote was a step in the wrong direction. Offshore America holds tremendous energy potential, and it is essential that the American energy industry have greater access to explore and produce in this area.

Continuing to restrict the OCS will sacrifice billions of dollars that could be used to develop our Nation's future energy supplies. Opening it would augment our supply of traditional fuels--and dollars that now go overseas to acquire oil could remain within our own economy and could be used to develop alternative sources of energy. The conventional fuels of the 20th century can be used to pioneer those of the 21st century, but we must first find the courage to put ourselves on such a forward-looking and pragmatic path.

Equally important to increased domestic production will be measures to expedite the on-shore permitting process. A good example of why is Alaska's natural gas pipeline. Permitting and activities related to permitting that project may add more than 5 years to its timeline. This is just one example, but it is representative of an increasingly burdensome process. Permitting must be streamlined, not only to prevent energy producers from investing abroad, but also for the sake of growing our energy production.

As I have indicated, our Nation has a great quantity of oil locked up off of our coasts, beneath our permafrost, and within our shale. These areas can provide a stable supply of energy as we transition to alternative fuels. But oil is not the only resource that can be developed at home and depended upon to meet our energy needs. We are also fortunate to have vast reserves of coal: some 270 billion recoverable tons, which would last for 240 years at the current rate of consumption. That coal can be turned into fuels that help meet our transportation, manufacturing, and electric power needs.

Because of the emissions that result when coal is converted to energy, we will need cleaner methods to ensure the protection of our environment. To me, this is an opportunity. Our Nation has a proud heritage of innovation, and there is no reason to believe this strong record will not continue in the future. As our most abundant and affordable fossil resource, we cannot simply cross coal off the list. Any serious effort to strengthen our energy security must include coal.

One of our best prospects is to advance the development of coal-to- liquid fuels. As an alternative to oil, coal-to-liquid fuels have many merits: it will reduce emissions of sulfur dioxide, nitrous oxide, particulate matter, and other pollutants when compared to conventional fuels. Coal-to-liquid fuels have been commercially demonstrated in other countries, can be moved through existing pipelines, and can be

used in existing vehicles. Commercialization of this resource will create investment in rural communities, thousands of good-paying jobs, and cheaper energy for American consumers. Despite this potential, two amendments to advance this type of fuel were defeated on party-line votes in the most recent energy debate.

Future generations of automobiles will be powered by the advanced battery. The Government must redouble its efforts to ensure the research, development, and deployment of these technologies. Reliable and rechargeable batteries will be critical to the success of hybrid vehicles, which hold tremendous promise for reducing the amount of oil consumed in the transportation sector.

The policies I speak of are just a few of the options available to us. We should also increase the number of flex-fuel vehicles on the road, and the number of stations that offer blended fuels. We should offer incentives to existing refineries, and encourage the expedited construction of new ones, to reduce the amount of gasoline we import. We continue to lament that while our refinery capacity has improved at existing sites, we have not built a new refinery in 30 years. We must rethink our policies to match the modern challenge we face. Again, these are just a sampling of the policy options available to the Congress as we seek to chart a more responsible path forward.

As a member of the Senate Energy Committee for nearly 30 years, and its chair or ranking member for much of the past decade, I obviously have strong views on the energy policies that will best serve our Nation. But I also recognize that we must work together to find common ground. We did this in the past on energy policy, and we can do it again.

The costs of our dependence on foreign oil are enormous and increasing. The consequences of removing money from our economy, and sending it to often-volatile oil-producing nations, are becoming clear. Few positives will ever be drawn from this arrangement.

When we import oil, we export our jobs and we export our wealth. We strengthen regimes that are intent on undermining our interests, opposed to the spread of democracy, and unwilling to extend some of the most basic freedoms to their own people. When we import oil, we threaten our national security and our economic strength. As we look ahead, we must remember that for today and the foreseeable future, we need oil. We should put our American energy resources to use.

This is my final year in the U.S. Senate. It is a privilege and an honor to serve the people of New Mexico and this country. But it is not just the end of my time in the Senate that approaches; the time to reduce our growing dependence on foreign oil is also upon us.

It is my sincere hope that we will use this year and the future to work together on policies that will move us toward our energy security goals. This will require us to set aside our differences and make difficult decisions. It will require us to come to the table with open minds and positive intentions. In an era defined by its bitter partisanship, this will not be easy. But given the stakes--our national security, our economic strength, and our standing in the world--that is exactly what we must do.

Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Madam President, I have spoken twice on energy, once today and once yesterday.

I have come to add a few more thoughts to my previous remarks on energy. I spoke yesterday of the recent Energy bills that Congress has passed, and the growing costs of our dependence on foreign oil. This morning, I urged my colleagues to reach agreement on a comprehensive energy policy that uses our own resources to meet our energy needs.

Of all the issues we have to consider in this Congress, some may wonder why I have focused on energy three times in the past 2 days. The answer is simple: it is February 29. Oil is going for nearly $102 per barrel, and gas prices are up 20 cents in the past 2 weeks alone. The start of the summer driving season is still 3 months away, but consumers are already being squeezed by near-record energy prices. More than that, this should be a story we talk about in both good and bad times, because our dependence is growing great and it is not matched by our policy.

We must rethink our policies to match the modern challenges we face. As I have indicated, our Nation has a great quantity of oil locked up off of our coasts, beneath our permafrost, and within our shale. These areas can provide a stable supply of energy as we transition to alternative fuels. But oil is not the only resource that can be developed at home and depended upon to meet our energy needs. We are also fortunate to have vast reserves of coal: some 270 billion recoverable tons, which would last for 240 years at the current rate of consumption. That coal can be turned into fuels that help meet our transportation, manufacturing, and electric power needs.

Because of the emissions that result when coal is converted to energy, we will need cleaner methods to ensure the protection of our environment. To me, this is an opportunity. Our Nation has a proud heritage of innovation, and there is no reason to believe this strong record will not continue in the future. As our most abundant and affordable fossil resource, we cannot simply cross coal off the list. Any serious effort to strengthen our energy security must include coal.

One of our best prospects is to advance the development of coal-to- liquid fuels. As an alternative to oil, coal-to-liquid fuels have many merits: it will reduce emissions of sulfur dioxide, nitrous oxide, particulate matter, and other pollutants when compared to conventional fuels. Coal-to-liquid fuels have been commercially demonstrated in other countries, can be moved through existing pipelines, and can be used in existing vehicles. Commercialization of this resource will create investment in rural communities, thousands of good-paying jobs, and cheaper energy for American consumers. Despite this potential, two amendments to advance this type of fuel were defeated on party-line votes in the most recent energy debate.

Future generations of automobiles will be powered by the advanced battery. The Government must redouble its efforts to ensure the research, development, and deployment of these technologies. Reliable and rechargeable batteries will be critical to the success of hybrid vehicles, which hold tremendous promise for reducing the amount of oil consumed in the transportation sector.

The policies I have spoken of these past 2 days are just a few of the options available to us. We should also increase the number of flex- fuel vehicles on the road, and the number of stations that offer blended fuels. We should offer incentives to existing refineries, and encourage the expedited construction of new ones, to reduce the amount of gasoline we import. We continue to lament that while our refinery capacity has improved at existing sites, we have not built a new refinery in 30 years. Again, these are just a sampling of the policy options available to the Congress as we seek to chart a more responsible path forward.

As a member of the Senate Energy Committee for nearly 30 years, and its chair or ranking member for much of the past decade, I obviously have strong views on the energy policies that will best serve our Nation. But I also recognize that we must work together to find common ground. We did this in the past on energy policy, and we can do it again.

The costs of our dependence on foreign oil are enormous and increasing. The consequences of removing money from our economy, and sending it to often-volatile oil-producing nations, are becoming clear. Few positives will ever be drawn from this arrangement.

When we import oil, we export our jobs and we export our wealth. We strengthen regimes that are intent on undermining our interests, opposed to the spread of democracy, and unwilling to extend some of the most basic freedoms to their own people. When we import oil, we threaten our national security and our economic strength. As we look ahead, we must remember that for today and the foreseeable future, we need oil. We should put our American energy resources to use.

This is my final year in the Senate. It is a privilege and an honor to serve the people of New Mexico and this country. But it is not just the end of my time in the Senate that approaches; the time to reduce our growing dependence on foreign oil is also upon us.

It is my sincere hope that we will use this year and the future to work together on policies that will move us toward our energy security goals. This will require us to set aside our differences and make difficult decisions. It will require us to come to the table with open minds and positive intentions. In an era defined by its bitter partisanship, this will not be easy. But given the stakes—our national security, our economic strength, and our standing in the world—that is exactly what we must do.

Before we leave, Madam President, I say to the distinguished majority leader that I appreciate his kind, generous remarks.

Madam President, I also want to make a comment regarding something the leader said when he was discussing my speech he heard.

