Restoring American Financial Stability Act of 2010

Mr. President, I seek recognition to introduce legislation to amend Section 162 of the Internal Revenue Code to permit attorneys to deduct expenses and court costs incurred on behalf of contingency fee clients as an ordinary and necessary business expense in the year such expenses are sustained. I introduced the same legislation in the 110th Congress, and the bill attracted bipartisan support. My bill simply clarifies the law to make certain that attorneys who take on contingency fee cases are able to enjoy the same tax benefits as virtually every other small business in the country.

Contingency agreements between attorneys and clients are very common in personal injury, medical malpractice, product liability, Social Security disability, workers compensation, civil liberties, and employment cases. Under these agreements, an attorney pays all out-of- pocket costs associated with a case before any conclusion to the case. Such expenses include costs for expert witnesses, depositions, medical records, and court fees. Contingency agreements have numerous benefits to clients; in particular, indigent individuals who might otherwise be unable to afford legal services.

The obvious benefit to clients of contingency fee arrangements is that they do not have to incur out-of-pocket expenses for attorneys' fees. This may be particularly valuable to clients who do not have the ability to pay attorneys by the hour to advance their case. The arrangement also benefits the client by effectively spreading the risk of litigation. An hourly-rate payment agreement requires the client to assume all of the risk because the attorneys' fees are a sunk cost. However, under a contingent-fee arrangement, the attorney shares that risk and is only paid a fee if he wins the case or obtains a settlement.

Currently, the Internal Revenue Service, IRS, treats expenses and court costs on behalf of contingency clients as loans to the client. As a result, the IRS does not permit any deduction by the attorney until the litigation is resolved, sometimes many years after the attorney has incurred the expenses on behalf of their client. The IRS treats the expenses and court costs as a loan despite the fact that no interest is charged and the lawyer only recoups costs if the case is won or settled. Not only is the IRS's position illogical, but it is contrary to a ruling by the United States Court of Appeals for the 9th Circuit.

In Boccardo v. Commissioner, 56 F.3d 1016, 9t Cir. 1995, the 9th Circuit held that because the firm had a ``gross fee'' contract with the client, the firm incurred ordinary and necessary business expenses in the payment of costs and charges in connection with its clients' litigation. Consequently, litigation costs such as filing fees, witness fees, travel expenses, and medical consultation fees were deductible as ordinary and necessary business expenses in the year the costs were incurred on behalf of the clients. In a ``gross fee'' contract, the client is only obligated to pay their attorney a percentage of the amount recovered and is not expressly responsible for specific repayment of costs. While the Boccardo court contrasted ``gross fee'' contracts with ``net fee'' contracts, such a distinction is trivial for tax purposes. In both agreements, the attorney takes a considerable business risk to incur significant costs on behalf of a client and only recoups the expenses if a recovery is won.

Despite the Boccardo court's ruling in favor of attorneys, the IRS continues to treat the out-of-pocket costs related to contingency fee cases as loans. Lawyers who make the decision to deduct these costs are exposed to potential audit and litigation. Over the past 13 years, taxpayers have had to proceed at their own peril--Ninth Circuit taxpayers risk a conflict with the IRS on this matter despite the case law, and taxpayers outside of the Ninth Circuit have no guidance at all since they cannot directly rely on Boccardo.

My bill reverses an unfair IRS position by treating these businesses the same as all other small businesses. It does so by allowing attorneys with contingency fee clients to deduct their expenses and costs in the year that they are paid. My legislation does not give attorneys anything above and beyond that which is currently enjoyed by virtually every other small business in our country.

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

Mr. President, I seek recognition to introduce legislation to amend Section 62(a)(20) of the Internal Revenue Code to allow taxpayers to subtract from their taxable gross income the attorneys' fees and court costs paid by the taxpayer in connection with an award or settlement of monetary damages in a civil claim. Such a deduction is commonly referred to as an ``above-the-line'' deduction.

