Accountability for Economic Rescue Assistance Act of 2008

Mr. President, I rise today in support of the passage of the HUBZone Improvement Act of 2008. This vital legislation would address the Government Accountability Office's recent recommendations to improve the Small Business Administration's administration and oversight of the Historically Underutilized Business Zone, HUBZone, program and ensure that only eligible firms participate in this crucial program.

As former chair and now ranking member of the Senate Committee on Small Business and Entrepreneurship, I have been a longstanding champion for small business programs such as the HUBZone program. The HUBZone program provides Federal contracting assistance to small firms located in economically distressed areas, with the intent of stimulating economic development. According to the GAO, as of February 2008, 12,986 certified businesses have participated in the HUBZone program since its inception. And in fiscal year 2007, over 4,200 HUBZone firms obtained approximately $8.1 billion in Federal contracts. In these troubling economic times, the HUBZone program is something our country needs now more than ever.

The mechanisms that the SBA uses to certify and monitor HUBZone firms provide limited assurance that only eligible firms participate in the program. Unfortunately, according to a recent GAO report and analysis of 125 applications submitted in September of 2007, the SBA only requested supporting documentation, which helps to clarify the status of the business, for 36 percent of the applications and only conducted a single site visit for all 125 applicants. While the SBA's policies and procedures require program examinations, the agency only conducts them on 5 percent of certified HUBZone firms each year. This is a glaring lack of oversight that must be rectified.

The legislation I introduce today, the HUBZone Improvement Act of 2008, would take immediate steps to correct the lack of effective administrative oversight by requiring more routine and consistent supporting documentation during the program's application process. In its report, the GAO found that the SBA relies on Federal law to identify qualified HUBZone areas, but the map it uses to publicize HUBZone areas is inaccurate, and the economic characteristics of designated areas vary widely. My bill would require that the SBA take immediate steps to correct and update the map that the SBA uses to identify HUBZone areas and implement procedures to ensure that the map is updated with the most recently available data on a more frequent basis.

The GAO also found that the mechanisms that SBA uses to certify and monitor firms provide limited assurance that only eligible firms participate in the program. The GAO found that more than 4,600 firms that had been in the program for at least 3 years went unmonitored. My legislation would require the SBA to develop and implement guidance to more routinely and consistently obtain supporting documentation upon application and conduct more frequent site visits, as appropriate, to ensure that firms applying for certification are eligible. These commonsense achievable steps would help to eliminate participant fraud and misrepresentation, and ensure that firms applying for HUBZone certification are truly lawful and eligible businesses.

In its report, the GAO illustrates the SBA lack of a formal policy on how quickly it needs to make a final determination on decertifying firms that may no longer be eligible for the HUBZone program. According to the GAO, of the more than 3,600 firms proposed for decertification in fiscal years 2006 and 2007, more than 1,400 were not processed within 60 days--the SBA's targeted timeline. As a result of these weaknesses, there is an increased risk that ineligible firms have participated in the program and had opportunities to receive Federal contracts based on their HUBZone certification. My legislation would require the SBA to formalize and adhere to a specific timeframe for processing firms proposed for decertification in the future, as well as require further developed measures in assessing the effectiveness of the HUBZone program.

Moreover, the Federal Government must strive to continue to provide additional contracting opportunities to those who are legitimate HUBZone firms. I am dismayed by the innumerable ways that government agencies have time and again egregiously failed to meet most of their small business contracting goals. I am alarmed that only one Federal small business contracting program--the small disadvantage business program--has met its statutory goal, and that the three other small business goaling programs have all fallen drastically short. For example, in fiscal year 2007, the HUBZone program met only 2.2 percent of its three percent government-wide goal. The Federal Government can and must provide more to our country's hardworking small businesses.

In my home State of Maine, only 118 of 41,026 small businesses are qualified HUBZone businesses. HUBZones represent a tremendous tool for replacing lost jobs for our Nation's declining manufacturing and industrial sectors--clearly, this program should be better utilized.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I rise to introduce legislation with Senator WHITEHOUSE to extend the reach of the Federal Bureau of Investigation into financial crimes that may have helped precipitate the economic meltdown of the past several months.

We must investigate and scrutinize this financial crisis as we would a terrorist attack in order to determine its causes and how to preempt another economic collapse in the United States.

Following the September 11th attacks, the FBI re-directed approximately 1,000 agents to counterterrorism and counterintelligence activities. Without a doubt, there is no argument that our country has benefitted from the dedicated efforts of the men and women of the FBI who are performing this valuable work.

Over a 10-year period, from fiscal year 1999 to fiscal year 2008, Congress has increased direct appropriations for the FBI from $2.993 billion and 26,693 positions to $6.658 billion, 122 percent increase, and 30,211 positions, 13 percent increase. Most of these new resources were provided in the wake of the September llth terrorist attacks, as the FBI redirected its resources toward combating domestic and international terrorism by improving its intelligence gathering and processing capabilities. As a consequence, for fiscal year 2008, about 60 percent of FBI funding and staffing is allocated to national security programs, including counterterrorism and counterintelligence.

