Whaling Convention Amendments Act of 2008

Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Madam President, I rise this afternoon to share with my colleagues the good news: that we are about to pass, I believe, after many weeks and months, numerous votes on countless amendments on the floor of this body, as well as efforts in the other Chamber, the Housing and Economic Recovery Act of 2008.

I am going to share some thoughts on where this is and what is included in this bill that passed the House yesterday and is pending as one of the matters that will be considered in the next 24 to 48 hours by this Chamber.

My first expression of gratitude goes to the majority leader, his staff, and others, along with the minority leader's staff, particularly those on the floor who have been very patient.

In the case of the majority leader, he has been far more patient but tremendously supportive of this effort. This has taken a long time and has gone through a lot of different processes over the last number of months to get to the point where we are today: on the brink of passing the most sweeping housing legislation in more than a generation, that will particularly focus on trying to keep people in their homes.

There are literally thousands every day who face the prospect of foreclosure. This legislation will not protect everyone, but it will make a difference in the case of thousands, as well as many of the provisions which I will address in a minute or so. But I begin by expressing my gratitude to those who made it possible for us to get to this point.

Again, the majority leader and his staff played a critical role. Senator Shelby of Alabama, former chairman of the Banking Committee, today the ranking Republican of that committee--we would never have been able to succeed at what we achieved without him and his staff and the work he has done on the committee. We were able to mark up this bill several weeks ago and bring it to the floor of the Senate on a vote of 19 to 2, and that was because of the work of Senator Shelby and others, along with, of course, the wonderful staff I have as part of the Democratic majority of that committee and as chairman of the committee. They worked well together. They spent countless hours. Last weekend alone, they were up until 2 o'clock, 3:30 in the morning trying to iron out details with ourselves and with the leaders in the House of Representatives. There are a lot of people who can claim credit for helping us get to this point. I wish to recognize them and I will continuously over the coming days as we move beyond this legislation.

But it is very important to know that people who never get a chance to speak in this Chamber but who put in the countless hours, the staff who work on these bills, work in our respective offices, work for the committees, do tremendous work on behalf of the American people. I, for one, am very grateful to all who made such a difference in bringing us to the point of stepping up and doing something about this economic crisis, which at its heart, of course, is the housing crisis, and behind all that is the foreclosure crisis.

I wish to share some views on what the bill does and why this moment is important beyond the specifics of this bill.

In my view, we should have and could have acted months ago on this legislation. Regrettably, there are still one or two Senators who are doing everything and anything they can to block this bipartisan legislation from going forward, delaying the kind of relief American homeowners, and so many others, desperately need to get our economy moving in the right direction.

Yesterday, the President of the United States agreed to sign this legislation. That was a reversal. Only a few days earlier they announced they would veto the bill. But yesterday they made the announcement they are going to accept this legislation and they are going to sign it into law.

Let me say how grateful I am to the President of the United States. We are of different political parties. We have different views on many issues. But I thank him. It takes a big person to recognize a mistake, in this case announcing a veto and then changing your mind and saying, in fact, this legislation deserves passage. I appreciate President Bush's willingness to come to that point of view and to make that announcement and to virtually, I hope, guarantee the adoption of this legislation and to begin working to make a difference in people's lives.

As many of my colleagues know, we are in the midst of the most serious economic crisis to face our Nation in many years. Certainly, the American people live it every day. They don't need to read the data; they live the data, whether they are losing their

jobs, losing their homes, watching the value of their stocks, their pensions, their 401(k)s. All are worth less today than they were even a few weeks ago. So the American people do not need a tutorial on whether things are tough out there. They are living it and their families are and they want to know whether their Government is doing anything about it to make a difference.

Income is stagnant, and for many people it is falling at precisely the time Americans are experiencing increasing costs in their daily lives. The source of wealth creation in this country has been damaged badly. Housing, which is a source of great wealth creation for many people, is losing value. Stocks, we know, have lost value. Bonds are losing value. These are the items upon which many Americans, through mutual funds and other vehicles, are able to increase their wealth, increase their security, prepare for their retirement, assist their children to achieve a higher education and to lead decent lives with a degree of happiness and hope that Americans ought to expect, living in this great country of ours. But all these items have been badly damaged over the last number of weeks and compound that loss of wealth creation with the fact that gasoline prices are going up, food costs are going up, health care costs are going up, and the cost of an education is going up. At the very time the source of wealth creation is going down, the cost of living is rising.

Unemployment numbers are also worrisome. In the month of May, we saw a one-half of 1 percent increase in unemployment. That is the largest single monthly increase in unemployment in 22 years in our Nation.

The root cause of all this--again, you don't need to know all this because you have been feeling it--the root cause of all this is the virtual collapse of the housing market that, in my view, did not have to happen. This did not have to occur. This is not a natural disaster. It is not a hurricane or a cyclone or a snowstorm. This is a problem that was created because the people responsible for being the cops over these institutions were not doing their job. As a result, we are in the mess we are in today.

I do not want to oversimplify it, but virtually that is what happened. The collapse was caused by what the Secretary of the Treasury has described as ``bad lending practices'' that were at best ignored and, in crucial respects, knowingly tolerated, if not encouraged, by Government officials over the last number of years. As a result, every single day in this country, Madam President, 8,000 to 9,000 of our fellow countrymen are entering into foreclosure. Home prices nationwide have dropped by the largest and most precipitous amounts since the Great Depression back in the 1930s. Tens of millions of Americans have watched their retirement savings, their pension funds, and the value of their homes fall by alarming amounts.

Madam President, I want to remind my colleagues that this legislation has proven time and time again to enjoy strong bipartisan support. Again, without the work of my partner in all of this, Senator Shelby, we wouldn't have arrived at that remarkable result. But my colleagues who have been with us on all of this, those who have added their ideas to this legislation, who have brought thoughtful proposals and added comments as well as specific ideas, deserve a great deal of credit for this as well.

Shortly before we left for our July recess, this piece of legislation passed this Chamber by a vote of 79 to 16. Yesterday, in the House, the bill received a bipartisan vote of 272 to 152. It is time to take up this bill one last time and send it to the President for his signature.

Let me review for my colleagues, if I may, exactly what it is we are working so hard to achieve. The bill we are about to adopt, and that we have worked on for weeks and months, has a number of key elements, all of which have been supported by the strong bipartisan votes in this body. First, we have the HOPE for Homeowners Act, which we are told will help somewhere between 400,000 to in excess of 500,000 Americans keep their homes and avoid going into foreclosure.

My hope, Madam President, is that number will actually be larger than that. That is a low estimate but certainly an important one. These families were simply seeking the American dream of home ownership. Sadly, in case after case after case, they were led astray. They were steered into mortgages they couldn't afford, and the people who steered them into those mortgages knew it because they were going to make their money quickly, and then they were going to sell the mortgage, move on, and never be accountable. In my view, these people should be going to prison for what they did.

I know people say that is a harsh conclusion, but to knowingly lure someone into a financial arrangement you know they could never afford, and to know full well they would end up defaulting on or falling behind, to me, that behavior is reprehensible and people ought to be held accountable. I am speaking of those who knowingly engaged in a practice that caused so much harm in our country. These are cases where often the mortgage brokers and loan officers pretended to be trusted financial advisers but were exactly the opposite. They had no intention and were doing nothing when it came to advising and providing help to these borrowers at all.

In fact, we now know, according to the Wall Street Journal, over 60 percent of the people who were talked into subprime loans actually could have qualified for a conventional mortgage at far lower cost to them than what a subprime mortgage cost. Sixty percent of these people were lured into that category by people who knew they had an opportunity to qualify for something that would have cost them far less than they ended up paying.

Anyway, this part of our HOPE for Homeowners Act is a voluntary program that will help save these homes by forcing the lenders who chose to participate to take some losses. These are not bailouts. The borrowers will have to pledge at least 50 percent of all new equity and future appreciation in order to get the benefit of a new reduced mortgage at a fixed rate that they can afford to pay. So the lender takes a haircut. They are not going to get what they thought they were going to get, but they are not going to get zero; and the borrower gets to stay in his or her home. They are going to end up paying that insurance and also contributing a part of the equity that will increase over the years to compensate for this program.

There are many protections built into this program. Only homeowners will qualify; no speculators, only homeowners. No investors or speculators will be allowed to participate. Borrowers will have to show they cannot afford their current mortgages, and all loans will be underwritten at a level the borrower can afford to pay. New loans will be at 30-year fixed rate mortgages.

All of this is done at no cost to the taxpayer. In fact, over the next 10 years, the Congressional Budget Office tells us that the program will actually raise some $250 million for the Treasury of the United States. This provision, combined with the government-sponsored enterprises--Fannie Mae, Freddie Mac, the home loan banks--regulatory reform of this bill, passed the Banking Committee 19 to 2, as I mentioned earlier.

Now, let me put to rest, if I can, an issue that has been raised. I have just described what this will do for that borrower who is with that very distressed mortgage. I can hear someone out there listening to these remarks and saying: Well, Senator, I live next door, and I have a mortgage I would like to get reduced as well. Now, I am not at risk of losing my home because I have my job and, frankly, I got a mortgage at a time when my broker and my banker worked out an arrangement that I could afford to pay. But why is that neighbor of mine getting this deal and I am not? Is that fair?