Under current law, there is an inequity in the tax code that results in the double taxation of attorneys' fees and costs in certain circumstances. In addition, attorneys' fees paid by individuals in recovering a taxable award in certain civil claims are only deductible as miscellaneous itemized deductions. As such, they are subject to a reduction equal to two percent of the individual's adjusted gross income and subject to a complete disallowance when calculating the alternative minimum tax. Consequently, many plaintiffs end up incurring significant tax liability beyond the amount they actually bring home after winning or settling a case.

Congress partially corrected the problem in 2004, when we passed, and President Bush signed, the American Jobs Creation Act of 2004, Jobs Act. The Jobs Act allows an above-the-line deduction for amounts attributable to attorneys' fees and costs received by individuals based on claims brought under certain statutes, including the False Claims Act, 1862(b)(3)(A) of the Social Security Act, or unlawful discrimination claims. Prior to enactment of the Jobs Act, the Internal Revenue Code already excluded from income awards arising out of claims relating to physical injury and sickness. However, attorneys' fees paid in the pursuit and collection of punitive awards, awards for libel, slander, or other awards in cases not involving a physical injury or a claim of discrimination are still not subtracted from gross income.

In 2005, the United States Supreme Court added further confusion to the issue. In Commissioner v. Banks, 543 U.S. 426 (2005), the Court attempted to resolve a circuit split on the Federal income tax treatment of attorneys' fees. In an 8-0 opinion, the Court held that when a litigant's recovery constitutes income, the litigant's income includes the portion of the recovery paid to the attorney as a contingent fee. Consequently, for those claims not excluded from gross income in the Jobs Act, attorneys' fees are subjected to double taxation; subjected to a reduction equal to two percent of the individual's adjusted gross income when listed as a miscellaneous itemized deduction; and subjected to a complete disallowance when calculating the alternative minimum tax.

My legislation corrects the problem by permitting taxpayers to subtract from their taxable gross income the attorneys' fees and court costs paid by the taxpayer in connection with an award or settlement of monetary damages in all civil claims. The legislation would ensure more uniform treatment of contingency fees in all types of litigation, not just the limited categories of litigation as specified in the Jobs Act. Importantly, this change does not affect the requirement that attorneys pay federal income tax on legal fees they receive. The legislation does eliminate the inequity of the client also paying taxes on attorneys' fees despite not receiving the funds under the terms of a contingency fee contract.

I encourage my colleagues to join me in this effort to bring fairness to the tax code.

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

Mr. President, I seek recognition today to reintroduce the Attorney-Client Privilege Protection Act of 2009, which is nearly identical to S. 3217, a bill I introduced in July of 2008 under the same name. This legislation continues to address the Department of Justice's corporate prosecution guidelines. Those guidelines, last revised by Deputy Attorney General Mark Filip in August 2008, erode the attorney-client relationship by allowing prosecutors to continue considering the provision of privileged information in order for corporations to receive cooperation credit.

To their credit, the Filip guidelines preclude prosecutors from asking for privilege waivers in nearly all circumstances. However, as evidenced by the numerous versions of the Justice Department's corporate prosecution guidelines over the past decade, the Filip reforms cannot be trusted to remain static. Moreover, unlike Federal law--which requires the assent of both houses and the President's signature or a super-majority in Congress--the Filip guidelines are subject to unilateral executive branch modification. Therefore, to avoid a recurrence of prosecutorial abuses and attorney-client privilege waiver demands, legislation is necessary.

Like my previous bills, this bill will protect the sanctity of the attorney-client relationship by statutorily prohibiting Federal prosecutors and investigators across the executive branch from requesting waiver of attorney-client privilege and attorney work product protections in corporate investigations. The bill would similarly prohibit the government from conditioning charging decisions or any adverse treatment on an organization's payment of employee legal fees, invocation of the attorney-client privilege, or agreement to a joint defense agreement.