In view of the breadth and severity of the economic crisis brought on by events in U.S. financial markets, however, I am very concerned that criminal wrongdoing may have played a significant role in crippling some of America's largest companies. Criminal activity, such as fraud, misrepresentation, self-dealing, and insider trading may have instigated or exacerbated the financial industry upheaval of 2008.

In order to augment FBI investigations of financial crimes, the FBI Priorities Act of 2008 authorizes $150 million for each of the fiscal years 2009 through 2013 to fund approximately 1,000 Federal Bureau of Investigation field agents in addition to the number of field agents serving on the date of enactment. It is my hope that this extra manpower will enable the FBI to develop leads on unlawful actions, dig deeply into those leads, and bring responsible parties to justice. The American public deserves no less.

Mr. President, I rise today to introduce the 10 Steps for a Main Street Economic Recovery Act of 2008, a measure that will take dramatic action to finance the growth of our Nation's small businesses, which represent 99.7 percent of all employers and create approximately 75 percent of net jobs each year. Our country faces a financial crisis of unprecedented severity that is choking off economic growth and small business survival by denying all businesses, but especially small firms, access to the capital they need.

As Ranking Member of the Senate Committee on Small Business and Entrepreneurship, it has long been my goal to expand access to capital for small businesses. One of the most valuable assets for realizing this goal are the Small Business Administration's, SBA's, core lending programs, including the 7(a) and 504 programs. Historically, when credit to small businesses has contracted, as is presently the case, banks have turned to the SBA in order to make loans to small business owners. Yet, regrettably, during these arduous economic times--we are not only seeing a significant drop in the amount of business loans made but we are also seeing credit lines completely shut down and commercial loans canceled.

Our current economic downturn is drastically more dangerous than any threat to our financial system in decades. Banks are tightening their lending standards without a similar increase in the volume of SBA guaranteed loans to small businesses, creating a domino effect on small businesses' job creation ability. The Federal Reserve's November 2008 Quarterly Loan Officer Survey finds that, in the last quarter, 75 percent of banks state that they have tightened their lending standards for small firms. Not surprisingly, lending in the SBA's 7(a) and 504 programs have declined dramatically. Over the past year, lending in the 7(a) program has decreased by 55 percent while loan volume in the 504 program is down 36 percent. Since the U.S. financial market turmoil began in September, overall SBA lending is down by 50 percent from the previous year.

This is why I am introducing the 10 Steps for a Main Street Economic Recovery Act, which, as its title indicates, contains a series of 10 achievable, commonsense steps that could be implemented immediately to help thaw out frozen credit markets so that small businesses--both in Maine and across the country--can continue to be the driving force of our Nation's economy. All of the provisions included in my legislation would directly address the credit crunch small firms are facing and help them get the capital necessary to finance business growth.

First, my bill would improve the Small Business Administration's flagship lending program, the 7(a) program, by increasing the amount of financing, from $2 million to $3 million, that small firms can secure; allowing small firms to refinance their 7(a) loans if they can get better terms with another lender; and simplifying procedures for the loan poolers who bundle SBA loans in a secondary market that will generate additional liquidity for small firms and banks.

As a second step, my bill would directly expand small firms' access to credit by making the SBA's Community Express lending program permanent. This year, as credit has contracted, demand for the SBA's Community Express program has increased dramatically. But, because this is a pilot program, its ability to meet this loan demand has been severely restricted, forcing lenders to turn borrowers away who qualify for Community Express loans.

My legislation also seeks to bring in new and rural lenders, and teach them how to make SBA loans, by establishing an online loan underwriting guide to walk lenders through the process. This would increase the number of banks making SBA loans, from rural Maine to small towns in California, and ultimately promote small business owners' overall access to capital.

As a third step, my bill would improve the SBA's 504 loan program by raising the loan limit from $2 million to $3 million. It would also permit borrowers to refinance some existing debts into a 504 loan, and expands the 504 program's ability to finance projects in low-income communities.

Fourth, the 10 Steps for a Main Street Economic Recovery Act would rectify the current lack of liquidity in the 504 program by providing a new short-term guarantee on the first loans in the 504 loan package in order to encourage investors to buy these securities. Currently, without such a guarantee, investors are not purchasing the first loans in the 504 loan package. This is preventing Community Development Companies, CDCs, from making new 504 loans to small firms. The cost of this guarantee will be fully covered by participating 504 lenders. Once enacted into law, this temporary guarantee, which would expire at the end of fiscal year 2010, would increase investor confidence, encourage them to buy 504 investments and resurrect demand for 504 loans.

Fifth, my legislation contains large, temporary fee reductions to defray the cost of borrowing for small business owners and SBA lenders. My proposal would reduce overall fees for 7(a) and 504 lenders and borrowers by $510 million dollars, a hefty sum considering that the SBA's fiscal year 2008 budget was only $663 million. When small firms lack access to capital, they are unable to buy new inventory, finance new expansions, or often even cover their payrolls. During these troubled times, the SBA should do everything within its power, including lowering lending fees, to help ensure that small

firms have access to the credit they require.