I want to say to the Senator, you caught the end of 2 days of speaking on energy, and you heard: coal. I want you to know I had spoken of many other sources of energy before that. But I thought in recapping what we own, you must include coal in that. That is why you heard it there, not to give it special emphasis beyond which it is entitled.

Right.

I thank the Senator.

I object.

I have to stay here until it is done.

Madam President, I thank my colleague for raising some of those issues. Our area was hardest hit in one area I visited not long ago, and just now we are seeing houses come back. It has been sad. I think that it has taken this long to move, going on 3 years, and you wonder why we couldn't make that happen earlier. A lot of money has been spent on interim housing and other things, that had it been spent in a way that goes directly to housing, to building new housing in safe areas and raised up so we wouldn't have a risk in the future, we would

have been a lot better off. I know it is hard because I have been there and I have seen how hard it is to move the process in a faster way. I hope in the future we will learn to do it better.

I thank my colleague for raising it.

Budget

Madam President, all of us realize our country faces a fiscal crisis. Unless we take action, we are going to see dramatic damage to our economy in the years to come. With the retirement of the baby boomers, our current spending levels on Social Security, Medicare, and Medicaid in particular are simply unsustainable.

Absent reform, the Social Security trust fund is expected to be exhausted by 2041, the Medicare Part A trust fund will be exhausted in 2019--only 11 years from now--and the cost of these Federal programs will actually exceed the current budget. The resulting deficits will be so large that many predict the Government will not be able to borrow its way out of the problem. So we do need to take some steps now.

Some may think these grim predictions, these projections are not accurate. Maybe things are not as bad as some are projecting. But I do not think anybody can doubt we are moving to a period of time when our ability to fund the entitlement programs, plus our general expenditures, will be beyond our capacity--really beyond our capacity. It becomes more difficult each year we delay in getting there.

Next week we will be marking up, in the Budget Committee, this year's budget. I have served on the Budget Committee for a number of years. Last year, we had a budget, and it was a bit discouraging. We have had discouraging budgets for some years, frankly.

I want to make some remarks to clarify what I think is a problem. Some would say it is partisan, but I think we might as well talk about it because, prior to the last election, our Democratic colleagues vigorously attacked the Republicans for not fixing our fiscal situation. They said: You are in the majority. There was, in truth, much merit to those criticisms. I do not think the Republican majority did a very good job, and people were not happy about it. It was a factor in the last election.

In fact, in the last election, 2006, when my Democratic colleagues were promising to do better--and they achieved a majority in both Houses of Congress--the polling data showed the Democratic Members of Congress were believed to be better able than Republicans to confront this deficit problem we were facing. So it was a factor, I think, in the last election.

I note that over the last several years substantial progress was made about the deficit. We do not need to be too negative here. The deficit fell from $413 billion in 2004 to $162 billion last year. That is more than half--well more than half--that we reduced it. I, frankly, was very hopeful that if we could continue to contain the growth in spending we would see that deficit continue to fall.

But two things have happened that, frankly, make this a difficult year. First, the Congress voted for a $170 billion stimulus package to send everybody checks and other things--$170 billion. Last year, our deficit was just $162 billion. This year we added on top of all of our spending another $170 billion.

Since we were already in deficit, where did we get the money to pay the $170 billion? Nobody disputes it: Every single dollar of the $170 billion proposed is paid for by more debt. It is borrowed. It is going to be a debt we will carry and our grandchildren will carry, frankly. And we will pay interest on it. So this year's budget is going to look bad, and it is going to be difficult because we have another $170 billion, and that is more than the deficit of all of last year.

Secondly, we still have very considerable expenses related to the war on terrorism. That hurts. But that was included in last year's deficit.

The next thing--that is troubling for us all--is the economic slowdown. We tax the American people pretty heavily--frankly, more than I like to see them taxed. We tax upper income people with even higher marginal tax rates than we tax lower income people.

When the economy is doing well--and somebody should do a better study about this, I think, than has been done to date--when the economy is doing well, upper income people tend to do very well. So their business--maybe they own 10 or 12 of this or that outlets in some city. The economy is booming. The CEO, the owner, makes $300,000 a year, and he pays that 35-percent marginal income tax rate to the Federal Government.

Now, if the economy slows down, instead of making $300,000, he makes $100,000. It looks like a lot of money, but it certainly will not benefit the U.S. Treasury nearly as much because the marginal rate on $100,000 will be lower than 35 percent. And he will only be paying on $100,000.

So I say, we have created a tax system that has tied itself to a growing economy, and we are not in a growing economy this year. It looks like the economy is going to slow down, and it is troubling. So we cannot project the same level of revenue to the U.S. Government that we had the last several years, which had been surging. It was 13 percent, 11 percent, 10 percent the last 3 years in growth. So we are facing a difficult issue.

My Democratic colleagues, during this past election, promised to cut spending and do better than those who had been in power. My very fine colleague Senator Conrad--who I think, if he had more support among his majority colleagues, would be able to do more than he is doing--said these things last year. This is the chairman of the Budget Committee:

So for those of us who are concerned about spending, sign

me up.

On ``60 Minutes'':

We need to be tough on spending.

I think most of it is going to have to be on the spending

side of the equation, given the magnitude of the baby boom

generation.

I think we should sharply inhibit the growth of spending.

Well, those were some promises that were made last year. They have also promised and made a big to-do about the tax gap.

Now, the debate over the tax gap was simply this: Well, we don't want to promote in our first budget--last year, that was the first Democratic budget--a tax increase, so what we will do is we will use the same current tax rates, and what we will do is collect more and get those people who are cheating. We had reports from the IRS that said that was not going to work. We had experienced Senators, such as Senator Grassley, former chairman of the Finance Committee, who said: That is not going to work. Senator Gregg, former chairman of the Budget Committee, and now ranking Republican on that committee, said: It is not going to work.

Oh, but they used that argument. When the budget was passed, this extra income they projected would be received into the Treasury as a result of enhanced enforcement by the IRS, that that was going to help them, allow them to spend more money and not increase the debt. OK. That was the debate we had last year when we passed a budget: a commitment they would raise more money by collecting from those who are not paying as much as they are supposed to pay. It did not happen. I will talk about that in a minute.

But I want to say this: A budget is a defining document for a political party. It is organized 51-49 with a Democratic majority here. We passed a Budget Act a number of years ago--because we could not pass budgets because of filibusters--to eliminate the filibusters during budget debates. You can pass a budget with a majority vote. So the majority party, as the Republicans could do in the past, was able to pass a budget without support from the other party. Anybody who is in a majority in the Senate ought to be able to pass a budget. It also is a document that says something about the priorities and the direction that the majority wants to see the country go: how they are going to get there. It is a very important, defining document.

Senator Gregg, last year, was very eloquent. He is such an experienced and wise Senator, who watches this carefully. He has studied these issues carefully. He predicted their budget was not going to add up last year when we passed that budget. But they insisted that it would work, as it was passed, and history now can tell us what happened. Looking back, it is clear--even in a period of good economic growth last year--the promises that were made were not kept. They told us they would cut the existing spending or reduce the

rate of increase in spending. Yet last year the majority attempted to add $23 billion to President Bush's discretionary spending request, which already reflected a $60 billion increase.

So President Bush's budget had a $60 billion increase in discretionary spending. This excludes Social Security, Medicare, and the military--or the war supplementals. It excludes those entitlement programs. He proposed $60 billion in increases. Our colleagues passed a budget in the Senate that was a $23 billion increase above that.

Contrary to cutting spending, I would suggest my colleagues did not fulfill their promises, but actually proposed a budget that increased spending 50 percent more almost--40 percent-plus more than President Bush proposed. Over a 5-year period, that budget would have hiked nondefense discretionary spending by $205 billion. But we did have somewhat of a battle last year, and as the great omnibus bill came through at the end of the year--that monstrosity--President Bush threatened a veto, and he forced a cut in spending. Republicans in the Congress backed him up on that veto threat, and that was achieved at the end.

It appeared that we had a spending program that was more akin to President Bush's $60 billion increase than to an $83 billion increase as proposed by my Democratic colleagues. But it wasn't all that good, frankly, because, as has been the case for decades, there are other options to get around the budget--gimmicks and devices. By abusing the emergency spending designation last year, the majority party was able to spend an additional $24 billion anyway, by calling it an emergency.

If we have a budget and we agree to commit to that budget and legislation is proposed that goes above that budget, it is subject to a point of order, and you have to have 60 votes at least before you can spend it. But if you can get enough votes, if you can get 60 votes, you can just declare something an emergency, and you can put the money in the emergency spending with 60 votes, and it doesn't count against the budget because you have declared it an emergency. So that is on top of the deficit budget we have.

Also, there were great promises that any new spending programs would be offset. This is the pay-go rule. How do you offset a new spending program? You can cut spending somewhere else or you can increase taxes. That is the only way to do it under pay-go. But our colleagues have often--this pay-go rule that had been so much ballyhooed here by our colleagues--they either ignored it or gimmicked the pay-go rules last year. Such gimmickry resulted in $143 billion in deficit spending.