The bill makes many subtle improvements over earlier iterations, including defining ``organization'' to make clear that continuing criminal enterprises and terrorist organizations will not benefit from the bill's protections. The bill also clarifies language that the Department of Justice had previously criticized as ambiguous. The bill further makes clear in its findings that its prohibition on informal privilege waiver demands is far from unprecedented. The bill states: ``Congress recognized that law enforcement can effectively investigate without attorney-client privileged information when it banned Attorney General demands for privileged materials in the Racketeer Influenced and Corrupt Organizations Act. See 18 U.S.C. Sec. 1968(c)(2).''

Though an improvement over past guidelines, there is no need to wait to see how the Filip guidelines will operate in practice. There is similarly no need to wait for another Department of Justice or executive branch reform that will likely fall short and become the sixth policy in the last 10 years. Any such internal reform may prove fleeting and might not address the privilege waiver policies of other government agencies that refer matters to the Department of Justice, thus allowing in through the window what isn't allowed through the door.

As I said when I introduced my first bill on this subject, the right to counsel is too important to be passed over for prosecutorial convenience or Executive Branch whimsy. It has been engrained in American jurisprudence since the 18th century when the Bill of Rights was adopted. The 6th Amendment is a fundamental right afforded to individuals charged with a crime and guarantees proper representation by counsel throughout a prosecution. However, the right to counsel is largely ineffective unless the confidential communications made by a client to his or her lawyer are protected by law. As the Supreme Court observed in Upjohn Co. v. United States, ``the attorney-client privilege is the oldest of the privileges for confidential communications known to the common law.'' When the Upjohn Court affirmed that attorney-client privilege protections apply to corporate internal legal dialogue, the Court manifested in the law the importance of the attorney-client privilege in encouraging full and frank communication between attorneys and their clients, as well as the broader public interests the privilege serves in fostering the observance of law and the administration of justice. The Upjohn Court also made clear that the value of legal advice and advocacy depends on the lawyer having been fully informed by the client.

In addition to the importance of the right to counsel, it is also fundamental

that the Government has the burden of investigating and proving its own case. Privilege waiver tends to transfer this burden to the organization under investigation. As a former prosecutor, I am well aware of the enormous power and tools a prosecutor has at his or her disposal. The prosecutor has enough power without the coercive tools of the privilege waiver, whether that waiver policy is embodied in the Holder, Thompson, McCallum, McNulty, or Filip memorandum.

As in my prior bills designed to protect the attorney-client privilege, this bill amends title 18 of the United States Code by adding a new section, Sec. 3014, that would prohibit any agent or attorney of the U.S. Government in any criminal or civil case to demand or request the disclosure of any communication protected by the attorney-client privilege or attorney work product. The bill would also prohibit government lawyers and agents from basing any charge or adverse treatment on whether an organization pays attorneys' fees for its employees or signs a joint defense agreement.

This legislation is needed to ensure that constitutional protections of the attorney-client relationship are preserved in Federal prosecutions and investigations.

Mr. President, once more I seek recognition to introduce legislation that will give the public greater access to our Supreme Court. This bill requires the High Court to permit television coverage of its open sessions unless it decides by a majority vote of the Justices that allowing such coverage in a particular case would violate the due process rights of one or more of the parties involved in the matter.

The purpose of this legislation is to open the Supreme Court doors so that more Americans can see the process by which the Court reaches critical decisions of law that affect this country and everyday Americans. The Supreme Court makes pronouncements on Constitutional and Federal law that have a direct impact on the rights of Americans. Those rights would be substantially enhanced by televising the oral arguments of the Court so that the public can see and hear the issues presented to the Court. With this information, the public would have insight into key issues and be better equipped to understand the impact of and reasons for the Court's decisions.