That is a good question. Let me say to you, as a borrower, first of all, I want to keep that borrower, if I can, in a home. If you are in a similar problem, we want to do what we can to help you. But you don't want that neighbor of yours to go into foreclosure. If your neighbor goes into foreclosure, then the value of your home that day begins to decline dramatically. The last thing any neighbors want on a block is foreclosed properties. So for every 8,000 or 9,000 people who go into foreclosure today, as they will, there are 16,000 people who live next door to that foreclosed property. And when the value of

properties go down in a neighborhood, crime rates go up, and it just spirals further and further down.

So I hear what you are saying. But if you think carefully about how this actually helps you as well, by keeping that homeowner in that house, keeping up the value of your property, then everyone benefits. So to those out there who wonder why everyone is not going to get a new mortgage at a rate they can afford, the value of this program is to try to put a tourniquet, if you will, on the hemorrhaging that is going on. There are 1.5 million people who have lost their homes in the last year. It is predicted by some--Credit Suisse being one--that one out of every eight homes, if we don't act, will end up in foreclosure in the next 5 years. Obviously, that is an intolerable situation in our country.

So this legislation is designed to provide hope not only for the homeowners but hope for the neighborhoods and communities being so adversely affected by this present problem. We desperately need this legislation. And as I have said repeatedly, every day we wait, some 8,000 to 9,000 foreclosures are filed. In fact, the delays we have suffered over the last number of days have caused an awful lot of people whom we might have been able to help to find themselves without a home.

Remember, these aren't just numbers. I have been citing numbers to you--a million and a half, 8,000 to 9,000, and how this program would work. But for every one of these numbers there is a family. Just imagine tonight that you had to go home and tell your husband or your wife or your children: We are no longer going to live here. We can't afford to stay here. This has been our home, but we have to find some other place to live. I don't know of anyone who would like to come home carrying that message because someone lured them into a mortgage knowing full well they could never afford to pay the fully indexed price.

These numbers don't speak about the human tragedy and the cost beyond the financial implications. So the importance of this legislation goes to the heart of who we are as a people, that sense of optimism and confidence. That fulfillment of a dream--of owning a home and raising a family, living in a quiet, safe neighborhood--for many people is no longer going to be there because these foreclosures are occurring at such a rapid rate around our country.

In late June of this year, Census reported that the home ownership rate, after reaching an all-time high in 2005, has fallen to a little over 67 percent, the sharpest annual decline in 20 years. According to the New York Times, minorities, who are disproportionately likely to get subprime loans, are suffering especially badly. That is why this legislation is widely supported by community and civil rights groups, financial institutions, and others. They see a generation of wealth being lost as a result of this foreclosure crisis.

The Senate expressed its strong bipartisan support of the HOPE for Homeowners Act when it defeated an amendment that was offered to strip out this program entirely. To the credit of my colleagues, Democrats and Republicans, we voted 69 to 21 to keep this program a part of this bill.

I want to make people understand something. There is no miracle here. I am not suggesting to you that this is going to work perfectly. It is our best judgment that this voluntary program could make a difference, and my hope is it will.

The second part of the bill, Madam President, includes the FHA Modernization Act. This passed early in April of this year as part of the Foreclosure Prevention Act by a vote of 84 to 12. The provisions in the current bill are identical to that legislation that I authored earlier this year, with the exception that the loan limits have been increased in high-cost areas to a maximum of $625,000.

As the administration has repeatedly said, the modernization of the Federal Housing Administration will put it in a better position to keep future borrowers away from abusive subprime loans.

Thirdly, this legislation creates a strong, effective, world-class regulator for the housing government-sponsored enterprises--Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. These entities have kept the housing and conforming mortgage markets going while other capital markets have literally frozen. We need to make sure these crucial market players are appropriately capitalized, well regulated, and properly supervised so the American people can continue to depend on them to ensure that affordable mortgages will always be available. Recent losses at Fannie Mae and Freddie Mac speak to the urgency of this need, and the legislation before us accomplishes that goal.

In addition to the government-sponsored enterprise portion of this bill, we have created a new permanent affordable housing fund that will help finance the construction and preservation of affordable homes and apartments across this Nation. Again, the need for this is growing, especially as the foreclosure crisis is pushing more and more families into rental housing. Again, the Senate spoke forcefully in support of this program when an amendment was offered by a Senator in this body to strike that entire program. My colleagues, again Democrats and Republicans, voted 77 to 11 to keep this permanent affordable housing program.

The bill also includes $3.9 billion for community development block grant funds to help communities across the Nation revitalize neighborhoods that have been devastated by foreclosures. This provision has strong support from the Nation's mayors, community groups, religious organizations, housing groups, and civil rights organizations as well. Unfortunately, we can't stop every foreclosure, but these funds will help our communities deal with the fallout of this terrible problem and help stabilize and renew our hardest hit communities.

There are important sections of the legislation that help our Nation's veterans find and keep housing and provide them with housing counseling. We increase housing counseling money in this bill so we can help people avoid the scourge and trauma of losing their homes to foreclosure.

There are a number of important tax provisions, and I want to commend my friend and colleague from Montana, Max Baucus, and Senator Grassley of Iowa. The Finance Committee did a terrific job with this bill. They got rid of some onerous, and I think wrong, tax provisions that had been adopted earlier and included some wonderful provisions to help first-time home buyers, as well as to provide some assistance in the area of encouraging additional investments in our housing areas.

So I want to commend Max Baucus and Chuck Grassley and members of the Finance Committee for the additions they have added to this bill that are going to make a significant difference.

Finally, the legislation includes important standby authority, which was requested by the Secretary of the Treasury, Hank Paulson. He worked all weekend, two weekends ago, with various other people to do what they could to figure out how not to lose the major investments in our government-sponsored enterprises, and he came up with this idea of standby authority. Now, it is unprecedented the authority he is asking for, but Hank Paulson impresses me as someone who has thought about this. He has spent a lifetime in the private sector and knows and understands these issues pretty well. And I know for a fact that he reached out to a lot of other people in the country as well, not of his own political persuasion but people he respects, and listened to them as they crafted this standby authority.

My colleagues have raised some very good questions about it. We had a long, almost 5-hour hearing on the Banking Committee last week where Hank Paulson and Ben Bernanke, the chairman of the Federal Reserve, and Christopher Cox of the SEC, sat there for 4\1/2\ hours and answered questions from 22 members of the Banking Committee about this proposal. And there are legitimate issues about it.

I see my friend from New Mexico here, the former chairman of the Budget Committee, and we asked questions that he would have asked in that committee, and I think we answered them as well as we could.

But I think Hank Paulson has it about right. This authority is going to be critical if we are going to encourage people to stay involved in this critically important area of liquidity to the

housing market. So I know my colleagues are concerned about this 18- month proposal, and that is how long it will last, but we will watch it carefully. Any authority that he would seek would be subject, of course, to the debt ceiling limit, which the Congress can impose at any point to slow this down. But the idea that the authority is there will give us, I think, the needed security that many global investors--and I want to point out they are global investors these institutions need in order to stabilize them at a critical time when there are significant jitters about whether these institutions can survive.

So, Madam President, this provision is one that was added by the Secretary of the Treasury, added by the administration, but Senator Shelby and I believed it was worthy of inclusion in this bill, and that is why we included it.

In short, this is a good, balanced bill. In many ways it is almost landmark legislation. It has taken a long time to get here and unfortunately it took some bad news for us to build the support this bill needed. But we are where we are.

This bill is going to make a difference almost immediately. In fact, we are seeing a difference already in the markets around the country-- and around the world, for that matter. This bill has very broad support, including from the Conference of Mayors, the League of Cities, the Mortgage Insurance Companies of America, the Leadership Conference on Civil Rights, the Mortgage Bankers Association of America, the Consumer Federation of America, the National Association of Homebuilders, NAACP, ACORN, the Financial Services Roundtable, and numerous other business, consumer, and civil rights organizations. In fact, I ask unanimous consent that a long list of these organizations be printed in the Record for my colleagues.

Madam President, I point this out because, as my colleagues will tell you, oftentimes we have one group of people for something and not another. But when you get the Financial Services Roundtable, the NAACP, the Consumer Federation of America, the League of Cities--you get some idea of what we have been able to put together, Senator Shelby and I have, with this bill.

Is this a bill Richard Shelby would write on his own? No. Is this one I would write on my own? Absolutely not. We do not do business like that here. There are 100 of us here, and we try to work together to fashion ideas that make sense, and that is what we have done with this critically important legislation.

I thank Senator Shelby. I thank my colleagues, my Democratic colleagues on the Banking Committee--Jack Reed, Chuck Schumer, Tim Johnson, a long list of people who made a significant contribution to this bill. I thank my Republican colleagues on the committee as well; 8 out of 10 of my Republican colleagues on that committee have supported this effort and stayed with us through this long, arduous process, a process that did not have to last this long and should not have to last this long over the next several days. We could pass this bill in the next hour and send it to the President for his signature this afternoon. That is the kind of news I think the world is waiting for, both at home and around the globe--that the American Congress, Democrats and Republicans, contrary to the opinion people have of us, can actually sit down and work together and produce something for the American people.

That is what we have done with this bill. I thank my colleagues for it and I urge the adoption of this legislation when the moment occurs.

I yield the floor.

I thank the Senator very much.