For example, let's look at the SCHIP reauthorization. I hope my colleagues will just think about this. I take no pleasure in this. I have seen Republicans do this too. But this is really a blatant example. The bill we passed last year increased funding for SCHIP, the insurance for children, increased spending over 5 years by $35 billion. But in fiscal year 2013, that spending level was decreased by 85 percent. Now, I ask my colleagues: Why? Why would we dramatically increase funding for the SCHIP program and then in an outyear--2013-- slash it by 85 percent? The reason is they score the cost of it over 5 years. So for 4 years we would have a dramatic increase, and in the fifth year they make a dramatic 85-percent reduction. The question is, Why was that done? So it would fit within the score, the 5-year score. But what is really going to happen? Does anybody in this Senate think that in 2013 we are going to cut the children's insurance program by 85 percent? Of course not. This is a gimmick. It was a gimmick to make it fit within the budget, to appear not to be in violation of the pay-go rule when, in fact, we know we couldn't possibly reduce that program by 85 percent.

Not only does the pay-go rule fail to control spending, it will put us on an almost guaranteed path to large tax increases. Under the Democratic budget that passed last year, any existing tax cut, any existing lower tax rate that expires sometime in the future would be allowed to expire--for our colleagues, to continue those current levels of taxes, to continue them at a lower rate is considered a tax cut. So to extend the dividend cuts, extend the capital gains cuts, extend the lower rates for lower income workers, it amounts to, under their definition, a tax cut. It takes 60 votes under this pay-go rule to pass a tax cut. President Clinton said he opposes these tax cuts that President Bush passed, and I think that represents the majority view of my colleagues, so we are looking at a period of time that we could see additional increases in taxes, and to keep them at the current rate, they will score it as a tax cut. We will either pay for it under this definition by reducing spending or increasing taxes somewhere else. We are not going to reduce spending because we have already seen the majority party has proposed a budget that spends more than President Bush proposed, and he proposed an increase in spending.

It is sort of a perverse little deal. Under this pay-go rule, my colleagues assume that spending will go up each year, so that doesn't have to be offset. It goes up at a certain rate, but they say if you extend the current tax rates, that is a tax cut. It provides an incentive and an advancement of spending and a detriment to tax reductions.

Now, with regard to the tax gap, it would be pretty humorous, frankly, if it weren't so serious. Their proposals on this tax gap, this idea that they are going to raise more taxes by having the IRS increase collections, was one of the wildest political chimeras this Senate has seen in quite a number of years. As I have indicated, senior Senators such as Senator Grassley and Senator Gregg pointed out how it was not going to work, and they cited the IRS and other things that showed it, but we passed it anyway. We scored the budget on the assumption the money would come in. It was going to raise $300 billion over 5 years, just in enhanced collections. So we assumed we were going to enhance tax collections by $300 billion over the next 5 years last year when we passed this Democratic budget. But we see now, from the best estimates we have for the effort of closing the tax gap, it is not going to raise $300 billion, it will raise $200 million over 5 years, $40 million a year--hardly enough to impact the overall deficit situation we are in at all. The House has recently passed legislation that actually is going to widen the tax gap, unfortunately.

Our colleagues promised to enact middle-class tax relief, but that has not been done. There has been no action to extend the marriage penalty relief we have today, the $1,000-per-child tax credit we have, the 10-percent tax break credit--the 10-percent tax bracket for low- income workers, or any kind of estate tax reform. So we have had that talk, but we haven't passed it, and we are heading to the point where we are going to have a pay-go problem to even extend these current rates, and they are going to score that as a tax cut and demand to know where we are going to get the money from. The capital gains reduction that virtually every economist agrees results in increased revenues to the Government from capital gains taxes will expire in 2010. The 10- percent tax bracket--the low 10-percent tax bracket that didn't previously exist but was created as a result of President Bush's tax cuts would expire, and it would go back to 15 percent for lower income individuals. Setting a dividend rate at 15 percent will end; it will go back to the marginal rate for many people of over 30 percent. Does anybody think that is going to help the stock market to increase-- double--the rate for dividend taxes you have to pay? So the best scores we have are that we are heading toward a $900 billion tax increase that will impact directly--and everybody indirectly--116 million taxpayers.

What about entitlements? The majority party talked about doing something about entitlements. I think Senator Conrad truly believes we should do something about it. He has worked hard at it, but he has never gotten the support on his side of the aisle to ever make a dent in it. We have to think about entitlement spending.

At this point in time, entitlement spending--Social Security, Medicare, Medicaid--exceeds half of our budget, half of what we spend. That number is growing. Some have it up to 100 percent of the current budget level in a number of decades unless something were to change. At least President Bush consistently has offered programs to improve and contain the growth in

these programs. He talked about Social Security reform, and the door was slammed shut. My colleagues wouldn't even discuss it. He has talked about Medicare and Medicaid. Nobody would talk about that last year. It was absolutely not a part of last year's budget.

So I think this is irresponsible. If we are heading on a glidepath that takes us to trillions and trillions of dollars in debt, driven overwhelmingly by the 6, 7, 8 percent increases annually in Medicare and Medicaid, why can't we begin to reduce that growth rate and bring it more close to the inflation rate of 2, 3 percent, maybe 4 percent, 5 percent increases each year?

Finally, I thought one of the most effective critiques of the Republican majority leadership in 2006 and the years before was we weren't passing our appropriations bills on time. They had too much pork in them. Stuff was put in them in the dead of night, and we didn't have a chance to read it and do anything about it. That was the valid criticism of the Republican majority.

What happened this past year after our colleagues won the majority, claiming they were going to do better? Did they do better? Well, we have 12 appropriations bills each year. We should enact each one of them individually. They should be brought up on the floor one-by-one. There should be an opportunity to offer amendments, and they should be voted up or down, right? No, that is not the way it goes. This past year, we had the largest omnibus bill in 20 years. The majority sent us, near Christmas, a 1,600-page omnibus package that combined into one bill 11 of the 12 appropriations bills, and then it hit this floor; there was no time to read it. We didn't know what kind of pork or policy had been added to it. We were challenged to vote for it or not. It was $555 billion. That is worse than we have had in terms of an omnibus package in 20 years.

Frankly, the majority leader, Senator Reid, has indicated that he may not even bring up the appropriations bills or we may have another great omnibus bill this year, but after the election. Well, the election is in November. The fiscal year starts October 1. It is our responsibility to have the appropriations bills passed before the beginning of the fiscal year, October 1.

It is as if he is throwing in the towel before we even get there. Frankly, as an aside, I truly believe we would do much better if we went to a 2-year budget and 2-year appropriations, as over half of the States have. That would help us in this process because this happens every year, and it is getting worse, it seems, every year.

We will soon have the new budget resolution. It will hit the committee next week. I am a member of the committee. It was a failed and unhealthy budget last year that was moved forward by our Democratic colleagues. I am afraid this one will not be much better.

I noticed that the Democratic Presidential candidates are offering a lot of new proposals. Senator Obama, who now leads, has offered 158 of them that would cost at least $312 billion in new annual spending, or $1.4 trillion over 5 years, as we tend to score those things. That doesn't include all of his proposals that are out there.

Madam President, I will conclude by telling the American people and my colleagues that next week we will begin a defining process. Next week, the majority party will offer a budget. Because of the budget rules, with 51 votes, they will be able to pass this budget. So because the Democratic majority has 51 votes, they can pass the budget they want. But we need to examine it because it will tell us and America what their priorities are, what their commitment is, how willing they are to sacrifice and make sure we have fiscal responsibility in this country.

Based on last year's budget, I am afraid it is not going to be any better. Based on the fact that Senator Reid says he doesn't expect we will finish the appropriations process until after the November elections, I don't sense any commitment to do better than the Republicans did when they had the majority. Certainly, this year, their performance was worse. This past year, it was worse, and it doesn't look as if it will be better in the future.

I thank the Chair for this opportunity to share my concerns. I hope we can be frank about these matters because the majority party knows it has a very serious responsibility when it submits a budget. We knew it when we had the majority. I sat on the Budget Committee. Senator Conrad and his colleagues know they have that responsibility. They also know they have the votes to pass this. Therefore, there can be no excuses. There is nowhere to hide. Are you going to do anything about entitlements? Are you going to guarantee tax cuts? Are you going to submit a budget that projects lower spending or one that is filled with gimmicks to hide even more spending increases? It is a big deal. We will be talking about this for some weeks. I hope our colleagues will focus on this.

Madam President, during a debate about strategy on how to defeat al-Qaida, goal No. 1 should be figuring out their plans. What are their tactics and targets? How do we do this? We use our technological advantages to get this information. That is what the FISA modernization bill allows us to do.

The Congress has been working on FISA modernization since April 2007--over 300 days ago. But I guess 300 days is not enough time for a bill of this magnitude, right? But wait, the Constitution of the United States has written in only about 115 days, and that included travel time on horseback for the Founding Fathers. So the entire Constitution of the United States was written in one-third of the time we have spent on FISA modernization.