Sixth, as small firms are being turned away from banks and are seeking credit through micro-lending organizations, my legislation recognizes that the credit crunch has increased the demand for SBA microloans. It dedicates $25 million so that SBA microloan providers can make additional loans and cover the costs of technical assistance associated with these microloans.

As a seventh step, my bill would raise the maximum amount of government guaranteed capital a Small Business Investment Company, SBIC, can control, from $130.6 million to $150 million for a single SBIC and $225 million for a group of SBICs. This will enable SBICs to have additional funds to invest in start-up small businesses, which will be critical in driving economic recovery.

Eighth, this legislation would direct the SBA to develop a nationwide advertising strategy to direct small firms to SBA lenders, and dedicates $5 million to pay for this strategy. Today, many local and community banks have credit they can extend to small firms. Unfortunately, many small businesses hear that there is a credit crunch and erroneously believe that no other lenders have financing options available. This vital advertising will guide small firms to find the available resources they need through SBA lenders.

As a ninth step, my legislation recognizes that taxes disproportionately impact small firms' bottom lines. It would provide tax breaks that will spur small business growth by extending the increased $250,000 small business expensing limit through 2009. This will provide small businesses with incentives to invest in plants and equipment by reducing their cost of capital. Additionally, the bill would provide small firms with an immediate capital injection by allowing them to carryback their 2008 or 2009 net operating losses for 5 years and provide business owners with a longer period over which to offset current losses. These measures will help small companies sustain operations and continue to employ workers.

Finally, this legislation would clarify that 7(a) and 504 loans are eligible for the Treasury Department's Troubled Asset Relief Program, TARP. I have sent a letter, with Senator Kerry, directing the U.S. Treasury Department to immediately purchase illiquid 7(a) and 504 securities from the secondary market in order to free these markets up and once again create liquidity for small businesses. Though the Treasury already has this authority under the TARP, this provision would clarify that authority so the Treasury can act promptly and decisively to address the credit crunch's impact on small firms.

In developing this bill, my office reached out to a host of small businesses and lenders, and consulted with the National Association of Development Companies and National Association of Guaranteed Government Lenders.

Given the dimensions of what is occurring in our economy, the SBA and the Administration must do everything possible to help credit worthy small businesses secure the loans they need to innovate, access new markets, hire new employees, and grow. Today, as banks are raising their credit requirements in order to avoid risk, it is becoming more and more difficult for small businesses to qualify for loans. The SBA's lending programs are critical to small businesses in this endeavor.

By implementing the vital provisions contained in the 10 Steps for a Main Street Economic Recovery Act, we can increase the opportunities for our Nation's small businesses to not only survive during this downturn, but to be a catalyst for turning around and reinvigorating our economy. I encourage my colleagues to join me in supporting the 10 Steps for a Main Street Recovery Act.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, in a time of rising prices and historic economic turmoil, single parents deserve our support more than ever. That is why I am introducing the Elimination of the Single Parent Tax Act of 2008. I am proud to join my colleague Congresswoman Gillibrand in introducing this important legislation to help single parents by suspending State fees to fund child support enforcement.

Many states, including New York, were forced to institute this fee after the Republican-lead Congress passed the Deficit Reduction Act of 2005, which slashed funding for child support enforcement. The fee is expected to affect 170,000 families in New York alone. These single parents need every penny of their child support income to go towards food, medicine, and other important expenses. The Elimination of the Single Parent Tax Act ensures that hard-working single parents don't face an extra tax.

In September, I joined my Senate colleagues in urging the Senate Appropriations Committee leadership to increase funding for child support enforcement to stave off these deep cuts. And today, I encourage my colleagues to join me in sponsoring this critical measure to support single parents.

For too long, single-parent households have been ignored at a time when raising children has only become more of a struggle. Yet despite these challenges, single parents heroically soldier on. This bill is only a critical first step to a more comprehensive approach to supporting single parents raising children. I look forward to continuing to fight in the Senate to stand up for our most vulnerable children and our hardest-working families.

Mr. President, I rise today to introduce legislation to address the urgent need of our underserved urban and rural school districts

by creating a corps of principals who are well-prepared, supported, and effective in improving student academic achievement in high-need schools and ensuring our schools are provided the leadership they need to prepare our children to compete in the 21st century.

The U.S. Department of Labor estimates that nearly 40 percent of the 90,000 principals in this country are nearing retirement, and over half the Nation's school districts are facing immediate administrator shortages. This problem is particularly prevalent in urban and rural districts with large concentrations of high-poverty schools, where turnover rates can reach as high as 20 percent per year, and academic achievement is persistently low.