Mr. President, I have listened for the past 20 minutes or so to the narrative on the floor of the Senate. My colleague from Idaho and I have introduced legislation last year dealing with expanding production in the Eastern Gulf of Mexico and in Cuban waters. We do not disagree on the issue of whether we should expand production in this region. In fact, we agree on that issue. But I have heard several of my colleagues come to the floor to create false choices this afternoon, and I want to talk about those false choices.

We are witnessing a time when it is very hard for people to figure out how to scrape enough money together to put $70 worth of gas in their tank when it is near ``e'' on the gauge. It is fascinating and very disappointing to me how it's possible to fill your farm tank in order to harvest your crop, how an airliner is going to be able to afford fuel, or how is a family going to be able to afford enough money to put gas in their tank to go to work. These decisions are being made at a time when we face oil prices bouncing between $120 and $140 a barrel and gasoline at $4, $4.50 a gallon. When that ought to invoke and spark cooperation on the floor of the Senate, there is none.

My colleagues come to the floor of the Senate and say: Let's open up the entire Outer Continental Shelf. The Energy Information Administration carried out an assessment that shows what production would look like without lifting the moratorium and with lifting the moratorium. What it shows is that we get some extra production in the year 2020. I understand talking about next week, next decade. What is the impact going to be to families, to truckers, to farmers, to airlines, and others if someone comes out here and says: You know what, we have a real serious problem right now, but here is a solution for 2020.

Sign me up for the solution in the long term, although I might have a different approach to it. I hope by 2020 we are not quite as addicted to oil, particularly foreign oil from the Saudis, the Kuwaitis, Iraqis, or Venezuelans. Maybe we can shed the some of that addiction in 10 years. Maybe that ought to be our strategy. Maybe we ought to do game changing. The way to do away with our addiction is not to do more of the same so that we are still addicted. That makes precious little sense to me.

I will be happy to yield.

Mr. President, it appears a Federal agency has arisen from the dead. Good for the CFTC. I have been talking a long while about the CFTC being dead from the neck up. This is, after all, the regulatory agency that is supposed to wear the striped shirts, blow the whistle, and call the fouls.

This apparently is manipulation of the market. We are talking about manipulation. Good for them, if they have risen from the dead, if they are taking action against someone manipulating the marketplace.

The acting CFTC Chairman, whom the Senator from Illinois described, spent the last seven months saying there is no problem with the marketplace, it is working fine. The doubling of the price of oil and gas in the past 12 to 14 months has been because of supply and demand, he says. About a month ago, the acting Chairman had an epiphany. He must have had a good night's sleep, woke up from his dream saying: OK, I have been saying supply and demand justifies the doubling in price, but, in fact, we have been doing an investigation for seven months.

So which is it? Here is what it is. In the year 2000, 37 percent of the trades in the oil futures market were speculation trades, having nothing to do with hedging a physical product between consumers and producers; 37 percent of the trades by speculators. Today 71 percent of the trades are by speculators. They don't have any interest in buying oil, taking delivery of oil, carrying a 5-gallon can of oil, or putting a quart of oil in their car. They don't have the foggiest interest in oil. They have interest in buying and selling contracts and making big profits. They have taken over this marketplace and broken the market.

The proposition on the floor of the Senate is to try to wring out this excessive, relentless speculation in this market. My colleagues come to the floor of the Senate, and they have developed another narrative of more

drilling because they don't want to tackle this issue of speculation. I said before, 47 Members of the Senate in the minority have all indicated, in one form or another, that speculation is a problem. If you believe that, help us get this bill to the President. Yet, they come to the floor of the Senate and say we need more drilling.

As I described in the year 2020, we will have more to bring on more supply. I don't disagree with that point. Let's talk about it; offer some amendments. In fact, the majority leader has offered to the minority to bring your amendment to the floor. We will have a vote on it.

But what about next month? What about 6 months from now? How about let's do some things that are game changing in this country? How about the next decade? Between now and then, let's work to change the game.

I said two days ago that, in the 1960s, John F. Kennedy did not say: I would like to have us try to go to the Moon. I think we should think about going to the Moon. I think we should make an effort to go to the Moon. He didn't say that. He said by the end of the decade, we are going to put a man on the Moon, and we did just that.

The plan of all of those who have come to the floor of the Senate diminishing this legislation, degrading this legislation, saying we shouldn't deal with speculation and getting this market right. We shouldn't spend time on that. Let's instead focus on drilling. If that is the only thing they focus on, then that is what I call a yesterday forever strategy. If you want to wake up 10 years from now and keep the same position, good for you. I don't.

I think what we ought to do is this: Let's at least address something that has broken the marketplace and has doubled the price of oil and gas in the last year, something that experts have come to the Congress to testify about and some have said up to 40 percent of the current price of oil is not and cannot be justified by the fundamentals of supply and demand. It is because speculators have taken over this marketplace.

Don't take it from me. Take it from the CEO of Royal Dutch Shell. Here is what he said in April:

The [oil] fundamentals are no problem. They are the same as

they were when oil was selling for $60 a barrel.

If that is the case, what is the problem? The problem is, as I described in the chart, this market has been taken over by the speculators.

My colleague comes and says: NYMEX and ICE, describes all that is going on, what an aggressive regulator we have. You know what, this regulator has been sending out no action letters. Isn't that a wonderful thing to perfectly describe a regulatory agency that wants to take no action for anything? It said: Let me be willfully blind and not see what is happening. By the way, because of these no action letters, I can't see what is happening in the over-the-counter market, the intercontinental exchange, and all of the unregulated trades because I have decided I don't want to see it. Then let me go to the Congress and testify, and with a straight face--I am sure suppressing a grin--at least with a straight face say, I don't see anything that represents anything other than supply and demand.

My question to them was: I understand you don't see that. Is it the case you see very little because you have chosen, through no action letters and other limitations, to decide you don't want to see it all?

We brought a bill to the floor of the Senate that says we have a lot of problems. First and foremost, let's set this market straight, putting pressure downward and preserving the oil futures market for that which was intended in 1936. It was for the hedging of a physical product between consumers and producers. That is what it was for. It has now been taken over by the carnival of greed. Speculators control these markets, have driven up the price despite the fact there has been no change in the fundamentals.

My colleagues on the other side of the aisle say drill. I have had a bill in for a year and a half to say drill more in the eastern Gulf of Mexico and allow U.S. companies to produce in Cuban waters. I am also one of the four Senators who opened up lease 181 in the Gulf of Mexico for drilling. I support that. I am fine with drilling. But if drilling is your only answer, boy, that, in my judgment, is a pretty pathetic future. Here is what Boone Pickens says. Boone Pickens and I have disagreed on a lot of things, but he came to Congress this week:

I've been an oil man all my life, but this is one emergency

we can't drill our way out of. But if we can create a new

renewable energy network, we can break our addiction to

foreign oil.

Think of this. What if between now and 2020, if we start now we can actually have a new barrel of oil by 2020, and you say to somebody down the block: Cheer up, things are going to be better in 12 years--that is one position to take, I guess.

What if the other position is as Mr. Pickens suggests? What if we did this: We are going to produce oil. We want to be less dependent, however, on the Saudis, Kuwaitis, Venezuela, and so on, because if we didn't get their oil for some reason, we would be flat on our back as an economy. This makes our country vulnerable. We have to be less dependent on them. We are going to use oil we produce.

How about if we decide to do something dramatically different? How about in the wind belt from Texas to North Dakota where we produce a massive quantity of wind and have the capability of taking the energy from the wind and producing electricity? And how about in the Sun Belt where we move dramatically to solar energy and create a superhighway of transmission lines to be able to move that energy all around this country? How about if we do that for a decade and then say: You know what, all that natural gas we are using for coal-fired generating plants, we can displace a fair amount of that with wind and solar and a superhighway of transmission lines, and we can dramatically change America's energy future.

We need more conservation and energy efficiency and dramatic increases in renewables. There are so many exciting things we can do to change America's future. Yet, my colleagues come to the floor of the Senate for a different pursue. They plant their flag, and say: We want our future to be the same as our past, and every 10 or 15 years, they will be content to come here and say: Yes, we have an urgent problem and what we ought to do is more of the same. That is not a future that makes much sense to us.

Again, coming back to this issue, we are saying with this legislation on the floor of the Senate requires that we do first things first. We should do a lot of things, we agree with that. Senator Bingaman is introducing a bill I fully support as a cosponsor. It deals with a whole range of other issues with which we have to deal. First things first. At least let's address this issue of excess speculation that has broken the commodity futures market for oil.

To my colleagues who say, you know what, this is all about drilling, I say to them: Come to the floor of the Senate and tell me what has happened in the last year, what has happened in supply and demand that justifies a doubling of the price of oil. They will not come and cannot come because they don't have an answer to that.

I can give them a partial answer. If anything would have been expected to happen to the price of oil and gas, it should have gone down because we have driven nearly 6 billion fewer miles in America than we did in the previous 6 months. So we are using less energy and less gasoline. So one would expect, if you are using less, you would put some downward pressure on prices. But that is not the case. Prices go up like a Roman candle, double in a year.

The only conceivable reason given us is by the experts who don't have a vested interest in this issue of the oil futures markets, and they say that the market is now broken. Fidel Gheit has been an Oppenheimer analyst for 30, 35 years--the top energy analyst for Oppenheimer--and he says: Look, this is like a casino, open 24/7, like a highway with no speed limit, he said, and no cops, and everybody is going 120 miles an hour.