Congress has plenty of time and has had plenty of time to debate this issue. Given that the executive strategy in this instance is paramount, the next President's decision, whoever that may be, will be critical. Like many people, I have watched many of the Presidential debates. One thing amazes me: Out of at least 32 debates and forums, the candidates have yet to receive one question on FISA, the most important piece of legislation certainly in the last number of years and certainly in this Congress. There has not been not one question on the Foreign Intelligence Surveillance Act and what we are trying to do here. So we are continuing to talk about the most important bill in the entire 110th Congress, which is apparently not important enough to come up during over 50 hours of discussion with our next Commander in Chief.

I did hear an interesting comment during the most recent debate. A decision to utilize military strikes to kill al-Qaida in Pakistan was seemingly supported. That is the irony of this situation. It is OK if we kill terrorists overseas with missiles, but we cannot listen to the phone calls of new terrorists without demonstrating ``probable cause.'' We have to ask what probable cause is and why it exists at all. That will tell us to whom it belongs. Probable cause is a check on Government power rooted in the due process guaranteed by the Constitution. Who may claim such due process protection under the Constitution of the United States? U.S. citizens, not foreign citizens overseas.

We are constantly hearing from the leadership in Congress about the need to ``bring people together.'' Yet, at every turn, they seem to be willing to set aside bipartisanship in favor of the preferred policies--in favor of preferred policies of extreme political organizations. If Democrats really want to change the tone in Washington, they are going to have to, at some point, say no to the more radical elements of their base.

With the current stalemate on FISA modernization legislation, we have seen both political parties blaming each other for the delay. We have heard notions that we are not in danger due to the lapse of the Protect America Act. While our opinions on this issue will remain in bitter disagreement, the solution to these problems is quite easy. In fact, it should take about 15 minutes to solve this problem. Here is the answer, and it is just four words: Let the House vote. That is it. It doesn't take a genius to come up with a solution. All of the disputes will go away, and the bipartisan majority of the House will approve the bill if given a chance to do so. Is this a novel concept? The House of Representatives has been voting on bills since 1789--over 219 years ago. Will we ever be in a situation as complicated as this again, where the solution to every problem is allowing our elected officials to vote?

Back on December 17, on this very floor, I asked one of my Democratic colleagues if he agreed with me that should the FISA bill pass, it would be one of the best examples of bipartisanship in the whole 110th Congress and maybe in the history of this body. He agreed with this notion. Months later, this worthy goal came to fruition in the Senate.

As we all know, the Senate approved a FISA modernization bill by a bipartisan supermajority vote, a veto-proof margin. Senators from both sides of the aisle engaged in lengthy and informative debate and came together to pass a bill that met the goals of modernizing FISA.

This rare demonstration of unity came to a crashing halt on February 14. Rather than allow a bipartisan majority of the House to vote on and pass this bill, the House leadership refused to allow a vote on this bill. The House spent its last legislative day, before their weeklong recess period, debating and voting on a contempt resolution to further a partisan fishing expedition that has led to no credible evidence of wrongdoing. House Democrats had been sitting on these resolutions since July, for over 201 days. Yet they determined that they were so important that they superseded the needs of our intelligence community and the needs of protecting the American public.

So a bipartisan majority of the House was ready and eager to vote on this bill and was prohibited from voting on this bill. While numerous lawmakers stated they would stay in Washington--including me--for as long as it took to get this bill passed, the leadership from the House forced them to go on vacation. So they were prohibited from voting on a bipartisan bill to protect our country but were mandated to take a recess period.

You want to stay and vote on this bill? Too bad. We would rather you take some time off. Go back to your districts and take a break. Don't worry about our intelligence community. They have all the tools they need. That is what the House Members heard. These Representatives did not need to be patronized; they needed to be given a chance to vote.

The Attorney General, the chief law enforcement official of the United States, and the Director of National Intelligence, the person who is responsible for our intelligence in this country, say that the lapse of the Protect America Act caused us to miss information. These officials have more institutional knowledge on this topic than anyone in either body, and they dispute the notions that ``the intelligence community has everything it needs.'' With all due respect to all of us who serve as politicians, I am going to trust in the expertise of the Attorney General and DNI over the assurances of politicians in an election year.

So why doesn't the House leadership allow a vote on this bill? Could it be because they know it will pass, which it would? But we cannot have that. Heaven forbid, democracy would be free to run its course.

So rather than vote on this bill, we are hearing that the House leadership wants to conference this bill. Conferences are about resolving disagreements between the Chambers. But remember, a bipartisan majority from both Chambers has no disagreements on this bill. There are no disagreements to resolve between the majority of the Senate and the House. So a conference is entirely inappropriate in this situation.

I have also heard an argument that the House needs more time to review the immunity provision--the immunity that would protect these companies that patriotically cooperated with us in collecting the information that protected American citizens, which are now being sued in 40 different lawsuits for hundreds of billions of dollars. I want to make sure everybody is perfectly aware that the immunity provision has been publicly available and unaltered for 133 days. It has not been hidden. It has been available to everybody in Congress. It has been available to the world on the Web site of the Senate Intelligence Committee. It only takes about 3 minutes to read it. It should not take 133 days to analyze it, while putting our American public at risk.

I am also amazed at the false descriptions floating around about the terrorist surveillance program, TSP, which is the program the President described on December 17, 2005, during a radio address. We have all heard the terms: the warrantless wiretapping, domestic spying, or eavesdropping bill. The list goes on. Let's look at what the President actually said during his radio address on December 17, 2005:

In the weeks following the terrorist attacks on our Nation,

I authorized the National Security Agency, consistent with

U.S. law and the Constitution, to intercept the international

communications of people with known links to al-Qaida and

related terrorist organizations. Before we intercept these

communications, the Government must have information that

establishes a clear link to these terrorist networks.

I don't see anything in this statement about domestic spying. I thought the definition of the word domestic was pretty clear. If the program intercepted communications in which at least one party was overseas, not to mention a member of al-Qaida, then it seems fairly obvious that the calls were not domestic.

Look at this chart. Is this such a hard concept to grasp? The last time I flew overseas, I didn't fly on a domestic flight, I flew on an international flight. And there is a big difference between domestic calls and international calls. My last phone bill showed a big difference between the price of the two. Is it a domestic call when a foreign terrorist calls someone in our country or someone in our country involved in terrorism calls a terrorist in a foreign country?

``Domestic spying'' may sound catchy and mysterious, but it is a completely inaccurate way to describe the terrorist surveillance program or the FISA modernization bill. Why don't we describe them as we should: international spying. Isn't that a more accurate description? I guess accurate descriptions take a back seat to terms which incite fear and distrust in our Government.

What about ``warrantless wiretapping,'' doesn't this sound like a bad thing? Perhaps we should read the fourth amendment to the Constitution. Notice that not all searches require a warrant. Every member of the public who is up in the galleries watching us today went through a warrantless search to get into this building. Every time an American comes into the United States at the border, they go through a highly intrusive warrantless search. Every time an American gets on a plane, they go through a warrantless search. Every time an American goes to see a rally or speech from the President of the United States, thus exercising their first amendment rights, they go through a warrantless search. And there is good reason for it.

Remember, foreign citizens overseas receive no protection from the fourth amendment. So ``warrantless wiretapping'' in this instance is perfectly constitutional. In addition, look at what the Foreign Intelligence Surveillance Court, the highest court to look into this issue, previously said. This is 310 F3rd 717, FISA Court of Review in 2002. It is called In re: Sealed Case:

The Truong court, as did all the other courts to have

decided the issue, held that the President did have inherent

authority to conduct warrantless searches to obtain foreign

intelligence information. . . .We take for granted that the

President does have that authority and, assuming that is so,

FISA could not encroach on the President's constitutional

power.

That is one of the few formal cases out of the FISA Court.

Given the staggering amount of misinformation in the public, how many people have incorrectly stated that the Government can listen to all of their phone calls, read all of their e-mails, spy on American families overseas, even spy on our own military members overseas? How many of these false representations have been made by my colleagues and by others?

These accusations are completely false and are meant to incite fear of nonpolitical intelligence analysts who serve regardless of whom the President is. Isn't that the real fear mongering? Terrorists killed 3,000 Americans on September 11 and killed hundreds of other people in Madrid, London, Bali, and Kenya. They have sworn to kill more. They have said that ``the streets of America shall run red with blood, casualties will be too many to count, and the next wave of attacks may come at any moment.''

These terrorists recently called for the President of the United States to

be ``received not with roses and applause, but with bombs and booby traps'' during a recent Presidential trip overseas. So they wish death on all Americans and they threaten the assassination of the President of the United States. Yet if we acknowledge their threats, if we try to prepare for these attacks, we are accused of the politics of fear. But there is no problem when numerous individuals completely misrepresent how our Government protects our country. Nobody is calling these tactics ``fear mongering,'' so is it perfectly acceptable to question the integrity of thousands of Americans who have taken an oath to defend the Constitution of the United States and who have dedicated their lives to preventing our great Nation from suffering these terrorist attacks?

