A bill to suspend temporarily the duty on neopor expandable polystyrene.

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I will in a period of time offer an amendment with my colleague, Senator McCain, dealing with a select committee of the Senate. We are waiting for Senator Dodd, and as soon as Senator Dodd arrives I will relinquish the floor so he might proceed.

As we are waiting, I wish to commend my colleagues, Senator Isakson and Senator Conrad, on the legislation they have introduced dealing with a commission. The formulation of a commission seems to me to make some sense.

I offered something called the Taxpayer Protection Act in late January of this year. One of the five provisions of that act called for the creation of such a commission. Frankly, Senator Isakson and Senator Conrad have substantially improved on that idea. Their amendment is very well done. It is something I very strongly support and I think will advance the interests of the Congress and the American people in trying to understand what exactly has happened here.

I do want to mention that the amendment I will offer following a discussion in a few minutes by Senator Dodd will be an amendment that relates to S. Res. 62, a Senate resolution Senator McCain and I jointly submitted about 2 months ago calling for the creation of a select committee to investigate, through the use of subpoenas and other approaches, the narrative of what has happened. While I think a commission is valuable in making recommendations, having some of the best minds around the country serving on an independent commission, I also believe there is a responsibility in the Senate for a select committee of the type that has existed in history on a number of occasions to do the work to understand what is the master narrative here, what has happened to cause this unbelievable financial crisis. I will talk more about the

issue and the need for the establishment of a select committee when I introduce the amendment, but for the moment I wanted to say a couple of things.

One, I believe this issue of a commission that my colleagues have advanced is something very worth supporting. Both my colleagues, Senator Isakson and Senator Conrad, have done a lot of work on this, and it is very good work and it deserves, in my judgment, our support.

I also want to say, in the context of these discussions, that before our colleague, Senator Dodd, who is coming to the floor in a bit, and who is chairman of the Senate Banking Committee, now lies the task of trying to put together the pieces of this puzzle and to find out how all of this works. He has done an enormous number of hearings. What Senator Dodd is doing in these hearings in the committee and under his leadership is trying to figure out how do you lift this country out of the ditch? How do you put this system back together? How do you fix what is wrong in this banking system? How do you put the pieces together so they fit and represent the public interest so this doesn't happen again?

Senator Dodd has done so many hearings on this in the recent months. Very few Members of the Senate, I think, understand the hours it has taken Senators Dodd and Shelby, leading that committee. But I must say again, they are forward looking to try to figure it all out. This country is in a huge hole. We have a banking system in chaos. We have a financial crisis. How do you get out of this hole? How do you lift this country? How do you put the pieces back together? How do you fix what is wrong in order to make it right so we can provide for recovery in this country?

I want to say again that our colleague, Senator Dodd, and let me also say the ranking member of that committee, has an enormous burden. Under Senator Dodd's leadership, I think they have done an extraordinary job and they are at that work even today as I speak.

As we talk here on the floor about these issues, I don't want anybody to misunderstand the responsibilities of the committee and what that committee is trying to do. I don't serve on that committee, but we have some awfully good Senators who do--Republicans and Democrats--and we have a good chairman--who are all trying to figure out how you put this together going forward.

You know, this country has not seen this kind of financial collapse for a long time--the first time in my lifetime, certainly. It is a collapse of the sort that harkens back to the Great Depression. And the question isn't whether this country will recover--it will. This is a great country, very resourceful, and full of great people who want to lift this country up. We need to do that work together. The question isn't whether; the question is when and how we will effect this recovery. And that is part of what all of us are grappling with, most notably, of course, the Senate Banking Committee. The discussions that are underway this afternoon are discussions about a commission, a committee, and so on. They are very important.

Let me make one other point. The legislation that is the subject of amendment is legislation brought to us on a bipartisan basis by Senator Leahy and Senator Grassley and others. That is a piece of legislation that is very important as well, and I will speak more about that at some later point. But the underlying legislation is another piece of trying to grapple with something that should never have happened but now must be fixed. They are talking about providing the resources necessary for the investigators, for the prosecutors, for the law enforcement functions that need to be exercised here to find accountability--who did what. We don't know.

It is interesting, there are a lot of things that have caused us problems and that steered this country into a financial ditch--a lot of them. Debt, deregulation, and dark money are just three, and I could describe all of them at great length. But our colleagues, Senator Leahy and Senator Grassley and others, on a bipartisan basis, are bringing something to the floor that says let us have the resources to go after some of these kinds of practices.

Let me show you something. I went to the Internet today. This is on the Internet today. This is an advertisement: You want to get a loan? These folks want to give you a loan. It is called speedy bad credit loans. Isn't that unbelievable? With all this country has faced, you can go to a company called speedybadcreditloans.com. You have bad credit? They say that is okay. You have no credit? Well, that is OK too. If you have been bankrupt, that is no problem. Come to us, we will give you some money. These are the same shysters who have been involved in this and who ran this country into the ditch.

I was wondering if I should spell that word. Maybe I shouldn't have used the word, but the fact is it is the same kind of folks who ran this country into the ditch in the first place by putting out subprime mortgages and saying: If you have bad credit, come to us. No credit, slow pay, no pay? Come to us. Doesn't matter. We want to give you some money. It is unbelievable to me.

So here on the Internet today--bad credit mortgage, no credit, bad credit, bankruptcy, no downpayments, no delays. You certainly don't need delays if you don't have a good credit rating. You want to get some money from somebody? By the way, these folks are making a fortune. They put money out there on the street and then they would securitize it, pass the risk on up, and everybody was making a bunch of money.

My colleagues, Senators Leahy and Grassley and others, are saying: You know what, the resources needed to go after these kinds of people and prosecute this bad behavior and hold people accountable, those resources need to be passed by this Congress. And I agree with that.

Here is another on the Internet today. CC&G Financial Group working together to build your dreams. Bad credit? Poor credit? We can get you in your dream home. In fact, we will finance the current home that you have. Isn't that something? CC&G Financial Group says, you have bad credit? You have poor credit? Hey, we have a deal for you. Borrow some money from us.

Let me tell you the little trick these folks have been doing. They put you into a mortgage with a teaser loan. They say: You know what, you are paying way too much on your monthly payment. We will give you a loan with a 2-percent interest rate. We can cut that monthly payment by hundreds and hundreds of dollars a month. Oh, they don't tell you that it will reset; and yes, that 2-percent interest rate that gets that payment way down in about 2 or 3 years will reset to 10 percent or 12 percent, and then you won't be able to afford to make the payment. And by the way, we will lock in something called a prepayment penalty-- which you will never hear about. It means you can never repay it.

Now, why do they do that? So they could pack these up like sausages. They used to pack sawdust in sausages for filler. They would pack them up like sausages with sawdust, and then slice them and dice them and sell them as securitized loans. And they say to these hedge funds, investment banks, and others that wanted to buy all this nonsense, all this investment trash, they would say, we have a good deal for you. We have a bunch of loans in here with prepayment penalties, so they can't get out of it, and by the way, the yield is good. All these smart people in the room didn't understand that nobody was going to be able to repay those loans.

They also say: Do you want a loan with no documentation of your income? It is called a no doc. No documentation. We will give you a loan on your home and you don't even have to document your income. We don't care. No doc. You want a loan you don't have to pay any principal on, just the interest? If that is not good enough, you can't pay the interest even? We will do this for you. You don't have to pay any principal, or all the interest. We will wrap it around the back side of the mortgage. Or even better, we don't have to document your income, you don't have to pay any principal, any interest, and we will make the first 12 payments for you.

That is how lucrative this business was. You got bad credit, can't pay your bills, are you a bad risk? Come to us. The biggest mortgage company in the country--Countrywide Mortgage--here

is what they said--the biggest mortgage company in the country. And by the way, they went belly up, and the folks at the top of that company went home with hundreds of millions of dollars--hundreds of millions of dollars. Here is what the biggest mortgage company in the country said in the middle of all this. They said: Do you have less than perfect credit? Do you have late mortgage payments? Have you been denied by other lenders? Call us. We consider you a buddy, because we can make a bunch of money off of you.

Well, Mr. President, I will discuss more about this later. I have been waiting for my colleague from Connecticut, who I indicated was on his way, and I wish to yield the floor now, and following my colleague's presentation, at that point I wish to offer an amendment with my colleague from Arizona.

Would the Senator yield on that point?

We are not on opposite sides, necessarily. I said I support the Isakson-Conrad-Dodd Commission; I don't think it is a case of either/or. I think it is a case where both are necessary. But I wish to make the point I am not at odds with my colleague from my State or Senator Dodd or Senator Isakson on this issue.

Mr. President, I, too, rise in support, as I have indicated earlier, in support of the proposal that was offered by my colleagues, Senator Isakson, Senator Conrad, Senator Dodd. I think it is a worthy thing. As I indicated, I offered a Taxpayer Protection Act in late January that included a commission involved in that 5-step proposal. But I think they have dramatically improved on that. I think this bill they have offered is one worthy of support, and I certainly support it. I think an outside commission makes a great deal of sense.

But as I indicated, it is not either/or. It cannot and should not be either/or. This notion that somehow this is too much politics in the Congress to be evaluating what has happened here and what you need to do about it--I don't know. John F. Kennedy used to say that every mother kind of hopes her child might be able to grow up to be President, as long as they don't have to be active in politics. Oh, yeah? Politics is what we do. The political system is the system in which we make decisions. I happen to agree--the New York Times wrote a piece about this, and I agree with it fully:

The investigation should not be performed by outside

experts . . . whose report the Congress is free to accept or

reject. It should be a part of the Congressional process and

include an investigator with subpoena power and the right to

participate in the questioning of witnesses, as well as to

prep lawmakers for the hearings.

Let me make this point. This is not either/or. I support this Commission. This Commission makes sense. My colleague from Georgia is here, and I wish my colleague from North Dakota were here because, as I read the proposal of theirs, they have done some good work. I strongly support it.

But let me make this point. In addition to an outside commission taking a look outside of this institution, it is this Congress that has offered up $700 billion of funding to the Secretary of the Treasury. That is what this Congress has done: Here is $700 billion. We are the ones who appropriate the money. Accountability exists to do what is necessary to find out what has happened, to do the master narrative of what has occurred here and what are the things we can and must and should learn from that.