Is that really what we are willing to allow an oil futures market to be, if it drives up the cost of oil and gas, doubles it in a year, and imposes this kind of burden and financial penalty on every American family and every American business; imposes this kind of burden on some of our major industries, such as airlines and trucking

companies and farmers and others? That is a back breaker. Are we really willing to stand on the floor of the Senate and say: Yeah, that is OK. It is OK. Let's do something that will increase the production of a barrel of oil in 2020.

That seems to me to be a false choice that we are being offered. I think it was Will Rogers who once said:

It is not what he knows that bothers me, it's what he says

he knows for sure that just ain't so.

I think about that as I hear this debate on the floor of the Senate; all this assertiveness about one answer. Do something now so we have more oil in 2020. What about tomorrow, next week, or next month? What do you want to do about that? What about a market that is broken; do you ever care about fixing it? What about the fact that investment banks and hedge funds have marched right directly into the oil futures market?

The Wall Street Journal writes about investment banks that are actually purchasing oil storage so they can purchase oil and keep it off the market. Pension funds--CalPERS and others--are moving money into the oil futures market as if it is just another share of stock. That is just pure speculation. That massive quantity of money flooding into this market has dramatically changed the market.

Now, I have had a lot of people come and see me about these issues because some are very upset with what we are trying to do. They like the speculation in the marketplace because a lot of people made a lot of money by speculating in this marketplace. I think this marketplace needs to exist. You have to have a market that represents a place for legitimate hedging of a physical product. But when the market is broken, you also have to have a regulator with the strength, the capability, and the willingness to stand up and do what is necessary to fix it.

The current regulator at the Commodity Futures Trading Commission has not done that, has not demonstrated a willingness to do that, and it seems to me Congress must. Our legislation does a couple of things. It says to the Commodity Futures Trading Commission: You determine who is trading out there and distinguish between them. Those who are engaged in legitimate hedging of a physical product between consumers and producers, that is fine. That is what the market was created for. All others are pure speculators, and we establish strong position limits on those speculators to try to shut down that speculation, that excess speculation in the marketplace. Relatively simple. But it does cause a firestorm of protest by those who are making a lot of money having broken this marketplace.

I suppose there is room--I shouldn't say I suppose. There is room for disagreement. I respect those who disagree. But it seems to me that this country will pay a very high price if we don't understand the need to cooperate. There is no Republican or Democrat label on the fuel gauge on a car. There is just ``full'' and ``empty.'' And all too often these days it is empty because of what has happened to prices. I think the American people expect and demand we do something that addresses these issues.

The first step--the first step and most important step, in my judgment--is to set this market straight and to distinguish between excess speculation and legitimate hedging and establish position limits in order to put downward pressure on gas and oil prices. We are told by some very distinguished people who have testified before our committees that we could see as much as a 40-percent decrease in the price of oil and gas just by wringing the oil speculators out of the futures market.

If we did that, it would be a good thing, a good thing for our country. Then, yes, we have much yet to do. I don't disagree at all with that, and some of it is drilling. But as I said before, if our future is just to continue down that road, without understanding the need for a game-changing, moon-shot plan to make us less dependent on the Saudis, less dependent on foreign oil, this country will have missed an enormous opportunity and put its future in jeopardy.

I remain hopeful. It is now Thursday, and we have been largely at parade rest most of the week. The minority has required us, in effect, to spend 30 hours postcloture--30 hours postcloture--doing nothing, which makes precious little sense. I think the country senses some emergency here, but some of my colleagues in Congress sense no such emergency. So we spend 30 hours largely doing nothing, and then we will come to a cloture vote to shut off debate to see if we can perhaps get to a vote to end this relentless speculation.

My hope is we will have sufficient votes to do that.

Mr. President, how much time have I consumed?

Mr. President, I believe a couple of my colleagues are coming, so I will reserve the remainder of my time.

Mr. President, I ask unanimous consent to have printed in the Record for Senator Durbin a story that he described on the floor titled ``Traders Manipulated Oil Prices.''

Mr. President, I yield the floor, and I suggest the absence of a quorum.

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

Mr. President, I believe the majority leader is coming over, but I would like to speak until he arrives, at which point I will continue later.

Mr. President, we had a hearing yesterday before the Senate Appropriations Committee that I had requested. That followed a hearing that I had conducted on the Democratic policy committee, the 17th hearing I have conducted and chaired, looking into the issue of contractor irregularities and waste, fraud, and abuse involving contractors with respect to the war in Iraq.

I want to talk just for a moment about what is happening with respect to these contractors.

We are shoveling money out the door. Three-quarters of $1 trillion has been spent, and much of it ends up in the pockets of contractors, and much of the work by contractors not only fleeces the American taxpayer, but it represents, I think, the greatest waste, fraud, and abuse in the history of this country. I think it is also the case that it endangers the lives of American soldiers.

So what I would like to do for a moment is to describe the hearing that I held recently and show a photograph of Cheryl Harris and her son, SSG Ryan Maseth.

Ryan Maseth was an Army Ranger and a Green Beret. He was killed in Iraq. He wasn't killed by an insurgent or killed by enemy fire. He was killed because he was electrocuted while he was taking a shower at the Army base. He was electrocuted while taking a shower.

It turns out the contractor that wired that particular area didn't know how to wire and didn't properly attach ground wires. So when this Army Ranger reached up and touched a pipe, he was electrocuted and died.

The Army initially told Cheryl they thought perhaps her son had taken an electrical appliance into the shower and, therefore, was electrocuted. Not true. It is not true. Halliburton--or Kellogg, Brown & Root, its former subsidiary--had been given the contract for wiring these facilities at Army bases and were hiring, among others, third- country nationals who had very little electrical experience. Two people who were electricians and working there in Iraq and Afghanistan for Kellogg, Brown & Root came and testified and said the work done by KBR was the most shoddy, unbelievably sloppy work.

Thirteen people have been electrocuted in Iraq as a result of these kinds of things. So I don't understand the recent order by the Defense Contract Management Agency, and announced by General Petraeus, that the Pentagon is going to have the same contractor that caused some of these problems--the contractor that has in a number of instances failed to fix faulty wiring--do a comprehensive review of these problems throughout U.S. military installations in Iraq. It makes precious little sense to me that would be the case.

This is Larraine McGee. Her son was killed as well. Larraine McGee's son was killed while power washing a humvee. He was killed not by an enemy combatant but power washing a humvee vehicle. Again, improper wiring and grounding meant this soldier was electrocuted.

How do these things go unfixed? What kind of work is done by contractors, and who cares about all this? We had testimony from Debbie Crawford, who was an electrician who worked for the contractor in Iraq. She described work by people who were not qualified. She described KBR supervisors who said: Well, this is not the United States. There is no OSHA here.

Mr. Jeffrey Bliss, an electrician for KBR, said there was pervasive carelessness and disregard for quality electrical work at Kellogg, Brown & Root.

Again, I say to you that we are told, with the news of all of these problems, with 13 people, 11 of them soldiers, being electrocuted in Iraq because of shoddy wiring by contractors, the Pentagon has asked the same contractor to go out and review the work. It is nearly unbelievable to me.

Mr. President, there are so many problems in Iraq contracting that I am going to try to come tomorrow and talk about the 17 hearings I have held and how much money the American taxpayers have been charged for such shoddy work. It is not just fleecing the American taxpayers, it is also injuring American soldiers when we have contractors not doing the job for which they were contracted to do.

Again, this is a photograph of Larraine McGee, who is Sergeant Everett's mother, and Sergeant Everett, as I indicated, was electrocuted as a result of improper grounding. Ms. McGee learned from a newspaper that 10 other soldiers were electrocuted in Iraq due to faulty electrical grounding and faulty wiring. So she came to Congress pleading for help, pleading that somebody do something. She said:

Anger has now taken over my grief. I plead with you to do

something to bring an end to this unnecessary cause of death

to our soldiers. They should not have to worry about stepping

into a shower or using a power washer in the safety of an

established base.

As I indicated, the Pentagon ordered there be a comprehensive inspection of electrical installations at the Army bases in Iraq, but it hired the same company to do the inspections, the same company who had hired two electricians who came to this Congress to say the electrical work was unbelievably shoddy and done, in some cases, by people who didn't have the foggiest idea what they were doing.

I sent a letter to General Petraeus last Friday, signed by Senators Casey, Cantwell, Klobuchar, and Whitehouse, urging him to replace KBR in these inspections. The inspections should be done by objective, qualified electricians. KBR has shown itself to be incapable of fixing electrical hazards that had been known for years. It is an insult to the memory of these soldiers that KBR has now been assigned to conduct the inspections.

There is more to this story. I will, tomorrow, visit about a wider range of these issues.

I yield the floor.

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

Mr. President, might I inquire of the Chair: It is my understanding now that the Republicans will have 30 minutes; is that correct?

All right. Mr. President, I am going to go ahead and take the first 15 minutes. Then, it is my understanding that the Senator from Georgia, Mr. Chambliss, wants 5 minutes, and Senator Craig wants 10 minutes after that. I would like to lock that in with a UC.

Mr. President, I would like to draw the Senate's attention to an editorial in today's Wall Street Journal and particularly the first sentence. It says:

Nancy Pelosi, Harry Reid, and other liberal leaders on

Capitol Hill are gripped by cold-sweat terror. If they permit

a vote on offshore drilling, they know they will lose. . . .