That is why I'm introducing the National Principal Recruitment, NPR, Act, which seeks to address the impending shortage by establishing a corps of principals who are well-prepared, supported, and effective in improving student achievement in high-need schools. This corps is created through the recruitment of results-oriented candidates who possess personal leadership and management skills, knowledge of effective instruction, and commit to serve in high-need schools for over 5 years. Once selected, these candidates would undergo a year-long principal residency program, and receive support and mentoring to help them develop and maintain a data-driven, professional learning community.

This bill leverages non-Federal dollars with targeted funding to performance-based work done in partnership with school districts. It also includes an evaluation to capture knowledge and best practices and creates a prototype of a performance-based Federal education program by tying funding levels to an evaluation of student achievement results.

An effective and capable school leader can make the difference in providing the tools and instructional support needed to foster the type of school environment conducive to student academic success. The NPR Act will ensure that our neediest schools have effective leaders, who are well-equipped and supported, to close the achievement gap and prepare our students to compete in a global economy.

I am hopeful that my Senate colleagues from both sides of the aisle will join me today to move this legislation to the floor without delay.

Mr. President, today, I am introducing the Health Professions and Primary Care Reinvestment Act in order to improve access to quality health care for all Americans. By significantly reinvesting in the training and education of our health professionals, we are reinvesting in our communities where care is most needed.

This bill reinvests in health professional training in three ways--by expanding the training our health professionals receive, by improving our efforts to recruit and retain health professionals, and by increasing incentives for health professionals who are serving in community settings, particularly in rural and urban underserved areas.

Most Americans prefer to get their health care through a personal physician operating as part of a team-based primary care practice, yet the number of health professional students entering these fields is decreasing. We need more workers in primary care at the front lines of the health care system. Primary care professionals can help to establish a ``medical home'' for patients, providing preventive care to help people stay healthy and provide coordination of care for those with multiple or chronic diseases. This bill would achieve this goal by providing incentives for training primary care professionals, by strengthening primary care departments at the school and community level, and by supporting improved infrastructure to assist those serving in primary care settings.

Minorities, disadvantaged and rural students are underrepresented in our health professional workforce. We need to increase their numbers in the medical fields, and provide incentives for them to return to underserved areas to practice. As an example of what can be done, one program targeting rural students has returned eight times the usual number of trained family physicians to rural settings. We need to train people from all backgrounds--from underrepresented minorities, from disadvantaged backgrounds, from rural and urban underserved communities. This bill helps to achieve this goal by strengthening pipeline programs, expanding loans and scholarships, and by increasing the availability of care in underserved communities.

We need health care where people live and work. Americans should be able to access care in communities that are located far from hospitals and medical centers, in the poorest neighborhoods of cities and isolated rural areas. We need to support the institutions that the most vulnerable rely on for care, like community health centers, local departments of health, and nursing homes. This bill supports new models of care for training, recruiting, supporting and retaining faculty to serve in underserved settings, and provides infrastructure support for training students in community settings outside of the hospital, where patients need care.

In addition to addressing primary care, the legislation also works to address other health fields which are often inaccessible to patients. Dental care in the United States has become a luxury that is unaffordable to many people. Dentists are often unable to sustain careers by teaching in dental schools training the next generation of professionals, or to work in communities where the need is greatest. This bill provides support for dentists to pursue academic teaching careers and to provide general care to both adults and children. It targets underrepresented minority dentists and those who will serve in communities where the need is greatest.

One impediment to good health for people with mental health problems is lack of care coordination. Too often the psychological problem goes undiagnosed or untreated, because our health care system operates in silos. Patients are often asked to go one place to meet physical health needs and another place to meet mental health needs. This bill provides support for training and care where the health professionals work together to co-manage mental health and physical health problems toward better overall health.

We, as a nation, are getting older. As we age, our health concerns change. Many seniors take multiple medications which need to be coordinated by a team of doctors, pharmacists, and other caregivers. The Health Professions and Primary Care Reinvestment Act reinvests in our geriatric training programs by expanding opportunities for doctors, pharmacists, psychologists, dentists and others to work with patients in rehabilitation centers, at home, in nursing homes or other settings where people live or work.

Our public health and preventive medicine professionals respond to crises like SARS, anthrax, and other infectious disease outbreaks. But they also work to educate the public about ways to stay healthy, and prevent chronic diseases. They contribute to the health care safety net with services like adult and childhood vaccinations. This bill helps to support these efforts by reinvestment in training for prevention. It links schools of public health with local and State departments of health in order to train professionals to work and serve in settings where they are most needed.

Finally, and very importantly, we must better understand the demands that will be made upon our health professional workforce. This bill provides authorization for the formation of a national and multiple regional health workforce analysis centers, along with an advisory committee comprised of administrative and health professional leadership. These entities will assess, review and oversee health professional workforce needs so that we can plan and prepare a new generation of health professionals in our schools and communities.

The Health Professions and Primary Care Reinvestment Act addresses the multiple challenges facing healthcare workforce development in our country.

It will invest in primary care, expand the number of health professionals truly representative of the communities they serve, and improve the availability of care in places where Americans need it most. I look forward to working with my colleagues in the Senate on the many issues of our health care workforce, and I would urge their support of this legislation.