Let me describe a select committee. Let me describe a committee in 1940 named the Truman Committee. Harry S. Truman on the floor of this Senate, with a member of his own party in the White House, said there is unbelievable waste and fraud going on in defense spending and we ought to investigate it. They investigated for 7 years with a special committee. They did 60 hearings a year. Think of that. The committee spent $15,000 to be created and saved the taxpayers $15 billion over 7 years.

What an unbelievable value that was for the Senate to have done, the Truman Committee. In fact, you know, I spoke a while back to Herman Wouk, one of the great authors in America, the author of ``War and Remembrance'' and so many other great works. He is in his nineties, one of America's great authors. He is still writing, by the way.

One of the things he talked about, he said, I do not know a lot going forward, but I know from about 1950 back, 1945 back.

He talked about the Truman Committee as a part of the history of what the Senate has done in the middle of the Second World War, a special committee established by the Senate, the Truman Committee, bipartisan, subpoena power, 60 hearings a year, 7 years. Saved the taxpayers $15 billion, we are told.

Well, you know, I am on the floor with my colleague from Arizona, Senator McCain, because both of us believe there is a requirement for a select committee in this case. The Truman Committee, Kefauver Committee on Organized Crime, Church Committee, Kerry-McCain on POWs-MIAs I mean there have been a lot of examples of committees that have done some extraordinary work here on very big issues.

I said before my colleague from Connecticut came in something that will embarrass him, I am sure. I said the Banking Committee with my colleagues Senator Dodd and Senator Shelby is doing extraordinary work that most of us are not aware of, because we are not sitting over there hour after hour after hour trying to put together the notions of what are the solutions to get us out of this ditch.

The Banking Committee has done extraordinary work and continues to do it and will be required to do that for months now to try to lift this country. So my hat is off to the work of Senator Dodd, the leadership he offers us, and all of those who are working on the Banking Committee. This proposal for a select committee is not a reflection on their work at all.

But I would say this: There is not one committee in the Congress-- that includes the Banking Committee--there is not one committee here that has anything more than three or four or five investigators at best. No committee has the capability that ought to exist and ought to be required to discharge the responsibilities that fall on the shoulders of this Congress and this Senate, in my judgment.

I know the Speaker of the House last week talked about a Pecora committee. In fact, they called it a Pecora Commission. Pecora, that was not a select committee, but that was right after the financial collapse and the Great Depression. He held a lot of hearings, a lot of hearings. He was I believe the chief counsel to the Senate Banking Committee. History records the Pecora committee or Commission, the Pecora effort. We remember it in 2009 it was so significant, because he was looking back.

Senator Dodd does not have that luxury at the moment. We have got to look forward and lift this country up and put the economy back together. And we have got to do it in a hurry. We do not have 3 years or 5 years. We have got to lift this country out of this ditch. This is a financial crisis unlike anything we have seen since the Great Depression. So they do not have a lot of luxury over in the Banking Committee to say, you know what, we are going to spend a lot of time looking in the rearview mirror. But I will tell you this: If we do not fully understand the narrative of what has happened here, we are destined someday to repeat it. We are destined to allow it to happen again.

I said this, and this relates to the underlying bill on the floor that Senators Leahy, Grassley, and others have brought here. Go to the Internet today and take a look at this. This is one. I could have brought many. This is a company who says--it is called speedybadcreditloans.com.

After all we have faced and the financial collapse and the subprime loan scandal, with a bunch of bad actors leaving with hundreds of millions of dollars of ill-gotten gains and leaving victims in their wake all over this country, massive foreclosures and the financial collapse--after all of this, go to the Internet today, and find a company that is called speedybadcreditloans. They say on the Internet: Do you have bad credit? That is okay. Do you have no credit? That is all right. Do you have bankruptcy? No problem. Come and get a loan from us. Is that unbelievable? Just unbelievable.

There is one more, CC&G Financial Group. If you have bad credit, you got poor credit--I could do 40 of these, by the way--come to us. We can get you into your dream home, by the way. They say: With all of these values due to foreclosures and short sales, now is the time. Got bad credit, got an appetite to get a new home.

I wonder if they are doing what those mortgage companies did that steered us into the ditch to say to potential borrowers: Hey, come over here. You are paying $700 a month house payments. You know what, we will give you a mortgage to pay $200 a month. Why should you pay more than triple what you ought to pay? You get a mortgage from us, $200 a month. Oh, by the way, you do not even have to document your income. We do not care. We will charge you an extra quarter percent, but you do not have to document it. Well, maybe 2.25 percent will be your new mortgage, maybe $210 a month. We are going to put a little deal in there, it is going to reset in 3 years, it is going to be 12 percent. That may be a problem, but do not worry, that home value is going like that. You can sell it if there is a problem. But we are going to allow that to reset. And we are not going to mention this to you. We are going to put a prepayment penalty in it so you cannot get out of this.

Then what we are going to do is we are going to wrap it into a big piece of sausage, like they used to fill sausage with filler. Then we are going to chop it up and we are going to sell it. We have got hedge funds and investment banks that are yearning for these kinds of instruments. So we sell the risk. I am a big old mortgage company that advertises: We want bankrupt people to come to us. We want people with bad credit to come borrow with us, because, you know what, we are not going to sit across the desk and look into their eyeballs to see whether they can repay this loan. No, we are not going to do that. We are going to sell the risk. So we do not have to do what is called underwriting. That means sitting across the desk, and the lender evaluates whether the borrower can actually repay it. It is the old way you used to do things, not the modern way. It is the old way. You do not have to underwrite if you are going to sell the risk. In fact, sell it two or three times.

Then, by the way, when someone is being foreclosed upon, the new technique is to say in court: Show us the original mortgage. And they are having a devil of a time trying to find an original mortgage because it has been sold upstream. Disconnect the borrower and the lender from the risk--well, not the borrower, but the lender from the risk. And meanwhile they are all making massive amounts of money.

You know, the year before last, I looked up to see who was the biggest income earner in the country in the middle of this unbelievable avalanche of financial good news. Who earned the biggest income in the country, individually?

Well, a guy who ran a hedge fund earned the biggest income, $3.6 billion. Now, that person earned in 3.5 minutes what the average worker in America earned in a year. When that person comes home and says: I had a pretty good day, and the spouse says: Well, honey, how are you feeling?

Well, I made $10 million today.

Mr. President, $10 million every day. How is it that people were working those kinds of stratospheric incomes, $3.6 billion, or even much lower, a CEO from one of the biggest mortgage banks in the country that went belly up, and he left with a couple of hundred million dollars, much lower income? How is it they ended up with all of this money? They ended up with all of this money by creating all kinds of fancy instruments and getting payments by moving all kinds of money around and a lot of victims in their wake. So the question is, what do you do about all of this? Well, the first thing to try to understand here is what has happened. I am talking now about subprime mortgages.

But you know what, that is one piece. It is like a book with several chapters, many chapters. It is one piece. But I am describing how unbelievable this piece is. So the question is, what do we know at this point? What really do we know about what has happened that has caused this collapse?

I talked about dark money a bit ago. Debt helped cause this collapse. Some of that is here. Federal budget debt. Federal trade debt, by the way, $800 billion a year trade debt. That is money we owe to other countries, $800 billion a year.

So debt, part of our responsibility. Somebody said to me, well, it is the Federal Government that is spending more than it has. I said: Oh, really, have you taken a look at credit card debt and household debt? Doubled in a reasonably short period of time. Corporate debt. Take a look at household and credit card and corporate debt. Dramatic increases. Take a look at Federal debt by the Congress. Substantial increases. Trade debt. Debt is a problem. We know that.

Deregulation. You decide, you know what, we are going to loosen the rules and not look. We will hire regulators who want to boast that they do not have the foggiest interest in seeing what is happening. Boy, that is a recipe for disaster. And yet that is exactly the case. Dark money, all of this money.

Did anybody know I wrote a piece in 1994, 1994, that was the cover story for the Washington Monthly magazine? My article was the cover story for the Washington Monthly magazine 15 years ago that was titled: ``Very Risky Business.'' It was about the notion that at that point there were $40 to $50 trillion dollars of notional value of derivatives in this country. So there is a lot to discuss about the narrative of what has happened with this financial crisis. Some take the position that we should do only a commission and they oppose a select committee of the Senate. I support a commission because I think that would provide another view, another way of outside experts. I think as I said before my colleague from Georgia came in, Senator Isakson and Senator Conrad have produced a piece of legislation that I think is very smartly done, very well crafted, makes a lot of sense. I stand here to strongly support it.

But I disagree with my other colleague who seemed to suggest that it is an either/or. Doing an outside commission does not absolve the responsibility of the Congress, in, I think, one of the most significant and momentous events of our lifetime, that is, the financial collapse that has, at its root, so many different causes.

It does not absolve us of the responsibility to do what is necessary to investigate that cause, understand it, and make sure it can never happen again.

Again, let me read from the editorial I started with from the New York Times:

Investigation needs to be a part of the Congressional

process, and include an investigator with subpoena power and

the right to participate in the questioning of witnesses, as

well as to prep lawmakers for the hearings [and so on.]

We have done that in the past with the Watergate hearings. We have done it in the past with the Church hearings. We have done it in the past with the Truman Committee, which I think is a shrine to what this Congress can and should do when it puts its mind to it.

If we decide we cannot do it now and should not do it now, we will have missed a very significant opportunity, and we will have abrogated a significant responsibility of this Congress. It is our job as well. So I stand here to say, I strongly support the commission proposal. We will vote for it. I am very pleased my colleagues have offered it.

But I also believe, as Senator McCain does, that there is more to do and there is a responsibility that cannot be delegated. And that responsibility that cannot be delegated is our responsibility to empanel a select committee to do what is necessary to investigate from the standpoint of the Congress what has happened to cause this very substantial financial crisis.

I ask unanimous consent to lay aside the pending amendment, and I offer the amendment I have described.

Let me withhold my request.

I will withhold that request for a moment. While I am waiting, let me say that the underlying bill we are dealing with is a piece of legislation that will address the opportunity to prosecute, which is another issue, prosecute wrongdoing and illegal behavior and some of these financial shenanigans that we have seen and that I have discussed.