The editorial goes on to point out what the Democrats' plan of action is for this problem: to cut off debate. We have been in session this week. We have held one vote. We are considering a bill relating to energy, but the Democrats are not allowing us to offer any amendments to find new sources of energy, when the editorial points out that at least 65 percent of America's recoverable oil and 40 percent of America's natural gas is under moratorium.

Mr. President, I ask unanimous consent that at the end of my remarks the editorial be printed in its entirety in the Record.

What they are talking about are those areas where we have huge supplies that we can access, except we cannot do it because there are moratoria, such as exists right now in terms of the Rocky Mountain oil shale, with 2 trillion barrels; the Outer Continental Shelf, for which 85 percent of the Outer Continental Shelf is under an order that the Democrats have on there, so we are not able to explore, to produce, to drill in those areas. You hear the argument quite often that there are 68 million acres that could be explored right now and they are not doing it. They are not doing it for one reason, and that is because there is no oil there.

Throughout this week I have heard a number of my Democratic colleagues come to the floor and express their support for increased drilling. Apparently, this has all been some kind of misunderstanding. I have taken their consistent votes against increasing domestic production as being against new drilling. If we all agreed that new domestic production is part of what we need to do, then let's get on with some votes and get them underway.

My Web site is epw.senate.gov. EPW stands for Environment and Public Works. What I have done is gone back and gotten all of the votes we have had that would cause us--allow us to expand our supply in America in areas such as this. Right now on party lines they have been killed-- killed by the Democratic Party. This is a problem. Somehow, the Democrats are trying to convince the American people that supply and demand is not alive and well in America. It is interesting that the other day in the newspaper, it was either an op-ed piece or it might have been on the editorial page of the Washington Post, they said even Congress is not going to be able to repeal the law of supply and demand.

The American people understand the need for new domestic production. Recent polling has shown 67 percent of the American people now support offshore drilling with only 18 percent opposed. Sixty-four percent believe that if offshore drilling is allowed, gas prices will go down. Well, that is a natural conclusion you can come to.

Another poll found that 81 percent of Americans support greater use of domestic energy sources. Both papers in my home State of Oklahoma have weighed in on this issue with recent editorials. The Tulsa World and the Oklahoman have weighed in, pointing to how new production can be done in an environmental manner. The Tulsa World wrote:

President George W. Bush made the correct decision when he

lifted the White House's 18-year ban on offshore drilling . .

. No one wants the environment damaged. This work could be

done safely. It could be done over the long term only if

Congress had the good sense to act.

The Oklahoman wrote--this is in Oklahoma City:

Democrats reacted to President Bush's lifting of an

executive ban on offshore drilling by vowing to keep in place

congressional prohibitions dating to the 1980s. The debate

over energy policy just keeps getting better and better. For

years the Democratic Party has blocked efforts to

significantly increase production of America's sources of

offshore oil and natural gas, citing potential dangers to

beaches in California and Florida and dismissing any new oil

finds as too far in the future to help U.S. energy needs.

Both arguments have less persuasive steam with the current

oil prices. Certainly, if drilling offshore had gotten

underway a decade ago or more--instead of being stymied--

Americans know it would be online now and helping to absorb

some of the current price increase.

This is the interesting thing about it. We know what is happening in Prudhoe Bay. We know what the reserves are in ANWR. We know we have a pipeline. If we had a pipeline filled and if the President--at that time Bill Clinton--had not vetoed the bill that would have allowed us to go into ANWR.

New domestic production should happen and can be done in an environmentally appropriate way. No country on Earth has exploration technology as advanced and environmentally sound as ours. I have to say also that we are the only country--I can't think of another country, and I hope if someone has the name of a country that would be an exception--there is not another country in the world that doesn't exploit their own resources. Certainly, these resources alone are enough to make us totally independent of any foreign importation of oil and the prices would come down.

I have highlighted some of the amounts of domestic reserves previously, but I think it is important to continue to point to the amount of reserves in the United States. There they are, right there, and we have actually enumerated them for the purposes of the Record.

The potential energy development from the Rocky Mountain oil shale is truly massive with reports estimating up to 2 trillion barrels, but once again, Democrats are blocking development. The Consolidated Appropriations Act last year established a 1-year moratorium on the necessary funding to complete the final regulations for commercial leasing of oil shale.

Look at the size of this. We are talking about not 10 billion barrels we would find in ANWR, not 14 billion barrels as we see on the Outer Continental Shelf, but 2 trillion barrels. Without congressional action, a 1-year delay could end up lasting much longer and, like the Outer Continental Shelf appropriations moratorium, continue year after year.

The RAND Corporation estimates that as many as 1.1 trillion barrels are recoverable and at prices as low as $35 to $48 a barrel within the first 12 years of commercial scale production. At current rates of consumption, 1.1 trillion barrels equals more than 145 years of domestic supply. This number would nearly double assuming the Department of Energy's estimate of nearly 2 trillion potentially recoverable barrels. Finally, development is ongoing in the Canadian oil sands where proven reserves are about 179 billion barrels. We need to continue to do that. Right now, they are in jeopardy. Congressman Waxman has put on a prohibition in the Department of Defense using oil from those oil sands. If anyone were tempted to try to expand that so that no one else in the country could use it, that would be devastating. So that effort could be underway as we speak.

In an effort to hide their true record of blocking access to America's own resources, the Democrats are engaged in a campaign of shifting blame, claiming there are 68 million acres in America where oil and gas companies have the right to drill but are not drilling. Some 44 percent of the leases that have been

issued are already producing oil and gas, and energy companies are in the process of exploring the remaining leases to determine the energy potential of those lands. Unfortunately, when you get out there and you explore and you try to determine how much potential production is there, there are some places in the United States and anywhere in the world where there simply isn't any oil. This is the problem they have. We need to open the other 85 percent that currently we are unable to access to allow us to go after it. Again, we are talking about some 14 billion barrels that are out there.

We are presently considering a bill to impose new rules on speculating, claiming that speculators have been driving the price of oil to record highs. Even if speculators are having a negative effect on the price of fuels, I am concerned that the wrong congressional action could actually exacerbate the problem. Rhetoric on the impact of speculators simply lays the groundwork to once again implement price controls. Looking back to the 1970s, we now know that price controls lead to shortages, rationing, and long lines at gas stations. Over the last few days, the name of Boone Pickens has been invoked many times. When asked what he thought about the speculation, he recently said that:

Speculation doesn't have anything to do with it. You have

85 million barrels of oil available in the world and the

demand is at 86.4. I don't think that guy over in China

paying $140 for oil is blaming Wall Street speculators for

what is happening to him. Everybody tries to place the blame.

And the blame is our own lack of leadership over the last 40

years on energy.

Now, I have a list of quotes I am going to actually, if there is a little bit of time--I don't have time to read them, but a list of quotes from people who are the knowledgeable people in this country such as Walter Williams, the economist for George Mason University:

Congressional attacks on speculation do not alter the oil

market's fundamental demand and supply conditions. What would

lower the long-term price of oil is for Congress to permit

exploration for the estimated billions upon billions of

barrels.

The International Energy Agency says that:

Blaming speculation is an easy solution which avoids taking

the necessary steps to improve supply-side access and

investment.

So I ask unanimous consent that this list of economists be listed, along with their statements concerning speculation, at the conclusion of my remarks.

Republicans have consistently tried to do something about the high prices. One of the things that people don't think about is if we had all of the production, all of the crude oil, we would still have to refine it to use it. We have a real refinery crisis in this country. Right now we are looking at a situation where we would not be able to refine it with the refining capability we have.

I introduced 3 years ago the Gas Price Act which is something that would work very well. It actually took these closed military installations that were BRAC closed--Base Realignment and Closing Commission-closed installations--and allowed the surrounding communities to apply for EDA grants so they would be able to attract refineries. This would be a good idea because for one thing, those closed bases, you would not have to actually have a cleanup to playground standards, so the Federal Government has saved a lot of money by doing this. I don't think there is any justification in the world for people to oppose such an effort.

I have also introduced my Drive America On Natural Gas Act. This is something that is very significant, because this is something that is part of T. Boone Pickens' ideas. Let's keep in mind Boone Pickens said we need to drill everywhere. We have to drill and we have to keep on drilling, but we also need to explore all kinds of renewables. His idea is to release some of the natural gas so we can use it for compressed natural gas. The price today in my State of Oklahoma for compressed natural gas is 90 cents a gallon. Ninety cents a gallon. In some places it is as high as $2. Nonetheless, it does show that it is out there.

There are certain obstacles to being able to do what needs to be done in allowing the conversions. One is we have to effect the regulations of the EPA and the other one is we have to give the same benefit to natural gas as we do to other renewables. If we were able to do that, it would open it up very rapidly. In fact, yesterday, the Republican leader offered a unanimous consent request that seven Republican energy amendments be considered in order for consideration in this legislation, and this was one of those.

I don't want to take up more time right now because I want to yield 5 minutes to the Senator from Georgia, but I will only say this: You can stand on the floor and say over and over and over to the American people that supply and demand doesn't work; you can say that Democrats are not opposed to increasing the supply. Yet if you go to the Web site I suggested--epw.senate.gov--we have looked at every vote that has taken place since the middle 1990s, and in every case, every time we tried to increase the supply of petroleum products for America, whether it is drilling on the Outer Continental Shelf, ANWR, Rocky Mountain oil shales, or preserving Canadian oil sands, the Democrats, to the very last one, have voted against it.