In a very fundamental sense, televising the Supreme Court has been implicitly recognized--perhaps even sanctioned--in a 1980 decision by the Supreme Court of the United States entitled Richmond Newspapers v. Virginia. In this case, the Court noted that a public trial belongs not only to the accused but to the public and the press as well and recognized that people now acquire information on court procedures chiefly through the print and electronic media.

That decision, in referencing the electronic media, appears to anticipate televising court proceedings, although I do not mean to suggest that the Supreme Court is in agreement with this legislation. I should note that the Court could, on its own initiative, televise its proceedings but has chosen not to do so. This presents, in my view, the necessity for legislating on this subject.

When I argued the case of the Navy Yard, Dalton v. Specter, back in 1994, the Court proceedings were illustrated by an artist's drawings-- some of which now hang in my office. Today, the public gets a substantial portion, if not most, of its information from television and the internet. While many court proceedings are broadcast routinely on television, the public has little access to the most important and highest court in this country. Although the internet has made the Court's transcripts, and even more recently, audio recordings, more widely accessible, the public is still deprived of the real time transmission of audio and video feeds from the Court. I believe it is vital for the public to see, as well as to hear, the arguments made before the Court and the interplay among the justices. I think the American people will gain a greater respect for the way in which our High Court functions if they are able to see oral arguments.

Justice Felix Frankfurter perhaps anticipated the day when Supreme Court arguments would be televised when he said that he longed for a day when: ``The news media would cover the Supreme Court as thoroughly as it did the World Series, since the public confidence in the judiciary hinges on the public's perception of it, and that perception necessarily hinges on the media's portrayal of the legal system.''

When I spoke in favor of this legislation in September of 2000, I said, ``I do not expect a rush to judgment on this very complex proposition, but I do believe the day will come when the Supreme Court of the United States will be televised. That day will come, and it will be decisively in the public interest so the public will know the magnitude of what the Court is deciding and its role in our democratic process.'' I have continued to reiterate those sentiments in September of 2005 and in January of 2007 when I re-introduced identical bills. Today, I continue to support this legislation because I believe that it is crucial to the public's awareness of Supreme Court proceedings and their impact on the daily lives of all Americans.

I pause to note that it was not until 1955 that the Supreme Court, under the leadership of Chief Justice Warren, first began permitting audio recordings of oral arguments. Between 1955 and 1993, there were apparently over 5,000 recorded arguments before the Supreme Court. That roughly translates to an average of about 132 arguments annually. But audio recordings are simply ill suited to capture the nuance of oral arguments and the sustained attention of the American citizenry. Nor is it any response that people who wish to see open sessions of the Supreme Court should come to the Capital and attend oral arguments. For, according to one source: ``Several million people each year visit Washington, D.C., and many thousands tour the White House and the Capitol. But few have the chance to sit in the Supreme Court chamber and witness an entire oral argument. Most tourists are given just three minutes before they are shuttled out and a new group shuttled in. In cases that attract headlines, seats for the public are scarce and waiting lines are long. And the Court sits in open session less than two hundred hours each year. Television cameras and radio microphones are still banned from the chamber, and only a few hundred people at most can actually witness oral arguments. Protected by a marble wall from public access, the Supreme Court has long been the least understood of the three branches of our Federal Government.''

In light of the increasing public desire for information, it seems untenable to continue excluding cameras from the courtroom of the Nation's highest court. As one legal commentator observes: ``An effective and legitimate way to satisfy America's curiosity about the Supreme Court's holdings, Justices, and modus operandi is to permit broadcast coverage of oral arguments and decision announcements from the courtroom itself.''