The underlying bill as well as a piece of legislation is something I would strongly support.

Mr. President, I ask unanimous consent that the pending amendment be set aside so that I can offer an amendment.

Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. President, I have spoken on this amendment previously. I have spoken of the underlying bill Senator Leahy and Senator Grassley and others have brought to the floor and my admiration for that bill. That bill falls right in with what the responsibility of the Senate should be at this point. I commend them for that. It is not my intention, nor would it be the intention of my colleague, Senator McCain, as we offer this amendment to in any way interrupt the legislation on the floor. We believe our amendment enhances it.

Second, let me say to my colleague, Senator Dodd, the chairman of the Banking Committee, I have spoken at length about what they are doing to try to put the pieces together to lift this country out of the ditch and try to figure out how to put this financial system together in a way that makes it work again.

Having said all of that, I indicated earlier that I offered an amendment with my colleague, Senator McCain, that would establish a select committee of the Senate, in the tradition of the Truman Committee and the Watergate Committee and other select committees, to try to do a narrative of what has happened with respect to the financial crisis. I believe that a commission is fine, but we cannot delegate all responsibility. There is a responsibility for Congress to do comprehensive oversight on this issue, which I think is the largest financial issue we have faced--the financial crisis, the financial collapse--since the Great Depression.

I am happy to yield.

Mr. President, I would certainly agree with that. It is a fair request. Let me finish so my colleague, Senator McCain, can say a few words as well.

This amendment doesn't do a disservice to the underlying bill. It is exactly in the tradition of what the Senate ought to do. We cannot delegate the responsibility. This financial crisis has imposed an enormous burden on this country. All of us hope and pray that we can lift this country out of this difficulty. We are all working to do everything we can.

Do you know what. We need to understand what is the dimension, the narrative of what happened, what caused all of this, and make sure we put into place things that will prevent it from happening again. That is our responsibility. In the grand tradition of the Senate of select committees on big issues, this ought to be a bipartisan select committee with subpoena power to understand what happened and to make sure it can never happen again. That is why I have offered this with Senator McCain.

I have one final point. I hope we will be able to get you to take this without a recorded vote. Maybe only one person in the Senate has suggested maybe a recorded vote is necessary. We can talk to this person, and we can talk to that person. Whatever the request will be by the chairman, I will be amenable to it.

I yield the floor so that my colleague from Arizona may speak.

Mr. President, let me just make another brief comment about the amendment that is pending. I will be mercifully brief. I mentioned earlier the grand tradition of the Senate, as demonstrated by the Truman committee, Harry Truman, a former Member of this body, who had a select committee established in 1940 to investigate waste and abuse and fraud with respect to defense contracting. When I talked about the Truman committee, I said I had talked to one of America's great authors, Herman Wouk. I mentioned his book, ``War and Remembrance.'' He also wrote ``Winds of War'' and ``Caine Mutiny.'' He is an unbelievably wonderful man who is now 92 or 93 years old. I had the opportunity, last year and the year before, to visit with him. He is still writing; he is writing a new work. He talked about the Truman committee. He said something interesting because he wrote so much about especially the Second World War.

He said, ``I don't know much beyond 1945, but I know everything just before 1945.'' He put it in his wonderful books. Then he talked about the contracting going on in Iraq and the stories of waste, fraud, and abuse--perhaps the greatest waste, fraud, and abuse in this country-- those are my words. He said, ``You ought to create a Truman committee.'' He described to me the select committee headed by Harry Truman.

I went back and read the record of what they did in 1940--Truman with a member of his own party in the White House. He traveled around the country to military installations and met with contractors on military bases, and he concluded there needed to be an investigation. They put together a bipartisan committee with subpoena power. It cost $15,000 to create a select committee and it met for 7 years and held 60 hearings a year and it saved the taxpayers by cutting down on the waste and abuse in defense contracting. They did it in the middle of a war. Think of it.

My point earlier, when I mentioned Herman Wouk, was to describe the Truman committee in the grand tradition of what the Senate can do when it should do what is necessary to make certain that the economy works and the taxpayers' money is spent effectively. So now we find ourselves in a circumstance unlike any we faced in my lifetime--an unbelievable financial wreck that has occurred. The victims of that wreck are all over. We have lots of folks--millions--looking for a job.

Can you imagine one person coming home--just one--saying: Honey, I have lost my job today. I worked there for 20 years, and I have done a good job. It is not my fault. I have tried hard, but I don't have a job anymore because I was told they are laying off at the office or plant. Think of that conversation--to tell the kids that dad or mom doesn't have a job anymore. Not just one time or 100,000 times--think about the millions of times that it happened in recent months; 3.6 million people since the recession began have had to come home and say: I have lost my job.

These are people who want to work. It describes why it is so important for an economy to expand and lift opportunity in this great country.

We have been blessed for a long time. It is not some inherent right of ours to live in an economy that grows in an unrelenting way. That is not an inherent right. This economy will grow and will produce expanded opportunities for the American people if we do the right things. We have been through a period where a lot of people in very important positions did a lot of wrong things, trading a lot of paper that didn't have any value at all, making money on both sides, buying things they never had from people who will never get it, and making money on both sides of the trade. That is not real finance. That is not real investment, real productivity. That is a paper economy that is built on speculation and is destined to come down.

I described a while ago just the subprime loan scandal. That is just a part of it. I described it, and it almost makes me sick to see the greed and avarice that existed under the name of responsible business. Shame on all of those people who were making a lot of money. They were making so much they could not count it, and they were leaving victims in their wake. They created this circumstance where the economy collapsed.

Our job is to find out what happened and try to lift it back up. You have to put the pieces of the puzzle together and decide and understand what happened. We owe it to ourselves and the American people to understand all of what happened to make sure we never allow it to happen again.

We cannot delegate that responsibility. I supported the commission, and I complement my colleagues who offered it. Having an outside group of experts to look at this and make recommendations, that makes sense. But we cannot delegate our responsibility. It is our responsibility. That is why this amendment I have offered with Senator McCain is so important.

Finally, the underlying bill to which we are talking about amendments is so important because it is part of the solution--to say those folks who have been doing those things--there has to be a responsibility and funding for prosecutors and investigators to get to the bottom of that and make people accountable for the actions and behavior that steered the economy into a ditch.

I have great hope for the future of this country if we do the right thing. I believe we can. The step offered by Senator Leahy is a step in that direction.

I yield the floor.

Mr. President, 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 understand the distinguished Senator from Pennsylvania is about to come to the floor. As each of us probably have times we are going to have to be on and off the floor, I am going to begin my comments now.

I said Monday at the outset of this debate on the motion to proceed to the fraud enforcement bill that I hoped the objection to proceeding and any filibuster effort against this bill would be short lived. I am glad to see that cooler heads have prevailed. That actually happens in the Senate now and then.

After being delayed 2 days, we have agreement to turn to the Leahy- Grassley Fraud Enforcement and Recovery Act. I thank the majority leader for his persistence. I regret that the weeks we spent reaching across the aisle for a time agreement on this bill were unavailing. The majority leader was required to file cloture to get us to this point.

We are talking about going after people who defrauded American taxpayers, and the sooner we can go after them, the better we all are. I commend Senators Grassley and Kaufman, Klobuchar, Dorgan, and Shaheen for their statements to the Senate on Monday in support of this fraud enforcement bill. Their strong statements no doubt contributed to the reversal of the position that now allows us to proceed to what is a bipartisan fraud enforcement bill. In total, six Senators spoke in favor of the bill on Monday and no one spoke against. Each of us who spoke on Monday is a cosponsor. The bipartisan group of 16 Senators who have cosponsored this bill include, Senators Schumer, Murray, Bayh, Specter, Snowe, Harkin, Levin, Whitehouse, Rockefeller, and Sanders.

On Monday, as the Senate debated the motion to proceed to the Leahy- Grassley fraud enforcement bill, the Obama administration issued a Statement of Administration Policy on the bill.

I ask unanimous consent to have a copy of the Statement of Administration Policy printed in the Record at the conclusion of my statement.

This statement begins:

The Administration strongly supports enactment of S. 386.

Its provisions would provide Federal investigators and

prosecutors with significant new criminal and civil tools and

resources that would assist in holding accountable those who

have committed financial fraud.

I thank the President and the administration for their strong support.

The statement continues:

[The] legislation would benefit U.S. taxpayers by both

addressing existing fraud and deterring waste, fraud and

abuse of public funds.

That is something we all should be in favor of. They went on to add that it ``would provide needed resources to strained law enforcement agencies.'' Of course, pointing out what we all know, these additional resources will far more than pay for themselves through fines and penalties, restitution, damages, and forfeitures.

But there is more of a human thing in here. We have families losing their homes, defrauded, and losing their life savings. People are defrauding them and getting away with it. I want to not only get the people who did it, but I want to deter others from doing it in the future.

I said on Monday that the Justice Department and the FBI, the Secret Service, the special inspector general for TARP, law enforcement officers, and many good-government advocates supported the bill.

As we continue our debate, I ask unanimous consent to have printed in the Record at the conclusion of my statement a number of editorials and news articles favorable to the legislation.

Just this weekend, the New York Times wrote that fraud enforcement must be one of our priorities as we rebuild our economy, not only to hold accountable those who committed fraud and contributed to these hard times but to protect our efforts to stabilize the banking system and to jump-start the economy. They wrote:

While Washington is spending billions to shore up the

financial system, it is doing far too little to strengthen

the federal government's ability to investigate and prosecute

the sort of corporate and mortgage frauds that helped cause

the economic collapse.

Those efforts--never fully adequate--have suffered in

recent years as money and people were shifted from white-

collar fraud to anti-terrorist activities.

That is precisely what law enforcement officials from the Justice Department and the FBI and the special inspector general for the Troubled Asset Relief Program told us in their testimony before the Judiciary Committee.

As the Times wrote, referring to the Fraud Enforcement and Recovery Act:

A bipartisan measure newly approved by the Senate Judiciary

Committee and now coming before the full Senate would begin

to close the enforcement gap . . . and strengthen existing

federal fraud and money-laundering provisions, updating the

definition of ``financial institution'' in federal fraud

statutes to include largely unregulated mortgage businesses,

for example, and reversing flawed court decisions that have

undermined the effectiveness of the False Claims Act, one of

the most potent weapons against government fraud.