We have to increase supply. We have to keep saying it. People understand it. Even some people with basic educations know that supply and demand is alive and well in America. It is just that we have too much demand and not enough supply. We have to open it.

I yield the floor.

Exhibit 1

[From the Wall Street Journal, July 24, 2008]

Democrats Against Drilling

Nancy Pelosi, Harry Reid and other liberal leaders on

Capitol Hill are gripped by cold-sweat terror. If they permit

a vote on offshore drilling, they know they will lose when

Blue Dogs and oil-patch Democrats defect to the GOP position

of increasing domestic energy production. So the last

failsafe is to shut down Congress.

Majority Leader Reid has decided that deliberation is too

taxing for ``the world's greatest deliberative body.'' This

week he cut off serious energy amendments to his

antispeculation bill. Then Senate Appropriations baron Robert

Byrd abruptly canceled a bill markup planned for today where

Republicans intended to press the issue. Mr. Byrd's

counterpart in the House, David Obey, is enforcing a similar

lockdown. Speaker Pelosi says she won't allow even a debate

before Congress's August recess begins in eight days.

She and Mr. Reid are cornered by substance. The upward

pressure on oil prices is caused by rising world-wide

consumption and limited growth in supplies. Yet at least 65%

of America's undiscovered, recoverable oil, and 40% of its

natural gas, is hostage to the Congressional drilling

moratorium.

The Democratic leadership is trying to smother any

awareness of their responsibility for high prices. They are

also trying to quash a revolt among Democrats who realize

that the country is still dependent on fossil fuels, no

matter how loudly quasimystical environmentalists like Al

Gore claim otherwise.

Exhibit 2

Dems Cite Speculation Stats That Don't Match the Facts

Sen. Harry Reid (D-NV): ``Academics, economists say that

the costs of oil is 20% to 50% speculation.'' (Sen. Harry

Reid, Remarks on the Senate Floor, 07/22/08

``Academics and Economists'' Actually Say ``It's Not Speculation, It Is

Supply and Demand''

Warren Buffett: ``It's not speculation, it is supply and

demand. . . . We don't have excess capacity in the world

anymore, and that's what you're seeing in oil prices.''

(Warren Buffett, Chairman & CEO, Berkshire Hathaway, 6/25/08)

Walter Lukken, Chairman of the Commodity Futures Trading

Commission: ``We haven't evidence that speculators are

broadly driving these prices.'' (``Hitting Rock: Dems

Oblivious on Oil,'' Union Leader, 7/13/08)

Chairman Ben Bernanke: ``If financial speculation were

pushing all prices above the level consistent with the

fundamentals of supply and demand, we would expect

inventories of crude oil and petroleum products to increase

as supply rose and demand fell. But, in fact, available data

on oil inventories shows notable declines over the past

year.'' (Ben Bernanke, Chairman of the Federal Reserve, 7/15/

2008)

Craig Pirrong, Member of the CFTC Energy Markets Advisory

Committee: ``There's no evidence of speculative influence.

Speculators are not contributing to the demand for physical

oil as they almost always roll positions prior to delivery.''

(Craig Pirrong, Professor of Finance at the University Of

Houston, Member, CFTC Energy Markets Advisory Committee, 6/

24/08)

Walter Williams, Economist George Mason University:

``Congressional attacks on speculation do not alter the oil

market's fundamental demand and supply conditions. What

would lower the long-term price of oil is for Congress to

permit exploration for the estimated billions upon billions

of barrels of oil domestically available, not to mention the

estimated trillion-plus barrels of shale oil in Wyoming,

Colorado and Utah.'' (Williams, Walter E. ``Scapegoating

Speculators.'' The Washington Times 9 July 2008.) http:// www.washingtontimes.com/news/2008/jul/10/scapegoating- speculators/ Paul Krugman, New York Times Columnist: ``On any given day,

expectations determine the price; but the spot market also

has to clear, and the way this happens is that excess supply

must be added to physical stocks. Even with fairly inelastic

supply and demand, any large speculative deviation from the

``fundamental'' price should show up in a noticeable increase

in inventories.'' (Paul Krugman, New York Times columnist, 6/

28/08)

International Energy Agency: ``There is little evidence

that large investment flows into the futures market are

causing an imbalance between supply and demand, and are

therefore contributing to high oil prices . . . Blaming

speculation is an easy solution which avoids taking the

necessary steps to improve supply-side access and investment

or to implement measures to improve energy efficiency.''

(International Energy Agency, Medium-Term Oil Market Report,

July 2008)

Daniel Yergin, Chairman of Cambridge Energy Research

Associates: ``When an issue is this hot, it would be so much

easier if there was a single reason to blame . . . But

calling it speculation is way too simplistic.'' (Daniel

Yergin, Chairman, Cambridge Energy Research Associates)

John Chapman, American Enterprise Institute: ``The truth is

that increased speculation in oil futures is not a cause of

rising oil prices, but rather an effect of those prices,

which have skyrocketed due to growth in global demand,

geopolitical instability, and constricted supply in several

producing countries. (John Chapman, Researcher at the

American Enterprise Institute, 7/16/08)

I believe our side now has the next half hour. I yield myself 20 minutes and 10 minutes to the Senator from New Mexico, Mr. Bingaman.

I request the Chair to alert me when I am halfway through.

Mr. President, I rise to speak on two issues, both pending before us, both vitally important to the economy. One is energy, one is housing.

We all know the pain Americans experience. We all know the price of gasoline. In New York, people are already anticipating, with fear in their hearts, the price of home heating oil to heat their homes in winter. Everywhere else the costs of energy are driving prices higher, creating a middle-class squeeze.

We had a hearing at the Joint Economic Committee yesterday. Elizabeth Warren, a professor at Harvard, outlined that squeeze. The average middle-class person is hurting. They have built up a good life for themselves. Now they are hurting because, on the one hand, their income is not going up--productivity is but income is not--and at the same time their costs are going much higher than the rate of inflation. So they are caught in a vise--income declining, prices increasing.

This Friday night, there will be millions of Americans who, after dinner, husband and wife, will be sitting around the table talking about the things they care about, their children and their futures, their health. But probably the No. 1 topic will be, how the heck are we going to pay the bills.

Democrats are here to try and finally, after 7\1/2\ years of being dominated on the energy debate by oil, oil companies, oilmen in the White House, change the debate. The other side has a simple solution. It gets modified every couple of years, but it is basically the same. Do what big oil wants. When the price is low, give them subsidies. When the price is high, make sure they don't pay much in taxes. All throughout, focus our energy economy on oil, because that is what the big oil companies want.

Rex Tillerson, the head of ExxonMobil, came before the Judiciary Committee a year and a half ago and said: ExxonMobil does not believe in alternative energy. I guess if I were ExxonMobil, I wouldn't either. Because as demand goes up and supply stays relatively flat, the price goes up and the profits go up. I have been asking, what do the big oil companies do with their profits. A huge percentage goes not into new exploration. They say they want to explore, but a majority of the money, in some cases, and a plurality, in most, goes to buying back their stock to raise the share price for themselves and their shareholders. This idea that oil companies are eager to explore is belied when we look at their financial statements. They are buying back their stock. It doesn't create one drop of oil. For the limited number of people who have ExxonMobil stock, that is a godsend. For the rest of us, it squeezes us even more. Chevron does it. BP does it. They all do it, with billions and billions of dollars. I believe last year ExxonMobil took $29 billion to buy back their stock.

I challenge my colleagues on the other side of the aisle, if they are so eager for exploration, why aren't they putting that $29 billion into exploration? But they are not. Again, we have the answer from the other side: Big oil today, big oil forever.

The American people know we are not going to drill our way out of this crisis. Even if the oil companies wanted to--and statistics show they do not--we don't have enough oil to prevent the price from going up, because demand worldwide is dramatically increasing, in China, in India, in the Middle East. The number of new cars in China and India in a short while will exceed the total number of cars in America, in 10 years, 15 years. Imagine that, new cars in China and India competing with us to buy gasoline. Obviously, the price will go up.

When our majority leader repeats over and over that we have 3 percent of the reserves and 25 percent of the consumption, there is no way to reduce prices significantly in the long term other than to get off our dependency on oil. So drilling is not the answer. Yes, in certain places, it may help. We are not opposed to that. I proudly went to the Republican majority, got Democrats to vote for drilling in the gulf. But it is not going to solve our problem. It will ameliorate it a tiny little bit in certain places, if you drill in the gulf and places near refineries.

The answer is to ween our dependence from foreign oil and tell OPEC and Chavez in Venezuela and Iran to take a hike because we don't need them anymore. They can't have their hands around our necks any longer-- economically, politically, or geographically.

The good news is, we can do that. We can do that on both sides of supply and demand. That is what we Democrats are attempting to do. We are attempting to help get an electric car. Electric cars, no gasoline, will ride as smoothly and as well but much more cheaply than our present cars. They are not these little golf carts you drive around. You can have a big SUV with a battery that goes 250, 300 miles, same as a tank of gasoline, and drives with the same speed and the same power and the same torque. We are not too many years away from that, if we help create the battery. They have the battery. It just has to be mass produced. We need some research to get that done in a cheap enough way so that the price of cars stays the same while the price of fueling the cars goes down.