I am sorry to break it to people, but our intelligence analysts have more important things to do than look at someone's eBay transactions and listen to phone calls from the Jones family on their family vacation in Italy. I guess I shouldn't be surprised by these conspiracy theories, given the vocal lunacy expounded by those who think the September 11 attacks were an ``inside job.''

The FISA modernization bill should be the best example of how meaningful legislation becomes enacted. This bill passed by a veto- proof majority in the Senate. It came out of the Senate Select Committee on Intelligence, on which I serve, 13 to 2. It was bipartisan. It is supported by the intelligence community, and it has the support of the executive branch. Isn't this about as good as it gets? When a bill has support from all these elements, there is no excuse for it being held up.

The House leadership has indicated it intends to unveil a ``compromise'' FISA bill. Apparently, House Democrats are using an unconventional definition of the word ``compromise.'' What would they call the Senate bill? We went through months of hearings in the Senate Select Committee on Intelligence asking about pros and cons, asked thousand of questions, met with the top people in all fields, were read into the program, went out to the National Security Agency to look at these programs. What do they call the Senate bill?

No one, not the administration or anyone in the Senate, got everything they wanted with the Senate bill. It is a compromise. Is it everything I want? No. Are there things in there I wish we did not put in there? Yes. But it is a compromise, and I voted for it.

All sides had to make concessions before a final solution was reached 13 to 2 in the committee and it was bipartisan, 68 to 29 in the Senate--bipartisan. That is precisely what the compromise is all about. I simply do not follow the logic of rejecting a bipartisan result, which is what we already have, in favor of a more partisan solution and calling it a ``compromise.'' I can only assume that when House Democrats say ``compromise,'' they mean something else--capitulation.

I don't intend to capitulate on this issue. I hope the Representatives in the House who share my view will weigh in with the House leadership and other Democrats who have been holding this up to the detriment of the citizens of the United States of America. I have been to this floor countless times to discuss FISA modernization, and I will continue to do so. I will continue to fight for this cause because it is the right thing to do and especially since so many in both parties have come together to support the Senate bill and would support it in the House if the chance was given.

Madam President, we are still in the month of February. We should be doing our work here in the Senate. We should be working toward legitimate, bipartisan agreements on the issues that matter most to Americans.

That is what our constituents sent us here to do. Of course, in an election year, particularly a Presidential election year, we unfortunately slide into a silly season where very little gets done.

Instead of listening to each other and trying to come up with commonsense solutions, there is a temptation to use the Senate as an arena to make one's opponents look bad.

Usually the flowers of that silly season do not bloom until the summer. We are still in the month of February! We need to be getting the work of the American people done. We are in a time of legitimate economic distress.

There are very different ideas about how to deal with this economic slowdown. There is nothing wrong with this difference of opinion. The majority seems to think that the principal way to deal with an economic challenge is to spend money. To be clearer, they think that the answer is to spend taxpayer money. And make no mistake, if there is not enough taxpayer money to go around, the solution to an economic slowdown for the majority is to raise taxes. Conservatives have a slightly different understanding of what it takes to get the economy running again.

When the companies that Americans work for are loathe to invest, it hurts employees. When they don't invest, these companies do not create jobs. And when the economy is weak, it makes it more difficult for an entrepreneurial American to take the risks necessary and obtain the credit to start new businesses that will employ the people in his community.

So conservatives think we should do more to encourage business investment and capital formation. Both sides want to do what they can to get the economy humming. And both sides think there are different ways to accomplish this. Sounds like an opportunity for compromise to me!

But I think that some of my colleagues are more interested in an issue than a solution. We should not elevate politics above solutions. Congress needs to come together. Conservatives believe that their policies will work effectively to help the economy and the families that depend on good jobs and economic growth. We are not asking much.

We are simply asking that our ideas be taken seriously. And we should be. Even in the most liberal of States, Members of this body have many conservative constituents. Is it really too much to ask that those ideas be given an opportunity for debate on the Senate floor? It shouldn't be.

I am not sure, however, that the majority is interested in that debate. Twice this week, Senate minority voted to proceed to bills offered by the majority leader and my colleague from Wisconsin, Senator Feingold. Yet after voting to proceed to those bills, we were accused of blocking debate on the bills we helped to bring to the floor. That really is a classic.

The majority casts 21 votes against proceeding to a bill the majority leader himself wanted to proceed to debate. The minority casts the votes to allow that debate. And then the minority stands accused of delay.

A similar pattern has occurred with this housing bill. The majority rushed a bill to the floor. They bypassed the relevant committees. They bypassed the regular order.

In their haste, they made a small mistake with the legislation. Well, maybe it was not that small. The majority intended to spend $2 billion on counseling for distressed homeowners. They accidentally made this a $200 billion program; $200 billion.

I understand that this is a mistake. But it is a mistake born of a cavalier approach to legislating. We could have had a consensus bill.

Instead, the majority never consulted with the minority as this bill was being put together. In our view, we have a much better plan. It includes titles that would address taxes, capital markets, housing, and tort reform. We would keep taxes low.

We would extend the 2001 and 2003 tax cuts, preventing a looming tax hike, and making sure that working families do not get socked with thousands of dollars in extra taxes when these tax cuts expire in 2010.

We would increase the value of homes and prevent an unfair tax on their sale. We would help to keep jobs at home by encouraging job creation.

We would help prevent foreclosures by providing credit stability.

We would maintain the value and security of neighborhoods by encouraging the speedy sale and renovation of foreclosed homes.

And we would protect small businesses from the threat of excessive and frivolous lawsuits.

And let me tell you, when I talk to businesses, businesses that are subject to incessant litigation, tort reform is at the top of the list of things we have to do. It hurts companies large and small, and we need to do something about it.

I think if we had been invited to the table to discuss this bill, had been a party to the negotiation, or even been allowed to offer amendments, we could have worked something out on this bill.

We could have found common ground. I know that is what the American people want. We have been hearing a lot about common ground these days.

Whenever I turn on the television, I hear someone telling us about the need to change our ways in Washington. I hear about the need to bring people together. Well, we certainly have our opportunities.

But I feel that they are being missed. We do not have to be consumed by partisanship. In 2005 and 2006, Congress accomplished a number of serious policy reforms. We passed bankruptcy reform, class action reform, energy and highway bills, CAFTA and other trade bills, and the most significant reforms of pension laws in 30 years.

And those bills only became law because of debate, negotiation, and compromise. Through amendments, the regular order, and serious debate, the Senate was able to pass consensus legislation. And today? It is not quite the same.

Take it or leave it is not the stuff of statesmanship. It is the stuff of the sandlot. Leadership demands a willingness to listen to both sides. It requires compromise and openness to other ideas. The American people have made their position clear. They are tired of business as usual.

In the coming months, I hope to work with the majority on the issues of importance to the American people. The last week has not been very promising. Nonetheless, my hope is that Congress will be able to accomplish important reforms for the American people even in this election year.

Madam President, I suggest the absence of a quorum.

Mr. President, let me commend the Senator from Ohio for his very thoughtful and very persuasive remarks about a crisis that is gripping almost every family in this country. We are in an extraordinarily daunting moment in our history, and I was disappointed, to say the least, when our colleagues on the Republican side blocked consideration of the Foreclosure Prevention Act of 2008. Every household in this country is beginning to recognize the specter of decreasing house prices, and for many it is not just a looming potential, it is a reality, and it is forcing them to consider very difficult choices in their own family lives.

We have had a situation over the last 8 years in which the income of working families has been stagnant, and in contrast, prices for items that are essential, such as energy and food and health care, have gone up dramatically. Families across this country have been squeezed by flat incomes and rising prices. But there was one point of hope and confidence, a foundation, at least, for their hopes going forward, and that was the value of their home because it was appreciating. Now that has reversed dramatically, and there are estimates that if nothing is done, if the administration continues to block efforts through their colleagues here in the Senate and the House, we could lose somewhere up to 30 percent of the value of homes throughout the United

States, from their peak several years ago to the trough that is anticipated. That would mean the loss of $4 to $6 trillion in household wealth--a staggering figure. It is a figure that, from a macroeconomic standpoint, would have huge ramifications.

But let us step down to the actual effects on a family. What does it mean? Well, it means your senior in high school who was planning on going to a prestigious college is not going there. They are going to find an alternative, maybe a State school or another school, because you were going to pay for that, partially, by taking some money out of your house, which was worth so much. If you didn't have adequate health care, that was the reassurance you had, that if there was a major health care crisis in your family--a child or your spouse--that at least you could go in and quickly get some money. Now that has evaporated. If you are a retiree or about to retire, your plan was pretty simple: You had a home you were going to sell and you were going to use the profits to help you fund your retirement.

This housing crisis is affecting working families across the country. They are now discovering, around the kitchen table, that their plans are being frustrated. We have to do something.