Televised court proceedings better enable the public to understand the role of the Supreme Court and its impact on the key decisions of the day. Not only has the Supreme Court invalidated Congressional decisions where there was, in the views of many, simply a difference of opinion as to what is preferable public policy, but the Court determines novel issues such as whether AIDS is a disability under the Americans with Disabilities Act, whether Congress can ban obscenity from the Internet, and whether states can impose term limits upon members of Congress. The current Court, like its predecessors, hands down decisions which vitally affect the lives and liberties of all Americans. Since the Court's historic 1803 decision, Marbury v. Madison, the Supreme Court has the final authority on issues of enormous importance from birth to death. In Roe v. Wade, 1973, the Court affirmed a Constitutional right to abortion in this country and struck down state statutes banning or severely restricting abortion during the first two trimesters on the grounds that they violated a right to privacy inherent in the Due Process Clause of the Fourteenth Amendment.

In the case of Washington v. Glucksberg, 1997, the court refused to create a similar right to assisted suicide. Here the Court held that the Due Process Clause does not recognize a liberty interest that includes a right to commit suicide with another's assistance.

In the Seventies, the Court first struck down then upheld state statutes imposing the death penalty for certain crimes. In Furman v. Georgia, 1972, the Court struck down Georgia's death penalty statute under the cruel and unusual punishment clause of the Eighth Amendment and stated that no death penalty law could pass constitutional muster unless it took aggravating and mitigating circumstances into account. This decision led Georgia and many States to amend their death penalty statutes and, four years later, in Gregg v. Georgia, 1976, the Supreme Court upheld Georgia's amended death penalty statute.

Over the years, the Court has also played a major role in issues of war and peace. In its opinion in Scott v. Sandford, 1857--better known as the Dred Scott decision--the Supreme Court held that Dred Scott, a slave who had been taken into ``free'' territory by his owner, was nevertheless still a slave.

The Court further held that Congress lacked the power to abolish slavery in certain territories, thereby invalidating the careful balance that had been worked out between the North and the South on the issue. Historians have noted that this opinion fanned the flames that led to the Civil War.

The Supreme Court has also ensured adherence to the Constitution during more recent conflicts. Prominent opponents of the Vietnam War repeatedly petitioned the Court to declare the Presidential action unconstitutional on the grounds that Congress had never given the President a declaration of war. The Court decided to leave this conflict in the political arena and repeatedly refused to grant writs of certiorari to hear these cases. This prompted Justice Douglas, sometimes accompanied by Justices Stewart and Harlan, to take the unusual step of writing lengthy dissents to the denials of cert.

In New York Times Co. v. United States, 1971--the so called ``Pentagon Papers'' case--the Court refused to grant the government prior restraint to prevent the New York Times from publishing leaked Defense Department documents which revealed damaging information about the Johnson Administration and the war effort. The publication of these documents by the New York Times is believed to have helped move public opinion against the war.

In its landmark civil rights opinions, the Supreme Court took the lead in effecting needed social change, helping us to address fundamental questions about our society in the courts rather than in the streets. In Brown v. Board of Education, the Court struck down the principle of ``separate but equal'' education for blacks and whites and integrated public education in this country. This case was then followed by a series of civil rights cases which enforced the concept of integration and full equality for all citizens of this country, including Gamer v. Louisiana, 1961, Burton v. Wilmington Parking Authority, 1961, and Peterson v. City of Greenville, 1963.

In recent years Marbury, Dred Scott, Furman, New York Times, and Roe, familiar names in the lexicon of lawyerly discussions concerning watershed Supreme Court precedents, have been joined with similarly important cases like Hamdi, Rasul, Roper, and Boumediene--all cases that affect fundamental individual rights. In Hamdi v. Rumsfeld, 2004, the Court concluded that although Congress authorized the detention of combatants, due process demands that a citizen held in the United States as an enemy combatant be given a meaningful opportunity to contest the factual basis for that detention before a neutral decisionmaker. The Court reaffirmed the nation's commitment to constitutional principles even during times of war and uncertainty. Similarly, in Rasul v. Bush, 2004, the Court held that the Federal habeas statute gave district courts jurisdiction to hear challenges of aliens held at Guantanamo Bay, Cuba in the U.S. War on Terrorism. In Roper v. Simmons, a 2005 case, the Court held that executions of individuals who were under 18 years of age at the time of their capital crimes is prohibited by Eighth and Fourteenth Amendments. In Boumediene v. Bush, 2008, the Court held that, subsequent to Hamdan v. Rumsfeld and regardless of Congress' attempts to strip federal courts of jurisdiction to consider pending habeas corpus petitions from Guantanamo detainees, the detainees nonetheless were not barred from seeking the writ and procedures under the Detainee Treatment Act were not an adequate substitute for it.