Senator Bingaman will be here shortly. He put one of my proposals in the Democratic proposal for housing conservation when you build. Forty percent of our energy is consumed not driving cars but cooling and heating homes, air conditioning and heating. If we were to adapt conservation measures, that could dramatically drop. One State has done it, California. California's energy consumption is lower than just about any other State, even though they are a car culture. Why? Because in 1978, under Governor Jerry Brown, whom many regarded as ``Governor Moonbeam,'' this was an excellent idea that has proven successful; they put conservation in building standards for homes and offices. Now, in terms of buildings, their per capita consumption of energy is about what Denmark's is. Why don't we do it nationwide?

Then there is alternative energy. There was an op-ed in the Washington Post by an oilman, someone I know named Jim Tisch, who said that now it is profitable to do wind power, solar power and other kinds of power and take our dependency off oil and gas.

We can both increase supply and decrease demand, reduce the price, if we embark now on a program of change. When we have tried to do this, our colleagues on the other side of the aisle have said no. Why? The big oil companies don't like it. Some of the big utilities don't like it. The big special interests don't like it. But they are doing great. It is the average middle-class person who needs the help.

The equation is simple. I will put it in stark terms, but I think it has to be put that way: Republicans, big oil, the past; Democrats, alternatives, the future. Let me repeat that. Republicans, big oil and the past; Democrats, alternatives and the future. Every American knows which side we want to be on.

I am sorry they have decided not to accept Majority Leader Reid's generous offer and take their proposal and our proposal and debate them. We will do that any day of the week. I am sure Senator Obama is eager to debate Senator McCain, who is following in the big oil footsteps of George Bush and Dick Cheney.

I thank the Chair.

I am sure he is eager to have that debate. When you ask people in polling, should we drill, they say sure. Then when you ask, can we drill our way of the problem, they know we can't. We are going to continue to push. I hope and pray we don't have to wait for the next President to do this. I would like to see it done now, because we have waited 7 years. We have had bills on the floor in the past: bills to raise mileage standards of cars, stopped by the auto companies; bills for alternative fuels, stopped by the oil companies; bills to make sure utilities are more efficient, stopped by the utilities. When the price was low, no one paid much attention. But now we are all paying the awful price. Let us change once and for all. There are short-term solutions, whether with the SPR or tamping down speculation. But the only long-term, real answer is to reduce our dependence on oil, move to alternatives and conserve more, consume more efficiently. I hope my colleagues will do that. I hope we will look forward to the future and not delay the future any longer and not look back at the past.

Housing

The other bill that is before us now and upon which we will vote shortly is the housing bill. I urge my colleagues to support it. Unlike the energy issue, I think we do have broad bipartisan support. I was delighted to hear yesterday that the President changed his view and will now support the bill Chairman Dodd and Congressman Frank have put together. I am very glad of that. It is a good bill. I have had some significant input into it, for which I thank both of them.

Housing is at the nub of the recession. Housing prices go down and people don't have the money to do other things. That hurts. Homes are foreclosed upon and neighborhoods suffer. Even if you keep your home and even if your housing price is flat, mortgage rates go up. Since so many people have adjustable rate mortgages, that hurts us as well. But housing has been the bull's-eye of the economic crisis. For too long, Washington has twiddled its thumbs, despite the efforts of those on our side who want to do something and who have smart, rational, and targeted plans. But now finally, because the crisis is screaming at us, the President has agreed to support our legislation, and many on the other side, hopefully, will vote for it, as they did last week.

The housing bill has many important components. It has a plan that will set a floor for some home prices. It is not a panacea, but it will help reduce the decline in home prices in many places, which is desperately needed, and reduce the rate of foreclosure for several hundred thousand homes, which is also desperately needed. I would have liked to have seen that part of the bill be stronger. I would have liked to have seen the bankruptcy provisions put in there which would have been a club and made them work a little better. They are not there, but this is still good.

We also have in the proposal CDBG money. We held a hearing of the Joint Economic Committee where, from the community in Slavik Village, people testified how empty and vacant homes were killing their neighborhood. I don't know what entity Slavik Village is in, what town, whether it is Cleveland or somewhere else, but no local community has the ability to deal with all these foreclosed homes. The only entity that can is the Federal Government.

The CDBG money, which, thank God, now the President has dropped his opposition to, will buy up those homes and prevent the market from getting worse and communities from deteriorating. Because when you have an abandoned house and some vandals come in and pull out the plumbing and electricity, and then it becomes a haven for drug dealers and criminals, it ruins the whole neighborhood. The person living down the street, who has paid his or her mortgage and does not even have a mortgage anymore, suffers as well.

So this CDBG money, as well as the whole program we are putting together, is not simply aimed at those who cannot pay their mortgages. It is actually aimed at the millions of homeowners who are hurt because even though they pay their mortgages, and even though they may have finished paying their entire mortgage, their home prices decline because there are foreclosures in the community.

Then there is the part about Fannie Mae and Freddie Mac. I think this is necessary. It is unfortunate we are at this stage but necessary. Fannie and Freddie are at the center of our housing market, and the housing market is at the center of our declining economy. If you are simply going to say: Well, let Fannie and Freddie fail, let's learn the moral hazard, you are hurting tens of millions of innocent people along the way as you teach that lesson. That is why I do not think we should do it.

Do we need tougher regulation for Fannie and Freddie? Yes. And in the bill is a much strengthened regulator. I supported that from the get- go. But to allow Fannie and Freddie to deteriorate, and deteriorate as dramatically as they might have without a possible Government backstop, would do far more damage than the Government backstop itself. The odds are, we will never have to use it. And when you add to that the odds that we will use it but it will not cost all that much, they are overwhelming. But the alternative, the risk of looking into the abyss and letting the economy roll down--because if Fannie and Freddie were to go under, Lord knows what would happen in this economy--is not worth it.

I have spoken at length to Secretary Paulson and Chairman Bernanke, both appointees of the President, and they believe this is desperately needed. I was surprised so few of our House colleagues voted for this proposal. Ideologs do not usually solve problems. They have a narrow way of looking at things. So if you say Government is always the answer, you are going to mess things up. But just as equally, if you say Government is never the answer, you will mess things up as badly. We have a whole lot of people, at least in the House, who said: Don't get the Government involved at all. Let people suffer. That is for their overall good.

It reminds me of the old days when the Adam Smith theory said: Well, let anyone sell any medicine they want, and if it is a bad medicine, and you die from it, your family will learn from it and you won't buy it again. It is an awfully harsh view of the world, and not a view most Americans agree with.

In a somewhat less serious but serious note, this is the same thing with housing. If you let the housing market go in the tank, so much suffering will occur that the risk is not worth it. So this is a good package. Is it what we would have done? No. Is it what Mr. Paulson would have done on his own? No. But it is a fair and workable compromise, and unlike the Energy bill, it is a place where we can all come together and do something for the good of the economy.

I also do want to mention there is more money for mortgage counselors. The Senator from Washington, you, I say to the Presiding Officer, the Senator from Pennsylvania, and I have been working hard to get more mortgage counselors in the bill, and there is $180 million more for that, as well as $10 billion in mortgage revenue bond authority, which will help States and localities to develop refinancing programs--very important in my State. It is something the Presiding Officer has supported, and I am glad it is in the bill.

In conclusion, Mr. President, on energy, let's look forward to the future. Let's hope some of our colleagues will join us and not cling to the answer: oil today, more oil tomorrow. We do not have it, given the increase in demand.

On housing, let us move this bill forward quickly. Both are vital to the future prosperity of our country, and both ought to become law without further delay.

Mr. President, I yield the floor.

Mr. President, I rise today to speak about the extraordinary impact of rising gasoline prices, the extraordinary impact it is having on all Americans, and the parliamentary games of those on the other side of the aisle.

The airline industry, truckers, ranchers, families who must travel to and from work and school, families going to buy groceries, all of them are experiencing dramatic increases in the cost of energy. These soaring gasoline prices offer a glimpse at the effect home heating costs will have on the American family budget this coming winter.

Today's energy crisis is focused on prices at the pump. But the Nation's energy concerns stretch well beyond the pump. In the coming weeks and months, rising energy prices will be seen in the monthly bills for home heating, natural gas, electricity, and heating oil. In fact, this month, in Washington, DC, right here in this Capitol Building, we are operating our own Senate offices under an electric brownout advisory. This is recent evidence that our electric grid is stressed. When it comes to energy, we need it all.

We need to develop domestic supplies of oil and gas. We need to develop nuclear energy. We need to develop renewable energy, such as wind and solar. We need to develop America's most affordable, secure, and abundant energy supply, and that is coal. In fact, coal to liquid offers great promise in reducing America's reliance on foreign oil imports.

We must also develop concerted policies to promote increased efficiencies, to promote increased conservation, and to reduce waste. In summary, we must find more and use less.

On the subject of soaring gasoline prices, I must ask my colleagues: When is enough enough? When will this body be willing to address the underlying issue of both supply and demand. Many are calling for change. Few are offering meaningful solutions. Here are a few examples.

Some on the other side of the aisle want to tax their way to lower oil prices. Increased taxes will result in higher prices and less oil and gas production, not more. Taxes will stifle our economic security. Taxes will not encourage economic security.

Many on the other side of the aisle think litigation is the way to bring down prices at the pump. The proposals I am cosponsoring choose innovation over litigation.