Multiple organizations, including Advocating for Family Medicine, American Academy of Family Physicians, American Academy of Physician Assistants, American Association of Colleges of Osteopathic Medicine, American College of Preventive Medicine, American Dental Association, American Dental Education Association, American Geriatrics Association, American Osteopathic Association, American Psychological Association, Association of Departments of Family Medicine, Association of Family Medicine Residency Directors, Association of Minority Health Professions Schools, Inc., Association of Schools of Public Health, Hospital Association of New York State, National AHEC Organization, National Council for Diversity in the Health Professions, North American Primary Care Research Group, Society of General Internal Medicine, and the Society of Teachers of Family Medicine have endorsed this legislation.

Mr. President, I ask unanimous consent that letters of support be printed in the Record.

Mr. President, I rise today on behalf of myself and Senator Snowe to introduce legislation that will enhance transparency, strengthen oversight, and encourage responsible corporate governance for firms receiving financial lifelines from the Federal Government.

Our bill--the Accountability for Economic Rescue Assistance Act--will achieve four essential objectives.

It will prohibit firms receiving loans from the Federal Reserve or any of the $700 billion economic rescue funds from Treasury from using this money for lobbying expenditures or political contributions; require that firms receiving

government assistance provide detailed, publically available quarterly reports to Treasury outlining how taxpayer dollars have been used; establish corporate governance standards to ensure that firms receiving federal assistance do not waste money on unnecessary expenditures; and, create penalties of at least $100,000 per violation for firms that fail to meet the corporate governance standards established in the bill.

The need for such legislation has become apparent in the weeks since Congress approved the economic rescue plan.

Since then, news reports have uncovered multiple instances in which rescued firms have been caught making unnecessary and outrageous expenditures, which calls their assistance from taxpayers into question.

Last week, Treasury Secretary Paulson announced that the $700 billion approved by Congress to stabilize financial markets would not be used to purchase illiquid assets but rather to make direct capital injections into financial institutions.

Given this new mission, the need for additional transparency and disclosure is striking.

We have learned that we cannot necessarily count on these firms and their executives to act sensibly and do what is right.

The public needs to know that their tax dollars are being put to good use. A simple ``trust me'' from the bank executives is not enough.

On October 16th, the Wall Street Journal reported that American Insurance Group, AIG, which received billions of dollars in Federal rescue funds, was continuing to lobby state regulators to delay implementation of strengthened licensing standards for mortgage brokers and lenders.

AIG was lobbying against sensible standards created by the SAFE Mortgage Licensing Act of 2008. This bill, introduced by Senator Martinez and myself, established basic minimum regulations for the mortgage industry to ensure consumers were adequately protected.

Before this bill, in some states virtually anyone--even those with criminal records--could go out and get a mortgage broker's license.

Left unchecked, and with no regulations to stop them, unscrupulous mortgage brokers and lenders flooded the markets with subprime loans that they knew would never be paid back, and this served as one of the catalysts for our current economic predicament.

Now AIG, having succumbed to bad investments and propped up by billions in government money, was lobbying against the strong enforcement of state laws that might have helped prevent this catastrophe in the first place.

Senator Martinez and I wrote a letter to AIG and, to the company's credit, CEO Edward Liddy immediately suspended the company's lobbying operations.

I find it completely unacceptable that taxpayer dollars intended to stabilize the economy could find their way into the bank accounts of lobbying firms. The legislation which I introduce today will make sure that doesn't happen.

I do not mean to pick on AIG, but they have also been the poster child for wasteful spending by rescued firms.

In September, just days after receiving an $85 billion federal lifeline, the management of AIG treated itself to a $444,000 spa weekend at the St. Regis resort in Monarch Beach, California. This included $200,000 for rooms, $150,000 for fine dining and $23,000 in spa charges.

AIG executives spent the last two days of September on a golf outing at Mandalay Bay in Las Vegas at a cost of up to $500,000. They were planning to follow this with a few days at the Ritz Carlton in Half Moon Bay, but cancelled after it hit the news and drew fire from Congressional leaders.

As news of these wasteful expenditures was making headlines, AIG received another $37.8 billion in emergency loans from the Federal Government. Shortly thereafter, the Associated Press reported that-- even as AIG was asking Congress for these loans--AIG executives were spending $86,000 on a pheasant hunting expedition in England. During the trip, they stayed at a 17th century manor.

One AIG executive named Sebastian Preil was quoted as saying that: ``The recession will go on until about 2011, but the shooting was great today and we are relaxing fine.''

Once these lapses in judgment came to light, AIG chief executive Edward Liddy informed Congress that he was putting an end to all nonessential expenditures. Yet earlier this month, an undercover news crew caught AIG executives at the Hilton Squaw Peak Resort in Phoenix, hosting a seminar for financial planners complete with cocktails and limousines.

One would think that a brush with collapse and total failure might have a sobering effect on some of these firms.

But this penchant for wasteful junkets in the face of complete failure was not unique to AIG.