Like a similar enforcement buildup in response to the

savings and loan crises of the 1980s, this one will

contribute far more than it costs to the federal Treasury

through restitutions and asset recoveries. . . .Senators

should not be asking if the expenditure is affordable, but

whether it is enough.

Every prosecutor I have talked to says they need this. I am willing to bet that every person who has been defrauded by some of these unregulated mortgage companies would give anything to have had this on the books and these people there 6 months or a year ago before they lost their life savings, before they lost their homes, their chance for their children to go to college, and before they lost the chance for retirement. But there are still millions of Americans at risk. Let's protect them. Let's show that we are against such crime and that we will provide the tools to stop it.

One of the things every prosecutor knows and learns is, if you ask people if they are against crime, everybody is against crime. If you ask legislative bodies: Are you willing to pass resolutions against crime, of course they are. But then you ask the real question: Will you give us the tools to fight crime? That is where everybody goes: Well, let's see.

Here are the tools to fight crime.

This is something supported across the political spectrum. Look at the Washington Times, a very conservative newspaper. They raised very similar concerns about the need to fight fraud and protect the taxpayers' money being spent on the economic stimulus. In an editorial on March 26 entitled ``Stimulus Spending Ripe for Fraud,'' the Washington Times called for fraud enforcement. In commenting on an Energy Department official who was concerned with waste, fraud, and abuse in stimulus funding, they wrote:

The same attitude must be adopted by all agencies

overseeing the implementation of the massive spending

measure.

Well, they are right. They went on to say that simply having a Web site to provide greater transparency, while a good thing, is not enough. They said:

[E]ven an unprecedented level of post-spending transparency

will do only so much to ensure waste is kept to a minimum. .

. . It will take more than a new Web site and the sort of

staff training the administration has implemented to turn an

understanding of the problem into real accountability. . . .

The administration is, in fact, doing more than creating the most transparent Government in history. They are supporting this bill and its aggressive response to fraud enforcement. The bill will actually translate rhetoric into reality, a reality that can save billions. It is just the kind of action these editorials from the right to the left have asked for.

Look at a front page article of March 12, entitled ``Financial Fraud Is the Focus of Prosecutors.'' The New York Times reported that fraud was surging, particularly mortgage fraud cases.

It is very interesting. We talk about tough enforcement. The chairman of the House Banking Committee said, ``Rules don't work if people have no fear of them.'' Anybody in law enforcement can tell us that. Every State has laws against burglary, for example. But put two warehouses on the same street, one with a rusty lock on the door and no alarm system, no lights, one with a state-of-the-art alarm system, lights, the ability to call police immediately, and which one gets broken into? The law is the same. You are going to break into the one that is easy. You can have all the laws in the world on mortgage fraud, and if people think they are not going to be enforced, they are going to break those laws. If you believe the worst that will happen is you might get a fine, if you have a $100 million fraud operation going and you might get a $5 million fine, gee-whiz, that is the cost of doing business. If you find out, however, that you might go to prison, that in all likelihood you will go to prison as well as losing the money you defrauded from people and allow that money to go back to them, then you are going to think twice.

Neil Barofsky, the special inspector general for the Troubled Assets Relief Program, issued a 250-page report warning yet again that the bank bailout funds are particularly vulnerable to fraud. He talked about protecting American taxpayers. He testified about similar concerns when he appeared before the Judiciary Committee in support of the bill.

Strengthening fraud enforcement is a key priority for the President. During the campaign, President Obama promised to ``crack down on mortgage fraud professionals found guilty of fraud by increasing enforcement [but also] creating new criminal penalties.'' The President, in his budget to Congress, called for additional FBI agents ``to investigate mortgage fraud and white collar crime,'' as well as hiring more Federal prosecutors and civil attorneys ``to protect investors, the market, and the Federal Government's investment of resources in the financial crisis, and the American public.'' Additional money was included in the initial recovery package for the FBI, but it was cut out during negotiations that led to its passage. This bill is our chance to authorize the necessary resources.

I can't state enough, it is not enough to have a law on the books that says: Thou shalt not commit crime. It works only if people think they are going to get caught and they are going to lose the money they have stolen and they are going to go to jail on top of that. As long as people carrying out these frauds and these scams think they will never get caught, will never get prosecuted, the laws aren't tough enough, they are in an unregulated industry, nobody is going to go after them, why not keep trying. The worst that could happen is somewhere along the line you might have to give a little bit of the money back and keep scamming people, keep ruining people's lives, keep taking people's homes away from them, keep taking people's retirement accounts, keep taking the money they have saved for their kids to go to college. If all you think you might get is a little slap on the wrist or in all likelihood you will get away with it completely, what is to stop you?

Obviously not a sense of morality, as we saw with Bernie Madoff and others. We have to have laws to stop them. We have to have enforcement of the laws. We have to have people go to prison for stealing retirement accounts and stealing children's money being saved for college and stealing homes through mortgages scams. We should pass this.

I see the distinguished Senator from Pennsylvania in the Chamber. He is a man with a distinguished career, first as a prosecutor before he came here and now a man who has been both chairman and ranking member of the Senate Judiciary Committee. He understands this.

I yield the floor.

Exhibit 1

Statement of Administration Policy

Well, Mr. President, I suspect my experience is probably similar to that of the distinguished Senator from Pennsylvania. Fines, especially in these commercial fraud type things, were seen as the cost of doing business. If you steal $100 million, and you get a $5 million fine, then you stole $95 million. But if they think they are going to go to prison, that is when they think twice. We saw this after Enron and other things that when people actually believe they are going to go to prison, then they start thinking twice.

I am sure this was the experience the Senator from Pennsylvania had. It is the experience I had. Nothing focuses the attention of somebody who is going to want to defraud someone if they think they are going to spend years in a tiny cell. That focuses their attention, and suddenly it is not worth the effort. That is what we want to do here because the people who are being defrauded are the most defenseless. They are the people who have lost their retirement. They are the people who have lost their homes. They are the people who have lost the ability to pay for their kids to go to college.

The Senator from Pennsylvania is absolutely right.

(Mrs. GILLIBRAND assumed the chair.)

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

Madam President, I understand there is a pending amendment?

I ask unanimous consent that the pending amendment be set aside and it be in order for me to send an amendment to the desk.

Madam President, I send to the desk an amendment on behalf of myself and Senator Grassley. I ask for its immediate consideration.

I ask unanimous consent that the reading of the amendment be dispensed with.

Madam President, I rise to explain what this is, and then I will try to schedule a vote on the Kyl amendment and the Grassley- Leahy amendment at some time, I hope in the next few minutes.

As we begin consideration of the bill, Senator Grassley and I are offering a brief managers' amendment. I was just explaining for everybody that it makes two simple technical changes in the bill in order to clarify the original intent of the bill and in order to avoid any ambiguity in the statutory language. It makes sure the bill extends the major fraud statute to all the funds being expended to stabilize and strengthen our banking system.

The original language in the bill amended the major fraud statute to protect against frauds related to many Government economic recovery programs, including the purchase of ``preferred stock in a company'' by the Government as part of our efforts to stabilize banks. The Justice Department advises that this language may be too narrow, as recovery efforts may include purchases of other types of stock or other troubled assets. So the Justice Department, which supports the Leahy-Grassley bill, has requested that the reference to ``any preferred stock in a company'' be replaced with the phrase ``any troubled asset as defined in the Emergency Economic Stabilization Act of 2008.'' This simple change will make clear that all troubled assets purchased by the Government as part of the recovery effort will be covered under the major fraud statute. This change is consistent with the original intent of the bill and simply provides greater assurances that taxpayers' money will be protected to the full extent of the Federal law.

Second, the amendment strikes five words in the bill that could create unintended ambiguity in the statute and could be used to limit the effect of the bill. The phrase ``for such property or services'' appears in the original statute as a modifier of the kinds of contracts or subcontracts covered by the major fraud statute. With the changes included in the bill, the language is no longer applicable because the transactions involved in our efforts to stabilize banks include grants, loans, and purchases of assets that may not legally be characterized as ``property or services.'' If this phrase remained in the statute, it could be used improperly to limit the scope of the major fraud statute and undermine the intent of this legislation, which is to cover all of the Government's efforts to rebuild our economy and restart our banking system.

Frankly, when we send prosecutors out to get people for defrauding Americans, I don't want to have something unintentionally in the statute which may limit the ability of prosecutors to go after those who are defrauding Americans.

These changes that have been requested and supported by the Justice Department have the full support of Senator Grassley, the lead Republican cosponsor of this bill and the Republican manager for this bill. All Senators should support this bipartisan managers' amendment which should protect our efforts to strengthen the banking system and restart the economy.

What I am going to do, Madam President, I am going to suggest that when Senator Kyl gets here and Senator Grassley gets back to the floor, we accept this managers' amendment--I think it is noncontroversial--and that we then have a vote as soon as he has had a chance to say what he would like to on the Kyl amendment. In the meantime, we will leave the managers' amendment the pending amendment just so Senators then can understand, if we can work it that way, hopefully we will have a vote relatively soon.

I suggest the absence of a quorum.

Mr. President, I have been in discussions with the distinguished Republican deputy leader, Senator Kyl. We do not have a formal agreement but what we are looking toward doing, in the next 10 minutes or so, is having acceptance of the managers' technical amendment and then going to a rollcall vote on Senator Kyl's amendment, which I will support.

I suggest the absence of a quorum.

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

Mr. President, I ask unanimous consent to modify the Leahy-Grassley amendment at the request of the Justice Department to add the word ``or'' after the comma at page 2, line 1. I send the modification to the desk.

Mr. President, we have the Leahy-Grassley technical amendment. I ask for its passage.

Mr. President, I move to reconsider the vote.

I believe it would be in order now to bring up the Kyl amendment; is that correct?

I ask for the yeas and nays on the Kyl amendment.

Mr. President, I thank the Senator from Arizona. He worked with me and Senator Grassley. We both support his amendment. I will vote for it.