Yesterday, when this Senate failed to at least consider moving to legislation like this, I think it is a telling indication of the detachment from the reality of American lives that the administration and some of their colleagues here have.

Today, in my home State of Rhode Island, an added complexity, unemployment, is beginning to creep up. And ``creep'' is probably too mild a word. It is 5.67 percent, the worst record of unemployment we have had since the mid-1990s. That is another blow to the working families in this country.

So we must act. One other startling statistic to me is today it has been estimated that 10 percent of the households in America are upside down, not physically but financially. Ten percent of the homes, the mortgage is greater than the value of the home because of declining home prices.

Now, what does that mean? Well, not only have you lost your nest egg, in many cases you now are in a situation of being tempted to just walk away from the home. Why are you making expensive mortgage payments at great sacrifice when the home is not worth it?

These are real problems people across the country are facing. It is no longer a localized problem. It is no longer a certain section of the country is having a bad time, but the rest of the country is doing well. Nationwide, for the first time since the Great Depression, we have seen housing prices decline. That is a phenomenon that has to be dealt with. Ignoring it or suggesting that we are indifferent to that, as I think one can assume from the action of yesterday, is, I think, not only wrong, it is bad policy. It also is bad policy because the sooner we take proactive action, the more effective we will be in lessening the consequence of this crisis on working Americans.

We are going to act eventually. This is not going to go away. The staggering numbers that Senator Brown pointed to, the estimates that there are so many more interest rate resets and so many more people will be overwhelmed by these alternative mortgages, these subprime mortgages, that is not fiction; that is the projection of the financial analysts. It is going to happen.

We have to move now. If we move now, we move deliberately. We cannot eliminate some of the pain, but we can certainly lessen it. We also have to recognize, too, that we can only help those who are prepared to carry and shoulder the mortgage going forward. But I think if we act, if we act properly, we cannot only make progress, but we can respond to what is becoming an overwhelming cry for relief for American families across this country.

In Rhode Island, for example, we have seen mortgage delinquencies increase from 6,100 in the third quarter of 2005, to 10,300. Again, Rhode Island is the smallest State in the Union. We have 1 million people. So these numbers, when you project them to Ohio, are much larger. But in my State, we are, unfortunately, seeing unprecedented foreclosures.

According to the Joint Economic Committee, the number of subprime foreclosures in Rhode Island will total 5,800 between the third quarter of 2007 and 2009. We are seeing an acceleration and, in fact, we have the dubious distinction of having the highest foreclosure rate in New England. There are other parts of the country that are worse, but we have that unfortunate distinction.

We are going to see the cost of these foreclosures in Rhode Island rise to an estimated level of $670 million from the end of 2007 to 2009. Those are huge figures from a small State like mine. In fact, forecasters are estimating that the foreclosure cost could total nearly $104 billion nationwide. But one of the things about these numbers that the numbers are growing--I have been looking closely at this crisis since last April when I was chairman of the Subcommittee on Securities and Insurance. We had a subcommittee hearing on securitization of subprime mortgages and the experts estimated that the subprime crisis was going to result in $19 billion in losses worldwide; that it was over because the mortgages were no longer being issued; that we were in a situation that would be almost self-correcting if we just let the markets work their will.

Well, that $19 billion in terms of losses to financial institutions is now being estimated to be as high as $600 billion worldwide, and the losses keep growing and growing and growing.

Again, I think another strong rationale for immediate action, not simply letting the market take its course, is we are seeing not only a deterioration in the financing mechanisms in the mortgage market, but this liquidity crisis is spreading over to other financing mechanisms. We have seen financing mechanisms for municipal bonds, for example, literally shutting down. There was a technique where municipalities and hospitals would, on a weekly basis, reset the rate for their bonds in an auction. The auctions have failed. The Port Authority of New York just a few weeks ago went from an interest rate of 4 percent to 20 percent, the default rate.

I have talked to a hospital in my State. I asked them, among many other issues, what is happening with respect to their financing. Their rates are shooting up because their option securities are not working any longer.

This credit crisis, this liquidity crisis, is spreading from mortgages to car loans to securitization of credit card receipts to municipal securities, and it is slowing down the economy.

Now, the President does not think we are going into a recession. But, frankly, most everybody else does think we are going into recession. And we have to act, not only to directly respond to this housing crisis, but also to pull this country back as quickly as we can from this pending recession.

I think one of the most important lines of approach to dealing with this problem is bolstering the housing market. That was one of the major engines that moved our economy for so many years. If we let it deteriorate, if we just shrug our shoulders and say, eventually, it will come back, we not only will see a very poor housing market, we will see a recession. And it will be more severe and more consequential than it ought to be.

Now, the Federal Reserve has cut interest rates dramatically. We, very quickly, in a bipartisan fashion, passed a $168 billion stimulus package that will help. But I do not think it is going to be sufficient unless we make significant efforts to deal with the housing problems that are affecting all Americans today.

The administration proposed a Hope Now Plan, a voluntary effort to deal with foreclosure problems. And, again, as Senator Brown pointed out today, to date 3 percent of potential foreclosures have been avoided through this voluntary effort. This is not an effective way to deal with the huge problems that threaten the economic well-being of this country and all of the families of America. This administration is great on slogans but poor on strategy and execution. Just a week after I was talking to the Under Secretary of the Treasury about the Hope Now Program, I said: Well, do you have a plan B? This does not seem to be working.

``No, this will work. We will have the metrics in a few weeks.'' Then the administration announced another program. I think it is called the Lifeline

Program. Well, we need something more than slogans. We are going to need something more than hopeful wishes that everyone will get along and coordinate together. We need definite help for the homeowners in our communities.

Embedded in the legislation that Senator Reid proposed was that specific kind of help: foreclosure counseling funding, CDBG monies for communities to deal more comprehensively with the problems caused by foreclosures, because one of the consequences of foreclosure is it is not just the individual's home, statistical analysis over many years points out very clearly that the surrounding homes lose value when there is a foreclosure on the block. And if those homes are on the tipping point, guess what. They will tip into foreclosure. I do not think I have to tell anyone in this Chamber, because we have seen it before, that once you have this growing sort of malaise in the community, it spreads block by block by block by block until you have a community-wide problem of not only foreclosures but of despair.

I am taking, I think unfortunately, an example from Senator Brown's State. But I read a few weeks ago about a community in the Midwest, either Ohio or Pennsylvania, and it was an old ethnic community. In fact, I think the nickname for the community was Slavic Town. There, the foreclosures have been so extensive that literally gangs are going in and ripping off the vinyl siding, the plumbing. They are taking out the copper piping because it has been abandoned, this forlorn community, in the heartland of this great country.

A tragic case was a retired gentleman who was trying to protect his property which he had worked for all of his life. He was killed by some of these marauding gangs. That is here in America. We are just going to sit back and say: Well, the market will adjust someday. No, I think we have to do much more.

Unfortunately, because of the policies of this administration, we are not as well positioned to do what we have to do. Yesterday Chairman Bernanke was before the Banking Committee. In response to a question by Senator Dodd, he said: Frankly, we are in a worse position today than 8 years ago to deal with this crisis, the housing crisis. Falling productivity, falling value of the dollar--yesterday, the dollar hit a new low against the Euro, and I think today against other currencies. Surging oil prices--yesterday the price of oil went to $102 a barrel, which is translated automatically at the gas pump into higher gasoline prices, higher heating oil prices.

These are huge, huge, huge problems. Because of decisions made by this administration, we do not have surpluses we had 8 years ago. We are committed to a conflict in Iraq which costs $190 billion a year. And even with a change in policy, there will be, unfortunately, not a dramatic shift in spending in the next several months because it takes time to disengage and to change policies.

So we are seeing economic vulnerabilities because of, I think, the policies of this administration. We have forfeited the strength we had 8 years ago to deal with these issues. We understand, too, from looking across the globe at other countries that if you do not move promptly and aggressively and deal with problems like this, they do not go away, they get worse.

In the 1980s, we had a S&L crisis. It took about 2\1/2\ to 3 years for, first, the Reagan administration, then the George Herbert Walker Bush administration to deal with it. In those 2\1/2\ years, experts on either side of the aisle pointed out that the cost of remediation went up and up and up. I fear that is the same situation we are going to have today unless we deal promptly and immediately with this housing situation.

Again, I think the vote yesterday to stop consideration of legislation to help deal with this crisis was very short-sighted and unfortunate. Now, as I said before, the legislation we would have considered, the Foreclosure Prevention Act, of which I am a proud cosponsor, deals with, in a very pragmatic way, many of the features of the housing crisis that are of immediate concern: the $200 million foreclosure counseling, and part of that has to be not only setting up the counseling but also outreach. We have to do more of that.