When deciding issues of such great national import, the Supreme Court is rarely unanimous. In fact, a large number of seminal Supreme Court decisions, such as Boumediene, have been reached through a vote of 5-4. Such a close margin reveals that these decisions are far from foregone conclusions distilled from the meaning of the Constitution, reason and the application of legal precedents. On the contrary, these major Supreme Court opinions embody critical decisions reached on the basis of the preferences and views of each individual justice. In a case that is decided by a vote of 5-4, an individual justice has the power by his or her vote to change the law of the land.

Since the beginning of its October 2005 term when Chief Justice Roberts first began hearing cases, the Supreme Court has issued 45 decisions with a 5-4 split, not including the current October 2008 term, in which I understand there are additional 5-4 decisions within the few cases that have already been decided. It has also issued six 5- 3 decisions in which one justice recused. Finally, it has issued a rare 5-2 decision in which Chief Justice Roberts and Justice Alito took no part, and in the October 2007 term, two 4-4 ties. In sum, since the beginning of its October 2005 term and not counting the current term, the Supreme Court has issued 52 decisions establishing the law of the land in which only 5 justices explicitly concurred. Many of these narrow majorities occur in decisions involving the Court's interpretation of our Constitution--a sometimes divisive endeavor on the Court. I will not discuss all 52 thinly decided cases but will describe a few to illustrate my point about the importance of the Court and its decisions in the lives of Americans.

The first 5-4 split decision, decided on January 11, 2006, was Brown v. Sanders. In this case the Court considered ``the circumstances in which an invalidated sentencing factor will render a death sentence unconstitutional by reason of its adding an improper element to the aggravation scale in the jury's weighing process.'' A majority of the Court held that henceforth in death penalty cases, an invalidated sentencing factor will render the sentence unconstitutional by reason of its adding an improper element to the aggravation scale unless one of the other sentencing factors enables the sentencer to give aggravating weight to the same facts and circumstances. The majority opinion was authored by Justice Scalia and joined by Chief Justice Roberts and Justices O'Connor, Kennedy and Thomas. Justice Stevens filed a dissenting opinion in which Justice Souter joined. Similarly, Justice Breyer filed a dissenting opinion in which Justice Ginsburg joined.

In November 2006, the Supreme Court decided Ayers v. Belmontes, a capital murder case in which the Belmontes contended that California law and the trial court's instructions precluded the jury from considering his forward looking mitigation evidence suggesting he could lead a constructive life while incarcerated. In Ayers the Supreme Court found the Ninth Circuit erred in holding that the jury was precluded by jury instructions from considering mitigation evidence. Justice Kennedy authored the majority opinion while Justice Stevens wrote a dissent joined by three other justices.

Other 5-4 split decisions since October 2005 include United States v. Gonzalez-Lopez, concerning whether a defendant's Sixth Amendment right to counsel was violated when a district court refused to grant his paid lawyer permission to represent him based upon some past ethical violation by the lawyer, June 26, 2006; LULAC v. Perry, deciding whether the 2004 Texas redistricting violated provisions of the Voting Rights Act, June 28, 2006; Kansas v. Marsh, concerning the Eighth and Fourteenth Amendments in a capital murder case in which the defense argued that a Kansas statute established

an unconstitutional presumption in favor of the death sentence when aggravating and mitigating factors were in equipoise, April 25, 2006; Clark v. Arizona, a capital murder case involving the constitutionality of an Arizona Supreme Court precedent governing the admissibility of evidence to support an insanity defense, June 29, 2006; Garcetti v. Ceballos, a case holding that when public employees make statements pursuant to their official duties they are not speaking as citizens for First Amendment purposes, and the Constitution does not insulate their communications from employer discipline, May 30, 2006; and District of Columbia v. Heller, June 26, 2008, which found that Washington, D.C.'s gun laws were unconstitutionally restrictive of rights afforded under the Second Amendment.