The Wachovia Corporation was caught shipping its top brokers off to the Greek Isles on a cruise ship for an all-expenses paid luxury trip-- even as the company awaited a buyout potentially backed by taxpayers.

Wachovia cancelled the trip due to the storm of criticism attracted by this stunning display of what the ancient Greeks called hubris.

While the economic rescue legislation passed in September includes several oversight boards and accountability provisions to ensure that public funds are effectively distributed, the bill does not include any reporting requirements for firms that receive Federal dollars.

This is a significant omission, especially given the amount of Federal money that some firms are receiving.

The Treasury Department has already approved the purchase of $160 billion of preferred stock in 30 financial institutions. We know that of these funds $125 billion was allocated to nine large national banks.

It was also reported last week that AIG will receive an additional $40 billion, meaning that at least $165 billion of the economic rescue funding will be allocated to only 10 firms.

When you add up all of the taxpayer dollars put on the line--from $30 billion provided to Bear Stearns in March, $200 billion available to Fannie Mae and Freddie Mac, $150 billion to AIG, $700 billion in economic rescue funds, plus the direct lending programs at the Federal Reserve--we are talking about well over 1 trillion Federal dollars.

I certainly don't think it is unreasonable for the public to know how their money is being spent.

As the end of the year nears, we are approaching bonus time on Wall Street. Certainly Americans deserve assurances that struggling firms will not use public funds to pay higher bonuses.

The same can be said for these funds going towards dividend payments, or mergers and acquisitions.

Shining light on how firms use public dollars not only makes good sense, but it will also act as a deterrent to irresponsible behavior.

My vote on the economic stabilization bill was one of the toughest I have taken during my time in the Senate.

My office received more than 160,000 calls, letters, and e-mails from Californians concerned about this course of action.

But, I decided to support the bill to ensure that action would be quickly taken to ease the flow of credit to consumers and businesses.

Our economy continues to struggle today. The money approved by Congress must be used sensibly to ensure its maximum impact.

Americans are struggling, and the pain in my State of California, where unemployment is 7.7 percent, and foreclosure filings exceed 680,000 this year, is especially acute.

This bill puts in place commonsense solutions to fix some of the deficiencies in the economic stabilization bill.

This bill is significant and sorely needed. We must act soon to help restore confidence in this effort and shed light on how public funds are used. We promised the American people transparency and oversight, and this legislation will make good on that promise.

I hope my colleagues will join me to ensure that taxpayer dollars are spent efficiently and responsibly.

Mr. President, I rise today on behalf of myself and Senator Snowe to introduce legislation that will enhance transparency, strengthen oversight, and encourage responsible corporate governance for firms receiving financial lifelines from the Federal Government.

Our bill--the Accountability for Economic Rescue Assistance Act--will achieve four essential objectives.

It will prohibit firms receiving loans from the Federal Reserve or any of the $700 billion economic rescue funds from Treasury from using this money for lobbying expenditures or political contributions; require that firms receiving

government assistance provide detailed, publically available quarterly reports to Treasury outlining how taxpayer dollars have been used; establish corporate governance standards to ensure that firms receiving federal assistance do not waste money on unnecessary expenditures; and, create penalties of at least $100,000 per violation for firms that fail to meet the corporate governance standards established in the bill.

The need for such legislation has become apparent in the weeks since Congress approved the economic rescue plan.

Since then, news reports have uncovered multiple instances in which rescued firms have been caught making unnecessary and outrageous expenditures, which calls their assistance from taxpayers into question.

Last week, Treasury Secretary Paulson announced that the $700 billion approved by Congress to stabilize financial markets would not be used to purchase illiquid assets but rather to make direct capital injections into financial institutions.

Given this new mission, the need for additional transparency and disclosure is striking.

We have learned that we cannot necessarily count on these firms and their executives to act sensibly and do what is right.

The public needs to know that their tax dollars are being put to good use. A simple ``trust me'' from the bank executives is not enough.

On October 16th, the Wall Street Journal reported that American Insurance Group, AIG, which received billions of dollars in Federal rescue funds, was continuing to lobby state regulators to delay implementation of strengthened licensing standards for mortgage brokers and lenders.

AIG was lobbying against sensible standards created by the SAFE Mortgage Licensing Act of 2008. This bill, introduced by Senator Martinez and myself, established basic minimum regulations for the mortgage industry to ensure consumers were adequately protected.

Before this bill, in some states virtually anyone--even those with criminal records--could go out and get a mortgage broker's license.

Left unchecked, and with no regulations to stop them, unscrupulous mortgage brokers and lenders flooded the markets with subprime loans that they knew would never be paid back, and this served as one of the catalysts for our current economic predicament.

Now AIG, having succumbed to bad investments and propped up by billions in government money, was lobbying against the strong enforcement of state laws that might have helped prevent this catastrophe in the first place.

Senator Martinez and I wrote a letter to AIG and, to the company's credit, CEO Edward Liddy immediately suspended the company's lobbying operations.