Some on the other side of the aisle claim we can regulate our way to lower prices at the pump. They want to do it by penalizing oil and gas leaseholders. This approach shows very little understanding of the energy development process. This approach offers no help, no help at all with the bureaucratic maze and roadblocks to finding more energy.

Some propose restrictions on price gouging by gas station owners, but those same individuals fail to show any actual evidence of price gouging. In fact, the margins for the gas station retailers in this country are being squeezed. Rather than increased regulation, I support proposals that invest in inspiration, in ingenuity, and in productivity gains. I support technology gains that unleash the power of the private sector to develop short- and long-term energy solutions.

Some want to impose heavy-handed Government mandates to nationalize the speed limit. Some are suggesting 55 miles an hour. I bring along a copy of a newspaper that hardly ever makes it to the streets of Wyoming. It is the New York Times, and this is this morning's paper. While the people of Wyoming do not read it, reporters from that paper actually went to Wyoming and covered Sheridan, WY.

There are five wonderful colored pictures of Wyoming and there is a nice map and it talks about Wyoming. On the front page of today's New York Times, it talks about the Kerns family, a wonderful family in the Sheridan, WY, area. They were at a town meeting I recently had and they were talking about ranching. This summarizes it. When I hear people propose a 55-mile-an-hour limit, talk about ranch families such as the Kerns--conservative, self-sufficient, and wanting mostly to be left alone.

That is what it is all about in Wyoming--conservative, self- sufficient, and wanting to be left alone. We do not need Washington telling us how to drive and how fast. We can make those decisions for ourselves.

I have the belief in the ability of Americans to choose for themselves. I am confident the people of America, not Washington, will make the right decisions. History has proven that American's self- reliance is an effective tool against rising energy prices.

American families right now are conserving in record numbers. They are carpooling, they are cutting back on the miles they drive, and they are purchasing more fuel-efficient vehicles. Statistics show that this year the year-over-year gasoline use is down roughly 2 percent. It is the steepest drop in demand in the last 17 years. American families are responding and they are responding without being told by the Federal Government to inflate their tires. Yes, that is what I heard yesterday in an Energy Committee hearing from an official: It is time to inflate your tires.

American families are conserving. They are doing so without far- reaching Government mandates. American families are demanding and purchasing more fuel-efficient cars regardless of any timeline for energy efficiency standards Congress may impose.

In fact, American families have done much more than simply conserve on energy in the past several months. Some have dealt with serious job losses. Many have struggled with housing deflation. We are all facing inflation at the grocery store.

You say: Is that happening everywhere? Wyoming has been in the news today. First, a front-page story in the New York Times and now a large story in the Wall Street Journal today; the headline: ``Want to See Inflation's Pressures? Try Wyoming, and Its $1.14 Bagels.''

There is a nice picture of a friend of mine, a bakery owner, Marsha Asbury, in Casper, and first it talks about this city. It talks about ``this wind-raked city on the plains.'' It tells you we are committed to renewable sources of energy because we have a lot of wind in Wyoming. But they talk about gasoline prices.

Gasoline prices, too, have risen sharply as they have

across the country. But it is the price of--

Actually it is what Ms. Asbury puts into her bagels that is causing her the trouble because it is causing the inflation. It says:

Most of her ingredients are shipped in from nearby states.

The prices have jumped dramatically this past year, as

suppliers struggle to recoup the high cost of trucking items

to Wyoming.

Heavy items have increased in price the most. The canned

jalapenos and pumpkin that Ms. Asbury uses for her specialty

bagels; the canned apples, for strudel; the sugar and flour--

all are up 35 percent in the past year. Butter and milk are

up 25 percent.

All because of the cost of energy and transportation fuels.

As it says:

Still, the rising cost at the pump hits hard, because

Wyoming drivers put an awful lot of miles on their pickups

and sport utility vehicles as they traverse this sparsely

populated state.

Yes, American families have moved beyond simply conserving. Now many are sacrificing. Despite the resilient response of the American people, there is still no meaningful action from this Congress to address the fundamental supply and demand for foreign oil. The Senate leadership on the other side of

the aisle will not allow a debate on bills that will actually increase American energy supplies. Each of the provisions to increase American energy offered by this side would be coupled with measures to improve conservation, to promote energy-efficient measures.

To be very clear, I agree with some of the components of the speculation bill before us. In fact, several of these provisions were included in legislation I have cosponsored. Yet, as a matter of principle, I believe the Senate must act on a set of solutions rather than pursue a piecemeal approach. It is not simply the soaring prices, but it is America's reliance, America's dependency on foreign imports. Congressional leadership is opposed to even debating increasing American exploration and production. With more American supply, there is a more secure energy future.

We have seen the same old responses from the other side of the aisle. They approach the current energy crisis, such as nearly every other policy challenge, with more taxation, with more regulation, and with more litigation. Rural States such as Wyoming are especially hit hard by soaring prices. Mass transit is not an option. Prices are high and the hundreds and hundreds of letters I received on this issue are a testament to the real pain. Wyoming does contribute greatly to America's energy needs. We are the largest producer of coal in the country; the largest producer of uranium; the second largest source of onshore natural gas; and we have world-class wind resources.

The citizens of Wyoming get it. We have been involved in domestic energy production and transmission for decades.

The other side of the aisle simply says no to domestic energy exploration; no to American energy. America faces an energy crisis and an economic crisis. Continuing to rely on increasing amounts of foreign oil leverages our country's future. It is time to focus on an American response: American energy efficiencies, American conservation, and, yes, American energy exploration. Our country deserves better and our children deserve better.

The massive transfer of wealth that is happening every day, from our country to overseas, is putting our children and our grandchildren's future at risk.

When is enough enough? I am asking those opposing American development, how much transfer of wealth is enough? How many hundreds of billions of American dollars must we send to foreign nations to buy their oil? How much of our Nation's great wealth must we transfer before it is acceptable to develop American resources? Is it $100 billion? Is it $200 billion? Is it $300 billion? Apparently not.

Some on the other side of the aisle do not want to allow American energy production through deep sea exploration, through oil shale development, through streamlined permitting. Their so-called responses leave America more and more reliant on foreign countries to provide for America's energy. We can do better and we can do so in an environmentally sensitive manner, as we have done for the 118 years we have been a State in Wyoming.

There have been extraordinary technological developments in oil and gas exploration and development. Provisions to address excess speculation must be coupled with added supply and added conservation. We must find more and use less. The rhetoric from the other side is all about change. I think those blocking American solutions to foreign energy dependence would do well to change their minds, change their policy prescriptions, and change their approach on energy policy; otherwise, this Congress will only be leaving American families with change in their pockets at the end of each month.

I believe Americans want meaningful solutions, not merely change.

There is a difference. American energy is the most important issue facing the American people today. American families are sacrificing. At a minimum, at an absolute minimum, those same families deserve real action from this Congress.

Most certainly it would be very important to turn that coal into liquid fuel for aviation. If you take a look at this morning's Politico, an issue of the Pentagon, the Department of Defense is the Nation's biggest oil consumer, burning 395,000 barrels per day, about as much as the country of Greece.

The Air Force's thirsty planes burn more than half the fuel supplied for the entire U.S. military. It did receive $1.5 billion in new relief from Congress for fuel and still has $400 million left to go.

When you look at that and say: What else could we do to help lower that cost, not just for the consumer who fills their tank at home but also for your military, it is converting coal to liquid. The technology is there. People ask: Is there enough coal and how would you do it?

There is an incredibly abundant supply of coal in this Nation. To me, coal is the most available, affordable, reliable, and secure source of energy we have in this Nation. Wyoming is the No. 1 coal producer in the United States. There is enough coal in Wyoming alone to help our Nation for centuries, for hundreds of years. Coal is there and the technology is there.

Right now under the law, the military is not allowed to make a contract long term to put that coal into liquid. But the technology is there. We have an exciting company in Wyoming, near Medicine Bow, building a plant to do this, to convert the coal to liquid. But it is not only Wyoming

As the Presiding Officer knows, and the Senator from Tennessee knows, there is coal all around the United States--coal in West Virginia, coal in Kentucky, coal in Pennsylvania, coal in Illinois, coal in Wyoming, coal in Montana. Everyplace we need energy we have coal.

Some folks are saying: What about the carbon dioxide? But the technology is there to get the carbon dioxide, to sequester it, and actually to use it for more oil development.

You take an old burned-out oil well where there is not a lot of oil coming out. There is a way to inject the carbon dioxide and get out more oil. So it is not only good because you can use the coal for the liquids, you can also use this carbon dioxide to get even more oil. By that, you are certainly finding more, with something we have here.

To me, this is so much about becoming, as a nation, energy self- sufficient. The only way we can do that is to rely on American sources of energy. We are sending hundreds of millions of dollars overseas to people who are not our friends--hundreds of billions of dollars.

This is America's treasure going overseas. Why? Because we are not energy self-sufficient. But with all the coal resources we have all across this country, and the technology, we can today start converting the coal to liquids to be used for aviation, to be used for our military. The No. 1 user is our military in terms of the largest user of our energy.

It seems to me, to the Senator from Tennessee, that when we have this discussion--and I hear Senator Isakson talking about nuclear, finding more energy that way, I hear Senator Hatch talking about the cars and using less energy that way--this is one more way in this whole portfolio of different ways to use energy as we find more and use less.

Because the American people are going to continue to use all the energy, we need all the sources of energy. That is the way we can keep down the price at the pump for people all across our country.