Mr. President, I have listened to some of the things being said. I agree with the distinguished Senator from Georgia, who said we should find out what went wrong and try to make it right. The distinguished Senator from North Dakota said we should find out what happened and why it happened and make sure it never happens again. And it should be a nonpartisan effort, not finger pointing.

I find myself closely aligned with this. I said the same thing about having an accountability commission on what happened in areas including torture, the OLC memos that twisted statutes and policy, and with White House interference in prosecutions and law enforcement. And I have been making such a recommendation for some time, so that we can find out just what happened. As we now found, opinions were written that were totally contrary to the law. We find such things as the Bybee memo. I hope that Judge Bybee, now that that memo has become public, will do the honest thing, the moral thing, the right thing, and resign from

the bench. We find out about more and more of these alarming issues, but we still do not have all the facts.

I think we should have some type of a nonpartisan commission, as the Senator said--not for finger-pointing, as he said--but to find out what happened and why it happened and to make sure it never happens again. We must find out what happened in order to try to make it right, as the Senator has also said.

I am tempted to offer, as a second-degree amendment to this one, an amendment to include an examination of everything that went on during the last administration with regard to the manipulation of prosecutors, the manipulation of the law, and those who wrote memos saying basically that certain people in the Government are above the law, cannot be affected by the law, and cannot be held accountable to the law. Those individuals even went so far as to say that the President could simply decide the law does not apply to him, which, of course, would be the first time in this Nation's history that any binding Executive branch memo has ever claimed a President has that authority that I am aware of. All the arguments made by the Senator from North Dakota, which I believe were good arguments, could be made, for my commission proposal. On the question of why people decide not to follow our laws, how they convinced themselves to do that, and how they managed to get lawyers to write twisted memos to justify the idea that they did not have to follow the law: we had a certain cadre of such people within the White House and within the administration. And they apparently believed they could automatically excuse themselves from following the law.

As I have said, there is the temptation to offer this as a second- degree amendment. I will not. But I simply point out that if it is applicable here, it is certainly applicable in those areas where people were not just trying to steal money, they were trying to steal the Constitution of the United States. And they are trying to steal the laws of the United States. I think that should be looked into just as much as somebody who might want to steal money from the United States. Money can be paid back and should be paid back. Once you lose honor, once you lose your integrity, once you lose credibility, once you lose adherence to our Constitution, that takes a lot longer to get back.

Mr. President, I suggest the absence of a quorum.

Mr. President, on the particular matter, the distinguished Senator from Arizona and the distinguished Senator from North Dakota have spoken about the jurisdiction of the Judiciary Committee, and I assume the chairman of the Rules Committee will speak about it. I also understand that Senators Schumer and Coburn have amendments. I urge them to come to the floor because there has been a request for a vote on the Isakson-Conrad amendment. I will not make a unanimous consent request at the moment, but it is our intent to have a vote on that around 4:20, 4:30--on the Isakson-Conrad amendment.

I understand, because of budget matters that come up tomorrow, there is an intent to try to finish this bill tonight. We can finish this bill tonight. I hope we could finish it before 6 or 7 or 8 o'clock. Having an Irish father and Italian mother, I come with a hopeful attitude by nature. But I note we will have a vote around 4:30, 4:20 or 4:30.

There are a number of matters. I see the distinguished and able chairman of the Banking Committee here. There are a number of matters within the jurisdiction of the Banking Committee. I will let him speak to that.

I urge Senators who have amendments to bring them to the floor because as soon as we have no amendments apparently here, we are going to try to move to final passage.

I yield the floor.

Mr. President, I ask unanimous consent that the Senate proceed to vote in relation to amendment No. 995 at 4:32 p.m. today and that the 4 minutes immediately prior to the vote be equally divided and controlled between myself and Senator Isakson or our designees; that no amendment be in order to the amendment prior to a vote in relation thereto; and upon disposition of amendment

No. 995, Senator Dorgan be recognized to offer his select committee amendment.

Mr. President, has the Senator from Georgia requested a rollcall vote?

Mr. President, I ask for the yeas and nays.

Mr. President, I yield back all time and ask that the rollcall vote start now.

Mr. President, will the Senator yield?

Mr. President, I appreciate the comments of the Senator from Nevada, the distinguished majority leader. I will stay here for a few minutes, if there are some amendments pending. If there are some amendments pending that we could take by voice vote, I am perfectly willing to do that tonight. If there are rollcalls, if there are amendments people think will need rollcalls, I don't know what time the distinguished leader wants to go back on the bill in the morning, but I would suggest that if we start early on that----

Then if I might further inquire of the leader--and I think that is perfectly fair--I intend that at such time as there are no amendments pending, or no amendments pending that people actually expect to go forward, we will go to final passage.

This is a bill that saves taxpayers' money but more importantly protects a lot of people who are being preyed upon by people wanting to defraud them out of their homes, out of their retirement, out of the money they have saved for their children to go to college. So I think, with what is happening--and it has been proven--all of these frauds that have taken place all over the country, the last thing in the world the American people want to see is us delay it.

I thank the distinguished leader for bringing up this bill this week. It is my intention--my hope, anyway--to have it finished by noon tomorrow.

I would note further to the leader that Senator Grassley, who is not only the chief sponsor, but we have a dozen or so sponsors on both sides of the aisle--Senator Grassley and I worked very closely with a number of Senators to work out amendments. The first amendment we brought up was one we worked on with Senator Kyl on, and I think that passed 95 to 1, or something like that. So we are ready to work with people, but we will finish this bill soon.

Thank you. I yield the floor.

Will the Senator yield for a question?

Mr. President, I understand there is a request for a rollcall on the Senator's amendment. I was not going to ask for one, as he knows. I wonder if he would have any problem with a unanimous consent agreement that when we come back on the bill in the morning, his amendment will be the pending amendment and there be 10 minutes a side, and we then proceed to a vote on it.

I am throwing this out as a suggestion, so my colleagues will hear it. For one thing, rather than spend several hours on the same amendment in the morning, or tonight, perhaps we will be able to do this: I say to the floor staff that this is a unanimous consent request that I will be making. I do not intend to make a unanimous consent request at this time. I will soon make this request.

Mr. President, I ask unanimous consent that on Thursday, April 23, after the Senate resumes consideration of S. 386, the time until 10 a.m. be for debate with respect to Dorgan-McCain amendment No. 999, with the time equally divided and controlled between Senators Dorgan and myself, or our designees; that no amendments be in order to the amendment prior to a vote in relation thereto; that at 10 a.m., the Senate proceed to a vote in relation to the amendment.

I ask unanimous consent to be recognized until Senator Kyl returns to the floor or for a shorter period of time, whichever may be the shortest.

Mr. President, nobody disputes the intent that we ought to go after the fraud that has been associated with the mortgage industry and some of the problems thereof. We passed the stimulus bill that had a lot of money for the Justice Department in it. We didn't tell them they should

use the money on this. We passed an omnibus bill, none of which did we put money in. We put $10 million in for the FBI. Now we come before the Senate wanting to authorize $500 million more for a bill in a department, the Justice Department, that will end this fiscal year with over $2 billion in the bank. Since I have been a Senator, they have had over $2 billion at the end of the year. There is something unique about the Justice Department. The Justice Department is the only Federal agency that doesn't ultimately have to send its unspent money back to the Treasury. They get to keep it.

In a time where we are spending money to the tune of $112 billion a day every day we have been in session so far in this 111th Congress, to say that we ought to send another $500 million to an agency that is going to have $2 billion left over at the end of this year and the next few years to come tells us we are not good money managers, but most of the American people know that already.

On fiscal grounds, what we are doing is, we are authorizing money. And that is what will be the response to this debate: It is just an authorization. The fact is, if you are authorizing, you intend to spend it. You are going to try to get another $500 million appropriated on this bill.

Secondly, we don't have ex post facto laws. So everything this bill does has no application in terms of a statute change to any of the crimes committed, either the fraud or money laundering or anything else. It has no application. None of it will apply to misdeeds and infractions of the law that happened that got us into this crisis.

Additionally, every act that was committed that broke a law under the statutes we have today, both Federal mail fraud and wire fraud, can be prosecuted already. What is going on? What is going on is, we are going to pass a bill in reaction to a problem that Congress created in the first place by incentivizing poor behavior at Fannie Mae and Freddie Mac, by not doing oversight, and we are going to make everybody feel better because we reacted to it. We don't need new laws on the books. What we need to do is enforce the laws we have today. It may be true that the Justice Department might need additional moneys. But where is the oversight?

We released a report earlier this year that showed $10 billion over the last 5 years of waste in the Justice Department. Here is a department that has wasted $10 billion over the last 5 years, has $2 billion at the end of this year with which they could fund this. We didn't fund any of it except $10 million in the stimulus bill or the omnibus bill, and we are adding new laws to the books that we don't need to prosecute the people who broke the law. It is a typical congressional reaction when what we should be doing is enforcing the laws already on the books and supplying on a priority basis the funding for the Justice Department to prosecute that.

I see Senator Kyl is here. I will continue my comments later.

I yield the floor.

Mr. President, I rise today to discuss S. 386, the Fraud Enforcement and Recovery Act of 2009. Although I certainly support the well-intended purpose of this bill, I have concerns about the proposal that I would like to explain today.

S. 386 aims to ``beef up'' the Government's efforts to combat fraud, particularly in the mortgage industry and Federal assistance programs. To that end, the bill creates a host of new criminal provisions and authorizes nearly half a billion dollars in spending over the next 2 years.

As a threshold matter, I am concerned about the necessity of these new criminal provisions. In my mind, Congress should have a compelling reason for adding to the already monstrous Federal criminal code. With more than 4,400 Federal offenses already on the books, it is hard to imagine there being conduct the Government cannot reach.

The Federal criminal code is often criticized for being overly broad, and legislators on both sides of the aisle have been known to bemoan its growth. Yet when ``tough-on-crime'' bills come before Congress, nobody wants to stand in their way and risk political consequences. This is a truly unfortunate trend.

Turning back the tables on over-criminalization isn't a partisan issue. Legislators from both sides of the aisle have seen first-hand the sometimes devastating unintended consequences that flow from the application of Federal law. Democrats and Republicans could be working together to reevaluate some of these provisions; instead, we are doing business as usual, responding to every crisis by further littering the criminal code.