I find it completely unacceptable that taxpayer dollars intended to stabilize the economy could find their way into the bank accounts of lobbying firms. The legislation which I introduce today will make sure that doesn't happen.

I do not mean to pick on AIG, but they have also been the poster child for wasteful spending by rescued firms.

In September, just days after receiving an $85 billion federal lifeline, the management of AIG treated itself to a $444,000 spa weekend at the St. Regis resort in Monarch Beach, California. This included $200,000 for rooms, $150,000 for fine dining and $23,000 in spa charges.

AIG executives spent the last two days of September on a golf outing at Mandalay Bay in Las Vegas at a cost of up to $500,000. They were planning to follow this with a few days at the Ritz Carlton in Half Moon Bay, but cancelled after it hit the news and drew fire from Congressional leaders.

As news of these wasteful expenditures was making headlines, AIG received another $37.8 billion in emergency loans from the Federal Government. Shortly thereafter, the Associated Press reported that-- even as AIG was asking Congress for these loans--AIG executives were spending $86,000 on a pheasant hunting expedition in England. During the trip, they stayed at a 17th century manor.

One AIG executive named Sebastian Preil was quoted as saying that: ``The recession will go on until about 2011, but the shooting was great today and we are relaxing fine.''

Once these lapses in judgment came to light, AIG chief executive Edward Liddy informed Congress that he was putting an end to all nonessential expenditures. Yet earlier this month, an undercover news crew caught AIG executives at the Hilton Squaw Peak Resort in Phoenix, hosting a seminar for financial planners complete with cocktails and limousines.

One would think that a brush with collapse and total failure might have a sobering effect on some of these firms.

But this penchant for wasteful junkets in the face of complete failure was not unique to AIG.

The Wachovia Corporation was caught shipping its top brokers off to the Greek Isles on a cruise ship for an all-expenses paid luxury trip-- even as the company awaited a buyout potentially backed by taxpayers.

Wachovia cancelled the trip due to the storm of criticism attracted by this stunning display of what the ancient Greeks called hubris.

While the economic rescue legislation passed in September includes several oversight boards and accountability provisions to ensure that public funds are effectively distributed, the bill does not include any reporting requirements for firms that receive Federal dollars.

This is a significant omission, especially given the amount of Federal money that some firms are receiving.

The Treasury Department has already approved the purchase of $160 billion of preferred stock in 30 financial institutions. We know that of these funds $125 billion was allocated to nine large national banks.

It was also reported last week that AIG will receive an additional $40 billion, meaning that at least $165 billion of the economic rescue funding will be allocated to only 10 firms.

When you add up all of the taxpayer dollars put on the line--from $30 billion provided to Bear Stearns in March, $200 billion available to Fannie Mae and Freddie Mac, $150 billion to AIG, $700 billion in economic rescue funds, plus the direct lending programs at the Federal Reserve--we are talking about well over 1 trillion Federal dollars.

I certainly don't think it is unreasonable for the public to know how their money is being spent.

As the end of the year nears, we are approaching bonus time on Wall Street. Certainly Americans deserve assurances that struggling firms will not use public funds to pay higher bonuses.

The same can be said for these funds going towards dividend payments, or mergers and acquisitions.

Shining light on how firms use public dollars not only makes good sense, but it will also act as a deterrent to irresponsible behavior.

My vote on the economic stabilization bill was one of the toughest I have taken during my time in the Senate.

My office received more than 160,000 calls, letters, and e-mails from Californians concerned about this course of action.

But, I decided to support the bill to ensure that action would be quickly taken to ease the flow of credit to consumers and businesses.

Our economy continues to struggle today. The money approved by Congress must be used sensibly to ensure its maximum impact.

Americans are struggling, and the pain in my State of California, where unemployment is 7.7 percent, and foreclosure filings exceed 680,000 this year, is especially acute.

This bill puts in place commonsense solutions to fix some of the deficiencies in the economic stabilization bill.

This bill is significant and sorely needed. We must act soon to help restore confidence in this effort and shed light on how public funds are used. We promised the American people transparency and oversight, and this legislation will make good on that promise.

I hope my colleagues will join me to ensure that taxpayer dollars are spent efficiently and responsibly.

Mr. President, this has been a volatile time for our financial system and our economy. Hopefully, we will be able to agree on a short-term stimulus relief that will help families who are suffering and states meet their financial obligations.

Next, we need to create new jobs by updating our infrastructure to help respond to the current challenges to our economy. I believe a first-rate American rail system is a critical part of the efforts to create jobs and expand our economy. It will also help make our air cleaner, ease traffic congestion, save families' money and time, and lessen our dependence on foreign oil.

That is why today, Senator Specter and I are introducing the High- Speed Rail for America Act of 2008. Senators Lautenberg, Inouye, Brown, Stabenow, Feinstein, Dodd, Casey, Lieberman, Whitehouse, Clinton, Schumer, Snowe, and Menendez are cosponsors. This legislation provides a bold new vision of how we approach transportation policy to expand our economy and keep up with changes in our society.