It also allows State housing finance agencies to increase their bonds, raise capital to buy mortgages to essentially take out the current mortgage holders, renegotiate the terms with the borrower, and put them in a mortgage plan they can live with and afford. In fact, the President has called for that, but he is objecting to its inclusion, I presume, in this legislation. Then there is a change in the Bankruptcy Code, which has been carefully tailored so as not to roil the financial markets. It would allow a very limited category of individuals who have these subprime mortgages to go into bankruptcy court and allow the bankruptcy judge to set up a new payment plan. The first criterion he or she would have to look at is the fact that these individuals do, in fact, qualify for bankruptcy protections, that if there is a restructuring of their mortgage loan, they can carry out the terms of that loan.

This is not only giving people a chance who don't have the wherewithal to take up that opportunity. There is also language in the bill that sets the lowest rate charged as the prime rate, plus a premium for risk. So this does not allow a bankruptcy judge to take an 11-percent mortgage and make it a 1-percent mortgage or a zero-percent mortgage. There is a very narrowly tailored exception. As my colleague, Senator Brown, pointed out, you can do that with a second home. You could do that with a farm, if you are in bankruptcy. I don't see why, in this particular crisis, we cannot extend that same protection to homeowners who have subprime mortgages and need immediate help. I think it would accelerate efforts to not only help these individuals in bankruptcy, but it would send a strong message to the financial community that unless they get engaged with working out these foreclosures and mortgages, there is the alternative of bankruptcy court which, if they think it is so onerous, then they should be even more incentivized to work with borrowers to ensure foreclosure doesn't take place and new mortgage terms are negotiated.

An additional element in this legislation is language I suggested as a way to prevent a reoccurrence in the future of this type of mortgage problem by giving the borrowers, in a timely way before they close on the loan, specific information that is essential. The most specific information is the maximum payment they would pay under the terms of the mortgage. There is a lot of discussion about people who were winking at each other across the table, can't afford the mortgage, but ``I will take it if you give it to me.'' Many people honestly walked in, sat down, and thought they were getting a mortgage of 5 or 6 percent with a payment on a monthly basis of perhaps $1,500 or $2,000. Tough to afford, but it was within their budget. But lo and behold, years later or months later, that initial teaser rate became much higher. That maximum payment should be disclosed. A borrower should be able to look at the piece of paper and say: At some point in this mortgage, I will have to be paying $2,500 a month. That is the type of information people need to know. Frankly, many would say: I can't afford that.

There is a suggestion I have heard so often in the debate that we would be rewarding families and homeowners who were trying to take advantage of a good deal with these subprime mortgages. The impression I have, from talking to people in Rhode Island, is that for many families, going back 2 or 3 years, they found themselves saddled with extraordinary credit card debt at interest rates that could be as high as 15 to 18 percent. Why? If you have a health care problem, where do you go? The first response is to put it on the credit card. If you have to go to an emergency room and you don't have health care insurance, if you have an unexpected expenditure, the first thing you do is to put it on the credit card. So many families were stuck with a huge credit card bill.

Somebody walks in and literally sells them a bill of goods by saying: You have 18 percent interest rates. I can put you in a mortgage for 2 years at 9 percent. Of course, it goes up a little later. The little later was not dwelled upon. So for many families, this was not an irresponsible, irrational act.

They were buying time, in other words. They were hoping this would be a bridge to a better future, that they would get a raise at the job so they wouldn't have to depend on their credit cards and, when the reset came up, they would be able to refinance. Little did they know that many of these subprime mortgages were constructed so there was a prepayment penalty exactly at the time the reset took place. So as you tried to get out of it, you discovered you would be paying a huge penalty.

The point I wish to make is we have families who now, for the last almost decade, have been struggling. They have exhausted all their options. The last option was their home. Now that option seems to be evaporating in terms of financial strain and support. What we have to do is respond. I believe that is the nature of Government, to respond to the genuine concerns, the genuine expectations of the people we serve. I defy anyone in this Chamber to go back to their States and talk not just to low-income families but to every family and say: Shouldn't we be doing something dramatic, challenging, visionary, and doing it immediately with respect to housing? The answer would be an overwhelming yes. We should listen to the people of America.

I yield the floor.

Mr. President, I thank my distinguished colleague from Michigan for her attribution, and I rise this morning to echo some of the comments of my colleague and others who have lamented what the Senate did yesterday.

We have a situation across the landscape of this country in which our economy is headed onto the shoals of a recession, with some economists believing that we are there already, and the very essence of that recession, which hurts American families in real terms, stems from the housing crisis that exists in this country. Instead of having responded to the storm clouds of the crisis that were on the horizon a year ago-- in the Banking Committee, of which I am privileged to be a member, I said we are going to face a tsunami of foreclosures--the administration said, oh, no, no, no, that is an overexaggeration. Well, unfortunately, we haven't even seen the crest of that tsunami.

The reality is that as the administration hit the snooze button then, instead of responding to the oncoming crisis and limiting its scope, yesterday our colleagues on the other side of the aisle did exactly the same thing, opposing the majority leader's opportunity to make sure we address the housing crisis that exists in this country in a way that not only saves American families from having the American dream become an American nightmare, but also, at the same time, in dealing with the very core underpinnings of where this economy is headed--in a negative direction--and turning it around. That is what yesterday's vote was all about.

Everyone except President Bush and some of his colleagues seems to understand that we are in some very serious economic situations. I saw the President's press conference yesterday. Even as gas prices in some parts of the country are already at $3.60 a gallon, when he was told what it was going to do when it hits $4 a gallon, he said: What $4 a gallon?

Well, I guess if you never have to pay for gas, you are totally disconnected from the realities of average Americans. But, yes, that is where we are headed. He doesn't seem to understand we have a serious economic situation.

But let us get real. It isn't largely those of us in this body who understand what is going on, it is the American people, across the landscape of this country, who are feeling the effects of this downturn firsthand. They are the ones receiving foreclosure notices; they are the ones struggling to balance their checkbooks; and they are the ones reaching out to Congress for help.

Yesterday the majority leader tried to bring up a bill to help those struggling in this economic downturn, and

yesterday Republican Members of this Chamber blocked that bill, in essence blocking help for those American homeowners who are on the verge of losing their home. The Foreclosure Prevention Act gets to the heart of our economic crisis--that is, the housing market.

As I and others on the Banking Committee have said, the downward spiral of the housing market is the reason we are facing such a difficult economy. We cannot think we will get the Nation back on track without legislation to address the weaknesses in the housing market. The bill that Republicans blocked would have done one major thing: Keep families in their homes.

Beyond the economy, this goes to the very heart of our families' ability to grow and prosper. Home. Home is where we are brought from the hospital when we are born. It is home we come to. Home is where we are nurtured as we grow. Home is where we get to celebrate, most of the time, our birthdays. Home is where, in fact, we also share moments of sorrow. Home is where we often take care of a sick or dying loved one. Home is the very essence of the American dream.

Beyond what it means to us and our families in the context of the development of our lives, home is also the single foundation of the individual American's economic ability to prosper. It is the single biggest asset most Americans will have in their lifetime. It is the asset they will use very often to borrow in order to educate their child and send them to college. It is the asset they may draw upon if they have a significant illness. It is the asset they will rely upon as they grow older and seek retirement.

When it means so much to us as a society, both in the personal context of what home is and the values that surround it mean, and when it means so much to us individually and collectively as communities and as a nation in terms of our economy, it is unthinkable that we could not get progress on a bill that saves the very essence of that American dream.

Yet that is what happened yesterday in the Senate. The bill that was up provides funding for counseling in order to reach and help families at risk of losing their homes. Many American families are sitting around the kitchen table looking through their mortgage bills and their finances and those bank notices. Many of them have turned to their credit cards to float their personal debt.

They are lost. They do not know where to turn. And these counselors who were part of the bill could help offer them real solutions and options to help in averting a foreclosure. Does not that make sense? It does to me. That is what the bill allows.

The bill also provided funding to allow communities with high foreclosure rates to access an existing program, community development block grants. With these funds communities can purchase foreclosed properties for rehabilitation, rent, or resale.

There are some who have said in this debate: Well, you know, those borrowers, they are responsible for making their own decisions; it has nothing to do with me. Well, for every foreclosed property in a neighborhood, those who have their properties adjacent to or nearby within that neighborhood have a decrease in value. Having a series of foreclosed properties, as we have seen in some parts of the Nation, having communities abandoned does not benefit anyone. It decreases surrounding home values; it attracts crime and vandalism.

The bottom line is that foreclosures destabilize neighborhoods.

The funds in this bill, which the Republicans have not allowed to move forward, allow communities to stop the spiral before it starts. Does that not make sense?

The bill's most controversial piece--there are many others, many others that I think were pretty universal; that is, that should have been supported. But its most controversial piece put in by my friend, Senator Durbin, his bankruptcy provision would, in essence, change the bankruptcy law to give judges the discretion to modify loan terms for a primary residence, in essence, where you call home.

Right now the law allows for modifying those loan terms for vacation homes, something that is not your primary residence. So you can have a vacation home, a time share; you can have any other second home under existing law. If you have some financial trouble, you can actually get the bankruptcy judge to modify those terms. But when it comes to your core home, your principal residence, the place where you nurture and grow your family, oh, no, you cannot do that.