With respect to S. 386, two prominent organizations, the National Association of Criminal Defense Lawyers (NACDL) and the Heritage Foundation, formed an unlikely alliance in opposition to the bill. Both organizations believe that S. 386 contributes to overcriminalization, and their concerns are detailed specifically in a joint letter that describes the new criminal proposals as ``redundant and risks overreaching.''It notes that within the 4,450 offenses already in criminal law, prosecutors have all the tools needed to reach crimes associated with fraud. In general, it points to the Federal mail and wire fraud statutes as being sufficiently broad to cover mortgage fraud and other related crimes. As further evidence, it references an FBI press release identifying nine existing Federal criminal statutes that can be used to prosecute mortgage fraud.

Because it is not my intention to prevent law enforcement from pursuing truly criminal conduct, I studied the issue to determine whether there are any insufficiencies within existing law that would give perpetrators of fraud safe haven. I have found no examples of conduct or entities outside the reach of current law.

It is true that not every provision of the criminal code reaches certain fraudulent acts. It is also true that not every entity in the mortgage industry is regulated by the Federal Government. It is not true, however, that the conduct or entities targeted by this bill are currently going unpunished. Prosecutors have successfully used other laws, particularly the mail and wire fraud statutes, to aggressively prosecute these crimes at the Federal level.

The FBI's recent successes serve to demonstrate this point. The FBI has handled mortgage fraud since 1989 and is actively pursuing these crimes now. It has 65 mortgage fraud task forces and working groups across the country that coordinate federal, state and local law enforcement officials. The FBI has 180 agents devoted to the sector. They are handling more than 2,000 investigations, and have opened 734 cases this year. In fiscal year 2008, they obtained 560 indictments/ informations and 338 convictions. Last year, one operation resulted in the roundup of more than 400 people accused of inflicting more than $1 billion in losses, who were caught up in a nationwide sweep named Operation Malicious Mortgage.

The Secret Service has also been working hard to combat fraud directed at financial institutions. It has an established network of 35 financial crimes task forces and 24 electronic crimes task forces. The Secret Service also partners with U.S. Attorney's Offices across the country to participate in mortgage fraud working groups. In fiscal year 2008 alone, the Secret Service indicted and arrested 5,633 individuals responsible for $442 million in fraud losses.

These impressive statistics, from both the FBI and the Secret Service, suggest that Federal criminal law is more than sufficient to address crimes of fraud associated with the ongoing economic crisis.

Federal prosecutors are not alone in pursuing mortgage fraud. Just last month, the New York Times ran an article saying, ``Across the country, attorneys general have already begun indicting dozens of loan processors, mortgage brokers and bank officers. Last week alone, there were guilty pleas in Minnesota, Delaware, North Carolina and Connecticut and sentences in Florida and Vermont, all stemming from home loan scams.'' The article gave specific examples of State actions being taken to address the crisis:

State and local prosecutors, it seems, do not need the

nudge. Last week, the district attorney's office in Brooklyn

announced the creation of a real estate fraud unit, with 12

employees and a mandate to ``address the recent flood of

mortgage fraud cases plaguing New Yorkers.'' In late

February, Maryland unveiled a mortgage fraud task force,

bringing together 17 agencies to streamline investigations.

As the joint letter from the Heritage Foundation and the National Association of Criminal Defense Lawyers correctly notes, States are the ``primary regulators of mortgage brokers and the insurance industry.

State governments are also closest to the people and are well- situated to detect and prosecute these crimes. Aided by the recent allocation of nearly $5 billion in Federal funding for State and local law enforcement, states should be able to continue and enhance their existing efforts to pursue mortgage fraud.

In short, both Federal and State criminal law is sufficient to combat mortgage and other financial fraud crimes. Congress should resist the temptation to overreach on this issue by enacting new criminal laws, and instead focus its efforts on enforcing existing law.

Enforcing existing law, of course, requires resources. In addition to the significant resources already being expended by the Federal Government to address fraud, S. 386 authorizes $490 million for fiscal years 2009 and 2010. CBO has scored the bill and estimates that implementing it would cost the full amount over the 2010-2014 period.

Proponents argue that the recent influx of Federal dollars into the economy is sure to invite fraud. I do not disagree, but this problem did not develop overnight. Surely Congress realized the possibility for fraud when it wrote these checks just months ago? Instead of taking time to include safeguards in the bill or otherwise ensure responsible, effective allocation of hard-earned taxpayer dollars, Congress rushed the bills out the door at break-neck speed. In doing so, Congress created an environment ripe for fraud.

The answer to this problem is, of course, to ask the taxpayers to shoulder even more of the burden. The 111th Congress has now spent more than $1.5 trillion, yet it has somehow neglected to fund a priority as important as combating fraud. The omnibus appropriations bill, passed just weeks ago, only contained $10 million for the FBI to pursue mortgage fraud. The stimulus bill, which provided $4 billion for State and local law enforcement, amid nearly $1 trillion in spending, failed to provide any money specific to fraud enforcement. Why, when opportunities to address this problem arose, did Congress not do the right thing and prioritize the funding authorized by S. 386?

In this time of economic crisis, Congress no longer has the luxury of spending money haphazardly. We must learn to set priorities and make sacrifices, and perhaps even think creatively about how to stretch limited resources to meet our needs.

For example, the Department of Justice has access to ``unobligated balances,'' which are unspent dollars that have been appropriated but not obligated during a fiscal year. Such money is typically required to be returned to the U.S. Treasury, but the Justice Department has unique authority to retain and carry over its unobligated funds for use in the following year. Fiscal year 2007, DOJ had almost $2.9 billion in unobligated balances, and it is estimated to have had nearly $2.3 billion at the end of fiscal year 2008, and to have $2 billion at the end of fiscal year 2009. This excess would be a good source of funding for priorities such as investigating and prosecuting mortgage fraud during a housing crisis.

Moreover, the Department of Justice has become infamous for its wasteful spending. Last year, I released a report titled, ``Justice Denied: Waste & Mismanagement at the Department of Justice,'' which identified more than $10 billion in wasteful spending. The Justice Department should be required to make more responsible use of the funds currently within its authority before Congress entrusts it with even more of the taxpayers' hard-earned money.

Unfortunately, many of the dollars wasted at the Department of Justice are done by way of congressional earmarks. Earmarks consume scarce resources and prevent experts at DOJ from allocating money to areas with the most pressing need. Congress should allow DOJ officials to reprogram existing earmarks so that higher priority needs, like combating mortgage fraud, can be met.

One thing is certain, the American taxpayer has already paid too high a price for irresponsible governance. Continuing ``business-as-usual,'' by funding parochial pet projects before we take care of legitimate business, cannot continue.

While I surely support the legislation's goal of addressing fraud, especially in the mortgage industry, I do not believe S. 386 is either necessary or prudent at this time of economic crisis. Our national debt is more than $11 trillion, and CBO recently set this year's deficit at $1.7 trillion, projected to rise to $1.845 trillion by year's end. I believe Government can and should prioritize spending to fulfill its responsibilities without asking more of the American people. I also believe that State and Federal criminal law are sufficient to address fraud and would father see efforts focused on enforcing those existing laws, rather than on creating new ones.

Amendment No. 982

I ask unanimous consent that the pending amendment be set aside and amendment No. 982 be called up.

Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Earlier today, I spoke for a short period of time on this bill. I wish to retrace some of that before I talk about this amendment. It is important that the American people understand what this bill is doing.

All of us wish to get rid of the fraud, the money laundering, we wish to punish the people who have, in fact, helped cause part of this problem. I would tell you the biggest person or group of people responsible for the problem we face today is the Congress, this body and the House of Representatives.

We failed to do our job on oversight. We incentivized and socialized housing, we incentivized Fannie Mae and Freddie Mac to do things that were inappropriate, to take risks they should not have done, and then we did not have the regulatory mechanisms in place, nor did we do the oversight to see what was going on.

This bill, however, is attempting to fix a problem with a statute, criminal statute. Most people know we do not need more criminal statutes. The fact is, nobody can name an act that occurred on any of this fraud or any of this money laundering that is not prosecutable under the Criminal Code we have today.

Off the record, when we asked some pertinent people from the Justice Department, they laughed when asked if we needed these new criminal statutes. The other point I would make is, none of this, with the exception of the false claim portion, has any application to what has already happened because you cannot apply a new law to a crime that already existed under our Constitution.

So what are we doing? What we are doing is trying to make the American public think we are doing something now that, in essence, does not need to be done. We may need to fund the Justice Department at a greater level because we did not do what we should have done earlier.

It is the typical knee-jerk reaction. We have plenty of laws on the books. As a matter of fact, the new penalties in some of this stuff are greater for fraud and mortgage than for manslaughter under the Federal Code.

We need to be very careful as we approach this. I am not saying we should not go after all those people. I am not saying we should not put in the resources to do that. But when we put the resource there, we ought to make sure they are used just for that.

No. 2, we ought to look at the Justice Department and how they spend money. Late last year I released a report on the $10 billion worth of waste in the Justice Department over the previous 5 years, $10 billion that was wasted over the previous 5 years.

Nobody disputed it. I mean, the Justice Department did not even answer it and say, that is not right, because they knew it was right. The fact is we refuse to make priorities.

This amendment is very simple. If we are going to appropriate a half billion dollars in increased funding to go after the fraud and money laundering associated with this financial situation that the Congress created and incentivized individuals, should we take it from the American taxpayers or should we take it out of money that we have already allocated?

The Justice Department is different than every other agency in the Federal Government, because at the end of the year, every other department's unexpended balances, unobligated balances eventually filter back to the Treasury. Not so at the Justice Department. They actually get to keep theirs. They are the only agency that gets to keep it.

Now, what have they averaged over the last 5 years in unobligated and unexpended balances? Over $2 billion a year. So here is an agency with $2 billion that they have not spent, and we are going to give them another $500 million, and their incentive is not to spend the money on the things we need to do; it is to keep it to do with what they want out of the direction of those that control the purse strings.

What this amendment says is we have already allocated money in terms of TARP funds; that if, in fact, we are going to send more money, which I do not think we should--I think we ought to spend it from the money we have--but if we are going to do it, let's take it from the money we have already taken from the American taxpayer, and it is not the American taxpayer; it is their grandkids, and let us use some of that money because the return on that money will be far greater than the return we are going to get on any TARP money.