The High-Speed Rail for America Act of 2008 builds upon the Passenger Rail Investment and Improvement Act of 2008 which reauthorizes Amtrak and authorizes $1.5 billion over a five-year period to finance the construction and equipment for 11 highspeed rail corridors. I want to thank Senator Lautenberg for his leadership on reauthorizing Amtrak and making investment in high-speed rail a priority.

Today, Amtrak's Acela train on the Northeast Corridor is capable of reaching 150 miles per hour. However, due to a lack of infrastructure improvements, the Acela train only travels at 150 miles per hour on an 18-mile stretch in Rhode Island and a 10-mile stretch in Massachusetts. We must make appropriate improvements to our railroad tracks and bridges to allow high speed rail to work properly.

While the U.S. is investing heavily in other forms of transportation, our investment in world class rail is dwarfed by other countries. For example, Germany's federal government gives its states $8.9 billion a year for rail projects, France spends twenty times more per capita on rail than the U.S., and the Ministry of Railways in China invested $19.6 billion in rail in the first half of 2008 alone. That is why we need to provide a constant source of funding for investment in high- speed rail. The High-Speed Rail for America Act of 2008 will take our outdated and underfunded passenger rail system and transform it into a world class system.

The High-Speed Rail for America Act of 2008 builds on the authorization of highspeed rail grants by providing billions of dollars in both tax exempt and tax credit bonds. It provides assistance for rail projects of various speeds. The bill creates the Office of High- Speed Passenger Rail to oversee the development of high-speed rail and provides a consistent source of funding. This office will ensure that we have the leadership to keep this mission on track.

High-speed rail is often the fastest and most reliable way to get from downtown to downtown between most cities 100-500 miles apart. High-speed rail can save up to an hour per trip when compared to air travel and reduces trip time by more than 50 percent compared to driving. The legislation provides $8 billion over a 6-year period for tax-exempt bonds which finance high-speed rail projects which reach a speed of at least 110 miles per hour. This speed is often most practical for corridors of less than 100 miles or for less travelled routes which cannot justify the investment into world class high-speed rail traveling at 150 miles per hour.

The High-Speed Rail for America Act of 2008 also creates a new category of tax-credit bonds: qualified rail bonds. There are two types: super high-speed intercity rail facility bond and rail infrastructure bond. Super high-speed rail intercity facility bonds will encourage the development of true high-speed rail. The legislation provides $10 billion for these bonds over a six-year period. Rail projects that reach a speed of at least 150 miles per hour will be eligible for these bonds. This would help finance projects including the proposed California corridor and make needed improvements to the Northeast corridor.

Rail infrastructure bonds will fund projects approved by the U.S. Department of Transportation and be part of a State's official rail plan. The High-Speed Rail for America Act of 2008 provides $5.4 billion over a 6-year period for this type of bond. The Federal Rail Administration has already designated ten rail corridors that these bonds could help fund, including connecting the cities of the Midwest through Chicago, connecting the cities of the Northwest, connecting the major cities within Texas and Florida, and connecting all the cities up and down the East Coast. These are projects that are ready to go, but they need a source of financing.

The need for a bold shift in the way we approach transportation is clear. Traffic congestion continues to worsen in cities across the country, creating a $78 billion drain on the U.S. economy with 4.2 billion lost man hours of work and 2.8 billion gallons of wasted fuel. Last year, domestic flight delays cost the economy $41 billion and consumed about 740 million additional gallons of jet fuel waiting on the ground. Passenger rail reduces congestion and is an effective alternative to highway and air transportation. Americans want alternatives--and we can deliver them.

We must focus on making the transportation sector part of the solution to global climate change. The transportation sector accounts for approximately one-third of U.S. CO2 emissions--and automobiles make up 60 percent of that. Public transportation is an essential part of the solution to global warming. According to the American Public Transportation Association, public transportation reduces CO2 emissions by 37 million metric tons annually and saves the average American household over $6,000 annually.

The demand for alternative forms of transportation is only growing. The number of people riding Amtrak surged by more than 13 percent in July 2008 from a year earlier--the most passengers carried in any month during Amtrak's 37 year history. Amtrak ridership set an all-time record for fiscal year 2008, achieving growth of 11 percent.

As we look towards economic stimulus legislation next year, we must rethink the approach we have taken towards mobility in this country. Countries around the world have realized the benefits of high-speed rail and continue to build out their systems as we fall farther and farther behind. For far too long, we have not made adequate investment in our infrastructure. We cannot let this pattern continue.

We have all heard the skeptics and cynics dismiss the idea of high- speed rail for decades, but due to high energy prices, increased passenger rail ridership, and the need to reduce greenhouse gasses, the time is ripe for a big change. Not only will this change create a modern and reliable transportation network in the Untied States, it will provide tens of thousands of good new jobs and help stimulate the sluggish economy.

I pledge to continue fighting for the development of a modern high- speed rail system connecting the major cities across America, and I ask all my colleagues to support making this vision a reality.