Does it make sense that we have greater value for a vacation or secondary home and less value for the primary residence of American families? That would be the equivalent of something along the line of: You can get a modification on Camp David, but you could not get any modification at 1600 Pennsylvania Avenue.

Now, of course, in this particular case, that example does create so vividly for people what we are talking about. In either case, the President does not have to pay a mortgage on either of those properties because they are owned by the American people. But my point is here is the primary residence, you cannot get any help. The secondary residence, you can get help. It does not make any sense. The thing is, most Americans do not have a Camp David, and they are asking for help to save their house on Main Street. This makes sense.

Now, the majority leader and Senator Durbin and others worked out a compromise to make sure this provision that was in the bill was even more narrowly tailored. More narrowly tailored? How so? Under their compromise, the only families who could request a court-ordered change to their mortgage are families who would otherwise lose their homes to foreclosure.

But that was not even all. It went on. It went beyond that and it said: Only those families who can pass a strict means test, their ability to pay in bankruptcy, and therefore can prove they cannot afford their current mortgage are eligible. That was not it. They went beyond that. They said: Only families who are currently struggling with what type of mortgage? Any mortgage? No. Only nontraditional and subprime loans, the very essence of the types of mortgages that have created the crisis in America that were spun out there in a way, attracting people into mortgages without the appropriate credit counseling, that they should have never been attracted into anyhow.

So the universe was further limited, further limited. And furthermore, to give the lenders some additional guarantees, if the families, after the bankruptcy judge made some decision to make an accommodation in that loan, if they sell their home after that mortgage modification, any increase in the home value would go back to whom? To the lender. So lenders would have a chance to recoup the loss in that home value.

Now, let me say, there is going to come a point in time that lenders understand that as values continue to go down and down and down, when they foreclose on a piece of property, they are not even going to get that which they, in fact, loaned against.

Is it not far better to be able to sustain a family in their home and to help that value reestablish itself over time and grow and be able to make the lender more whole than to put that family out on the street? Lenders will come to that conclusion at some point.

So these provisions, each time more and more and more narrower, so we were talking only of a universe of those people who were being hurt, had no financial ability to pay the mortgages that they should have never gotten into, that was offered by the industry to lure them in, lower interest rates, and then reject afterwards, and with the ability to recoup any value going back to the lender, all conditions that do not exist on a secondary residence.

None of the things I talked about are part of the law as it relates to a secondary residence; they are all about only this limited prime universe, and, of course, anyone who got a conventional mortgage, anyone who did not get a subprime mortgage or a nontraditional mortgage, they were totally, under the existing law, going to continue to be under the existing law. So we had a narrow universe.

This provision that was in the bill blocked by Republicans was not added to harm the banking industry, was not added to hurt mortgage brokers, it was added to help homeowners save their home. This provision is only one of the ways we can help a significant number

of homeowners without costing the taxpayers a dime.

It would help more than 600,000 families in bad loans keep their homes across the landscape of the country. It would help over 14,000 families in my home State of New Jersey avoid foreclosure. That would be a savings of almost $5 million in home values. But if we do not do anything, if we sit back, we risk losing much more. In New Jersey over the next 2 years, we expect more than 57,000 homes to be lost to foreclosure. That means 57,000 families who will have to hand over their keys to their home, 57,000 families who will be forced to say goodbye to the place where they were nurtured and comforted, the place they lived with the good and bad, the place they came home to every night, the place they call home.

In the words of families who know what it feels like to lose a home, they will feel like they will have lost everything. But this is not even about those homeowners. Foreclosed properties have a ripple effect on surrounding homes and the community at large.

In New Jersey, these 57,000 foreclosed homes could cost a $10,000 decrease in the home prices of over 2 million surrounding homes. And, overall, that loss would be about $19.6 billion in home values. That is just in my home State.

The fact is, no one is immune from the ripple effect of this housing crisis. The potential loss to families and communities in New Jersey and across the Nation is far too great for us to sit this one out. I, personally, cannot stand by while Members of the Chamber play games with my home State and with the American dream of millions of people across the landscape of this country.

Collectively, we have much too much to lose. I do not know if other Members of this Chamber do not watch the news, or they do not get the same memos, but foreclosures are going to happen nationwide if we do not do something. Analysts anticipate that 2 million American families will lose their homes over the next 2 years, and 40 million of their neighbors will see their home values decline due to projected foreclosures.

When those neighbors see their home values decline as a result, their ability to borrow against their home for their kid's college education, to have the buffer in case of a major illness in their family or themselves, their ability to do all those things will be affected.

It is not time to play games and use delay tactics. The more we delay, the more homes we risk losing. Approximately 20,000 families lose their homes every week. Every week, 20,000 families see the American dream slip away. These families are struggling. They are trying to pay their mortgages, but they cannot. Most of them cannot sell or refinance. Many of them have found, in fact, the value of their properties is less than the mortgage amount. They need other options, and they are looking to the Federal Government and those who lured them, the lenders, as the first place for help.

The fact is that help simply is not there. Loan servicers could modify the loans themselves. They do not have to wait for a bankruptcy judge, would not have to wait for the Congress to act. Under existing laws, the loan officers could modify loans to make them more affordable and simply are not doing so in sufficient numbers.

A report by Moody's found that loan servicers have only modified 3.5 percent of mortgages that increased to higher rates. These are opportunities to keep people in their home, and instead of dealing with the higher rates, maybe adjust those rates in a way where they would still get a borrower who can continue to pay, wait for the value of that home to build up. But they would not make as much as in the loan they lured these individuals into. A report by the Center for Responsible Lending estimates that the administration's plan that has been put out there as the solution to this problem, to streamline modifications, is only going to help about 3 percent of homeowners, 3 percent.

As a member of the Banking Committee, I asked the Secretary of the Treasury, Secretary Paulson, when he was before us about 2 weeks ago, and yesterday Chairman Bernanke, the Chairman of the Federal Reserve: Are we willing to say 97 percent of the projected 2 million homes that are going to be lost in America, that is a market correction?

Are we willing to accept that 97 percent of those 2 million homes that will go in foreclosure, that is acceptable as a societal value? You hear a lot about family values here. Well, I do not know of any greater family value than the place we call home and a place to call home.

Are we willing to say we will, in our overall economy, accept a 97- percent foreclosure rate as it relates to the nature of our economy and where it is headed, an economy that is stagnant in terms of growth but rising in terms of consumer costs, on gas--notwithstanding the President's lack of knowledge of it--on energy costs as a whole, on rising food prices, and lowering home values? Are we willing to say that?

Are we willing to say to 97 percent of 2 million families: Well, that is a market correction. Yet we heard the rush to get the Federal Reserve to respond to Wall Street and the concerns of shareholders. How about homeowners? How about homeowners? That is simply not good enough.

Thousands of New Jersey families have already gone into foreclosure. Tens of thousands more are behind on their mortgage payments. How many more are we going to watch have their American dream turn into the American nightmare so many are facing. Let me put a face on these statistics: Charmain Perryman, a resident of Nunellen, NJ, she came home last fall to an eviction notice taped to her front door. Perryman, like so many others, had an adjustable rate mortgage that had reset not once but twice, rising from 7.5 percent to 11 percent. She was on the verge of losing her home. Luckily her story has a happy ending. A community development organization, similar to those we want to help through community development block grant opportunities, is buying her home from the bank and working out a payment schedule so she will be able to stay in her home and make responsible payments.

But there are too many families across the landscape of New Jersey and the country that are not realizing that opportunity. That foreclosure notice taped to their door will soon be replaced by a padlock on their door.

The Foreclosure Prevention Act, of which I am a proud cosponsor, offers real solutions for the American family, neighborhoods, and the entire economy. It would help stop the bleeding in the foreclosure crisis.

I ask Members in the Chamber to think about these families when, hopefully, they have an opportunity to vote again. What happened yesterday was embarrassing. I know some camouflage is being offered that, well, we were not going to be allowed to offer certain types of amendments. The reality is, as the majority leader made clear, all relevant amendments would be allowed. Families who are struggling, at the end of their rope, 20,000 families a week losing their homes, don't want to hear about some amendments that ultimately had nothing to do with the very essence of the housing crisis as the reason they are getting put out of their homes. All we are saying is, come to the table. Offer relevant amendments. Let's have a real discussion about how to help families avoid foreclosure. With 20,000 families losing their homes every week, 10 million on the near horizon; with an economy that is bleeding dramatically and that could go, if we do not stem the hemorrhaging, into a deep recession that would have long-term consequences for us as a Nation, both as individuals, families, communities, and collectively, it is not something with which we can afford to play procedural games.

I look forward to next week having a new opportunity, fresher minds' reflection, and an understanding of the grave consequences before us, and an opportunity to rescue--not to do a Government bailout but to rescue--the opportunity of the American dream being snatched away by the American nightmare.

I yield the floor.