It is very simple, very straightforward as a funding treatment. What we will use is money that has already been appropriated in the TARP funds, which they have a significant balance--in the billions--and we will take, over the next 2 years, $250 million or so to give to the Justice Department, if we agree we should be giving it to the Justice Department. Do not be fooled by the typical Washington turnaround that happens all the time up here, the sleight of hand that says: We are fixing a problem. We tend to fix problems that are not broken and not fix the problems that are broken. The mess we are in demonstrates that very straight forwardly.

We are going to have a $2 trillion deficit this year. We are going to double the national debt in 5 years. We are going to triple it in 10 under the Obama budget. Should not we be about priorities? Should not we be about holding the agencies accountable? Should not we be about making sure the money is spent properly?

If we are going to spend new money, try to get it from areas we already are not spending the money in but it has been appropriated. The American people would agree with that. I hope my colleagues will as well.

Mr. President, let me, first of all, commend our colleague from Vermont for his work on the underlying subject matter, which is of great importance not only to the Senate but to the American people, to deal with issues of fraud and related matters. I think it is tremendously helpful.

I was not on the floor. I apologize to my colleague from Georgia, Senator Isakson, and to Senator Conrad, with whom I have joined in offering their proposal to establish a commission to examine, as the Senator from Arizona has accurately pointed out, and the Senator from North Dakota pointed out, the most serious economic crisis in the last 100 years of our Nation. This is a matter that not only deserves our attention, in terms of what steps we take as legislators to avoid the kind of problems we are witnessing today, but also, I think importantly, to look back as to how we ended up in this situation over the last several years.

Going back, it all didn't begin a year ago or 2 years ago, but decisions that were made as many as 20 years ago--15, 10 years ago--had an awful lot to do with the problems that emerged, particularly in the area of residential mortgage foreclosures that became the root cause of the economic collapse.

There is no debate about whether we ought to look back. At least I don't see any. I think it is critically important, as other Congresses at other moments in our Nation's history when confronted with other crises have done. Whether it was the great Civil War, the

sinking of the Titanic, the so-called Pecora Commission--which was named for the legal counsel of the Senate Banking Committee during the Great Depression, looking back, obviously, the 9/11 Commission. There is example after example. The only question that remains for us to decide here is what is the best way to do this.

Senator Isakson, Senator Conrad, myself, and others who may join us, believe the outside commission is probably the best alternative, given the magnitude of the problem that must be examined. I think it will take a significant amount of hard work by some very talented and knowledgeable people over the next year, year and a half or so to do the job. Or do we engage in the same effort internally in this body with a select committee made up of Members of the Senate who would have to pretty much dedicate almost their entire time, in my view, to that subject matter at the very time we are trying to step forward with some answers that will provide some solutions as to how we avoid pitfalls.

Obviously, we were not waiting in the Banking Committee. Senator Shelby and I, my very able and competent former chairman of the committee and today ranking member, have already had, I think, some 15 or 16 hearings just since the end of January on the subject matter--the Presiding Officer is a distinguished member of our committee--on how we create the architecture to go forward and fill in the gaps so we don't end up with the same kind of problems that created the situation we are in. We cannot wait until the next Congress to do that. I believe it incumbent on us to come up with some answers to that in this Congress. We are working very hard on exactly that effort. There are some other matters we have to pay attention to, but that, I would argue, is the principal job of our committee in this the 111th Congress.

I know other committees are deeply involved. The Finance Committee is deeply involved in health care. Senator Max Baucus and Senator Chuck Grassley are going to be spending virtually every waking hour over the next several months, along with Senator Kennedy and Senator Enzi, on the Health and Education, Labor, and Pensions Committee, not to mention others, dealing with that issue.

We have the climate change issues. We have the budgetary matters. Senator Conrad and his committee, along with Judd Gregg from New Hampshire, are deeply involved in the budgetary questions.

When you start talking about forming a select committee made up of Members of this body, some of the very people on the Finance Committee, the Banking Committee, the Budget Committee, are already consumed with major responsibilities. The likelihood that a group of ourselves here could dedicate the time and the effort that needs to be dedicated to the examination of this issue while simultaneously trying to get our economy back on its feet again, I think is asking an awful lot.

My disagreement with my very good friend, and he knows this, my close friend from North Dakota, along with John McCain, with whom I have had a very good and positive relationship over the years, is not about whether we ought to do this--there is no debate about that--but where is the best venue for this to occur.

Let me make a second argument to my colleagues. This has already been a pretty acrimonious debate regrettably, but it has turned into that. There was a lot of finger-pointing going on. None of us may like that individually, but it is what it is. I think to the extent we can ask the body, that is a political body in nature, to kind of do the job without engaging in some of that ``blame the other guy for the problems we have'' is unavoidable. I don't think any of us objectively believe that is a very good way to proceed. We are not going to get very much out of it if that becomes what happens in these select committees, making sure someone else gets responsibility for the difficulty. Believe me, there is a lot of responsibility to go around.

But I believe if you end up having that kind of framework you are inviting that kind of environment and I think the last thing this body needs at this hour is to be seen as engaging in nothing more than the politics of the blame game.

I argue, again, that an outside commission made up of people who are knowledgeable, coming from the world of finance, academia, labor, consumers, others, who could dedicate the time and effort along with a competent staff to work with them and reporting back to us, the committees that have jurisdiction, as they uncover evidence or ideas that would help us fill in these gaps that we need to do legislatively, makes more sense. For that reason, I commend Senator Isakson, who is the principal author of this. Senator Conrad has joined him, as I have and my staff. We worked together over the last number of days. Senator Shelby's staff has also been tremendously constructive and positive trying to put together this idea that would make sense to our colleagues.

That is the difference. Do we go with a select committee made up of ourselves--and certainly every committee that has some jurisdiction on this would want some members on the committee. The idea that we would ask a group of us who have nothing to do with the subject matter to become part of the select committee also works counter to what we are trying to achieve, and so the Members who have jurisdiction, I assume, would insist on being a part of it.

Which subcommittee chairs it? How do you decide how big that committee is? All these are matters which could end up dividing us, when our job ought primarily to be to find out what went on and utilize a means that would help us achieve that and then, more importantly, to do our jobs to make sure the very problems and gaps that existed to allow this problem to emerge are taken in so we plug those, in effect, or mend those in a way and help create that architecture that would allow our economy to grow, the confidence to be restored, and the sense of optimism to come back to our country.

I am very complimentary of my colleague from North Dakota for talking some weeks ago. He is not a Johnny-come-lately to the issue. He argued for this idea of looking back. I thought about it a lot and have been trying to determine which way is the best for us to proceed. It is always with some regret when you disagree with a friend--not about the goals. In that there is an absolutely common interest. But which of the methods should we use to help us achieve those goals? I believe our colleague from Georgia and our colleague, ironically, from North Dakota as well--the two Senators from North Dakota are kind of on opposite ideas of this issue. Not on the issue of what we ought to achieve but rather----

I will be happy to yield.

I stand corrected on that point. I appreciate my colleague making that correction.

That is my case, basically. I don't know what my colleague from Georgia, Senator Isakson, or my colleague, Senator Conrad, had to say about this, about how this might have to be constructed, but this may be a choice we have to make in the coming half-hour or an hour or so, as to which of these ideas we will use. The idea that we do both gets a little complicated but, nonetheless, sometimes as an institution we are inclined to take the course or the path of least resistance on these matters, which sometimes can even add to more difficulties down the road.

But I urge my colleagues to support the Isakson-Conrad-Dodd proposal. We think it makes a great deal of sense to achieve that very important goal while simultaneously allowing this institution to perform the function many would expect us to fill and that is to start crafting the structures that would allow the modernization of our financial institutions in a responsible and thoughtful manner. That work alone, as the Presiding Officer knows, is going to be almost all consuming in the coming weeks.

With that, I yield the floor and thank my colleagues for their attention on this matter.

Mr. President, let me begin by complimenting the authors of the bill before the Senate today. The Fraud Enforcement and Recovery Act, or FERA, provides important tools to the Departments of Justice, Homeland Security and Housing and Urban Development to investigate and prosecute mortgage fraud. I am afraid that our government must be particularly vigilant today, as criminals seek to exploit people's economic hardships, and as some persons harmed by the downturn resort to fraud as a desperate measure.

This problem is grave, and it is getting worse by the day. Last year, financial institutions reported that mortgage loan fraud increased by 44 percent from the previous year. And this year, mortgage loan fraud is reportedly increasing even more--26 percent over last year. And still, disappointingly, many incidents of fraud go unnoticed. While this bill appropriately addresses the problem by providing additional resources to bring criminals to justice, including 400 new prosecutors and agents, I believe that efforts to arrest this alarming trend must also focus on preventing frauds from even being perpetrated in the first place.

Fortunately, the Obama administration is doing just that. Earlier this month, a new initiative was announced targeting mortgage loan modification fraud and foreclosure rescue scams. This effort, led by the Department of the Treasury's Financial Crimes Enforcement and Network, or FinCEN, is coordinating efforts across Federal and State governments as well as the private sector to share intelligence and identify criminal enterprises and deceptive schemes. Once such scams were identified, FinCEN is issuing ``early warnings'' to law enforcement, regulatory agencies, and the consumer protection community to watch for tell-tale signs of such scams. Already, FinCEN reports that this information is providing critical leads to protect consumers from falling victim to fraud. In addition, FinCEN is helping private industry perform their own due diligence, issuing advisories to alert financial institutions to the risks of emerging schemes by describing what they call ``red flags,'' that typify loan modification or foreclosure rescue scams. Banks, in turn are thus advised on how to file suspicious activity reports to Treasury, to ensure that law enforcement authorities may stay up-to-date in tracking potential fraud activity.

As the industry publication, American Banker, reported last week, increases in the filing of suspicious activity reports this year may be demonstrating a rise in fraud. In any case, in my estimation, these filings indicate that cases of fraud are being taken very seriously both by the government and industry. For that reason, I believe that, if implemented appropriately, the FinCEN-led Foreclosure Rescue Scams & Loan Modification effort will help both law enforcement combat fraud and consumers avoid scams.

I appreciate the Obama administration's efforts, and I urge every law enforcement agency, including the Department of Justice, to coordinate with FinCEN as we attempt to safeguard our financial system from fraud and prosecute those who break the law. I support the bill currently before the Senate, which I believe will greatly complement Treasury's programs to combat financial crimes.

Anti-Money Laundering

I appreciate Senator Levin's and his subcommittee's hard investigative work on this very difficult subject matter. I share his conviction that America's regulatory system must be reformed to address challenges posed by business practices surrounding 21st century financial products. The United States cannot afford to have investment vehicles used to engage in abusive practices of fraud, illicit activity, and tax evasion. As the Banking Committee undertakes a comprehensive effort to modernize the securities and banking system, I will look forward to engaging the senior Senator from Michigan on issues of particular importance to him, including anti-money laundering measures.

Mr. President, I rise today to join my colleague, Senator Bingaman, to introduce the bipartisan Rural Aviation Improvement Act. I am proud to join the senior Senator from New Mexico, a steadfast and resolute guardian of commercial aviation service to all communities, particularly rural areas that would otherwise be deprived of any air service.

It has always been true that reliable air service to our Nation's rural areas is not simply a luxury or a convenience. It is an imperative. Ask any town manager or mayor of a small community how critical aviation is to economic development. All of us in the Senate who come from rural states understand the vital role aviation plays in the moving of people and goods to and from areas that would otherwise face a paucity of transportation options. Quite frankly, I have long held serious concerns about the impact deregulation of the airline industry has had on small cities and smaller towns in rural areas, like those in my home State of Maine. That fact is, since deregulation, many of these communities across the country have experienced a decline in flights and size of aircraft while seeing an increase in fares. More than 300 have lost air service altogether.

This legislation will serve to improve the long-underfunded Essential Air Service program. The additional commitment of resources will augment the ability of the program to achieve its desired goals, reducing the impact on the general fund while providing small communities with a greater degree of certainty when planning future improvements or bringing enhanced service to their airports. The bill also gives those same communities a greater role in retaining and determining the sort of air service which they receive, and assists in making that service sustainable.

Increasingly, the Essential Air Service program has been plagued with a decline in the number of airlines willing to provide this critical link to the national transportation network. Not only have we lost a rash of participants in the program due to wildly fluctuating fuel costs and the omnipresent economic downturn, but in addition, a few `bad actors' have jeopardized commercial aviation for entire regions by submitting low-ball contracts to the Department of Transportation and then reneging on their commitment to the extent and quality of their service. Our bill will not only establish a system of minimum requirements for contracts to protect these small cities that rely on EAS, but it will also extend those contracts to 4 years from the current 2. This gives a heightened degree of stability in terms of air service, rather than having communities negotiating new contracts or receiving service from entirely new carriers every 18 months. Actively encouraging communities to get involved in the process, and build relationships with the carriers who serve them, can only bolster the quality of the program.

In the final analysis, everyone benefits when our Nation is at its strongest economically. Most importantly in this case, greater prosperity everywhere will, in the long run, mean more passengers for the airlines. We cannot afford to ignore rural America--which contains nearly a quarter of the population--as we move forward with aviation policy and the next generation air traffic system. Therefore, it is very much in our national interests to ensure that every region has reasonable, consistent access to commercial air service. That is why I strongly believe the federal government has an obligation to fulfill the commitment it made to these communities when Congress deregulated the airlines in 1978; to safeguard their ability to continue commercial air service.

Mr. President, I rise today to introduce the SIMPLE Cafeteria Plan Act of 2009, which will increase the access to quality, affordable health care for millions of small business owners and their employees. I am pleased that my good friends, Senator Bond from Missouri and Senator Bingaman from New Mexico, have agreed to cosponsor this critical, bipartisan piece of legislation. We have introduced this legislation together since 2005.

In order to help small businesses increase their employees' access to health insurance and other benefits, and help them compete for talented workers, we are introducing the SIMPLE Cafeteria Plan Act. This bill will enable small business employees to purchase health insurance with tax-free dollars in the same way that many employees of large companies already do--in their cafeteria plans. This legislation is modeled after the Savings Incentive Match Plan for Employees SIMPLE, Pension Plan enacted in 1996.

As former Chair and now Ranking Member of the Senate Small Business Committee, if there's one concern I've heard time and again--from small businesses in Maine and across the country--it's the exorbitant cost to small businesses of providing health insurance to their employees. Throughout America, health insurance premiums have increased by a staggering 89 percent since 2000--far outpacing inflation and wage gains. In Maine, the annual premium for the most heavily subscribed policy in the small group insurance market is $5,400 for individual coverage, and over $16,000 for a family plan.

Clearly our Nation's health care system is terribly broken--and the majority of the uninsured--52 percent--are either self-employed, work for a small business with 100 or fewer employees, or are dependent upon someone who does. I am pleased that the Congress is now in the midst of a serious reform effort that will result in a much better system of delivering health care. In order to address the problem of the working uninsured, we must address access and affordability in small businesses. The bill we are introducing today will do just that.

So why are our Nation's small businesses, which are our country's job creators and the true engine of our economic growth, not offering health insurance? Survey after survey tells us that the main reason is that they cannot afford to offer it, or other benefits. Still other small firms can only afford to pay a portion of their employees' health insurance premiums. As a result, countless employees of small business must try to obtain health insurance from the individual market rather than through their work place. As we debate reforming health insurance, we must consider cafeteria plans--Section 125 plans, as they are often known--which are a proven vehicle for access, and should be a key component to reform. I would like to add that another component to reform that must be considered is the SHOP Act, which I reintroduced yesterday with Senators Durbin and Lincoln, which would also help to reverse the pernicious problems of access and affordability of health insurance.

Currently, many large employers, and even the Federal Government, allow employees to purchase health insurance, and other qualified benefits, with tax-free dollars. Cafeteria plans allow employers to offer health benefits with pre-tax dollars. As the name suggests, cafeteria plans are programs where employees can purchase a variety of qualified benefits. Specifically, cafeteria plans offer employees great flexibility in selecting their desired benefits while allowing them to disregard those benefits that do not fit their particular needs. Moreover, the employees are usually purchasing benefits at a lower cost because their employers are often able to obtain a reduced group rate prices.

Typically, in cafeteria plans, a combination of employer contributions and employee contributions are used to fund the accounts that employees used to buy specific benefits. Under current law, qualified benefits include health insurance, dependent-care reimbursement, life and disability insurance. Unfortunately, long term care insurance is not currently a qualified benefit available for purchase in cafeteria plans. I will come back to long term care insurance in a moment.

Again, cafeteria plans already have a proven record of providing good benefits to a wide group of employees. However, in order for companies to qualify for cafeteria plans they must satisfy the tax code's strict non-discrimination rules and these rules are a major impediment to small employers being able to offer benefits to employees. These rules exist to ensure that companies offer the same benefits to their low- wage employees along with their highly compensated employees.

Now, I want to be clear. I believe that these non-discrimination rules serve a legitimate purpose and are necessary employee protections. Indeed, we need to ensure that employers are not able to game the tax system to benefit only upper income employees or the business owners. As with the SIMPLE pension plan, a small business employer that is willing to make a minimum contribution for all employees, or who is willing to match contributions, will be permitted to waive the non-discrimination rules that currently prevent them from otherwise offering these benefits. This structure has worked extraordinarily well in the pension area with little risk of abuse. I am confident that it will be just as successful when it comes to broad- based benefits offered through cafeteria plans. The SIMPLE Cafeteria Plan Act requires the employer to either match contributions of 3 percent of an employee's income or contribute 2 percent without the employee's contribution.

An essential change allows small business owners themselves to participate in cafeteria plans generally. Current law punitively prohibits the owners of small businesses from participating in these benefit plans. As a result, if a business owner is unable to obtain any benefit for himself or his own family he is unlikely to undertake the time and financial commitment of offering the benefit. It is time to remove this punitive prohibition which I believe will expand access to this flexible platform for employee benefits.

Another improvement generally applicable to all cafeteria plan law updates the rules regarding depended care flexible spending accounts, DCFSA. The bill increases the amount that can be excluded to $7,500 for one dependent or $10,000 for two or more dependents. Had the original $5,000 limit for DCFSA been indexed for inflation when it was created in 1986, it would have risen to $9,692. The bill also indexes these amounts for future inflation so that families will not see an erosion of their benefit in the future. In order for millions of working moms to be able to

work outside of the home, they must have help in addressing child care costs. It is critical to note that it is not just working parents but an increasing number of baby-boom adults who need help caring for aging dependent parents. Increasing the dependent care exclusion in flexible spending accounts is an essential update to cafeteria plan law for working families.

Another provision of the bill generally revises the use it or lose it rule under current law, and permits participants to carry over up to $500 left in a health-care or dependent-care flexible spending account to the next plan year. Such unused contributions could also be carried over to the employee's retirement account, such as a 401(k) plan, or to a Health Savings Account. In either case, any carried over contributions will reduce the amount that the employee could contribute to the flexible spending account or pension plan in the subsequent year. The bill indexes the carry-over amount for inflation.

Finally, the bill also works to address our aging populations' need for long-term care insurance which is also a probable component to the debate on health care reform. In the U.S., nearly half of all seniors age 65 or older will need long-term care at some point in their life. Unfortunately, most seniors have not adequately prepared for this possibility, just as many working age individuals have not given much thought to their eventual long-term care needs. With the cost of a private room in a nursing home averaging more than $74,000 annually, many Americans risk losing their life savings--and jeopardizing their children's inheritance--by failing to properly plan for the long-term care services they will need as they grow older.

To address this problem, this bill would allow employees to purchase long-term care insurance coverage through their cafeteria plans and flexible spending arrangements. Expanding eligibility of these benefits will make long-term care insurance more affordable and help Americans prepare for their future long-term care needs.

If more small business owners are able to offer their employees the chance to enjoy a variety of employee benefits these firms will be more likely to attract, recruit, and retain talented workers. This will ultimately make small enterprises more competitive. Therefore, I urge my colleagues to join Senator Bond and Senator Bingaman and me in cosponsoring this important legislation as we work together to achieve broader health care reform.

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