The justices have split 5-3 six times since October 2005.

In Georgia v. Randolph, March 22, 2006, a 5-3 majority of the Supreme Court held that a physically present co-occupant's stated refusal to permit a warrantless entry and search rendered the search unreasonable and invalid as to that occupant. Justice Souter authored the majority opinion. Justice Stevens filed a concurring opinion as did Justice Breyer. The Chief Justice authored a dissent joined by Justice Scalia. Moreover, Justice Scalia issued his own dissent as did Justice Thomas. In Randolph, there were six opinions in all from a Court that only has nine justices. One can only imagine the spirited debate and interplay of ideas, facial expressions and gestures that occurred in oral arguments. Audio recordings are simply inadequate to capture all of the nuance that only cameras could capture and convey.

In House v. Bell, a 5-3 opinion authored by Justice Kennedy, June 12, 2006, the Supreme Court held that because House had made the stringent showing required by the actual innocence exception to judicially- established procedural default rules, he could challenge his conviction even after exhausting his regular appeals. Justice Alito took no part in considering or deciding the House case. It bears noting, however, that if one justice had been on the other side of this decision it would have resulted in a 4-4 tie and, ultimately, led to affirming the lower court's denial of House's post-conviction habeas petitions due to a procedural default.

In Hamdan v. Rumsfeld, a 5-3 decision in which Chief Justice Roberts took no part, the Supreme Court held that Hamdan could challenge his detention and the jurisdiction of the President's military commissions to try him despite recent enactment of the Detainee Treatment Act. A thin majority of the justices supported the decision despite knowledge that the DTA explicitly provides ``no court . . . shall have jurisdiction to hear or consider . . . an application for . . . habeas corpus filed by . . . an alien detained . . . at Guantanamo Bay.'' In deciding the merits, the Court went on to hold that the President lacked authority to establish a military commission to try Hamdan or others without enabling legislation passed by both houses of Congress and enacted into law. This case was one of a handful of recent cases in which the Supreme Court released audiotapes of oral arguments almost immediately after they occurred. Yet it would have been vastly preferable to watch the parties' advocates grapple with the legal issues as the justices peppered them with jurisdictional, constitutional and merits-related questions from the High Court's bench.

In another fascinating 5-3 case, Jones v. Flowers, April 26, 2006, the Supreme Court considered whether, when notice of a tax sale is mailed to the owner and returned undelivered, the government must take additional reasonable steps to provide notice before taking the owner's property. In an opinion by Chief Justice Roberts, the Court held that where the Arkansas Commissioner of State Lands had mailed Jones a certified letter and it had been returned unclaimed, the Commissioner had to take additional reasonable steps to provide Jones notice. Justices Thomas, Scalia and Kennedy dissented and Justice Alito took no part in the decision.

Though Jones v. Flowers involved the Due Process Clause of the Fourteenth Amendment, not the Takings Clause of Fifth Amendment, one could draw interesting analogies to the Court's controversial 2005 decision in Kelo v. City of New London. In Kelo, a majority of the justices held that a city's exercise of eminent domain power in furtherance of a privately initiated economic development plan satisfied the Constitution's Fifth Amendment ``public use'' requirement despite the absence of any blight. Four justices dissented in Kelo and public opinion turned sharply against the decision immediately after it was issued.

It's possible, though merely speculative, that the public ire aimed at Kelo informed what became a majority of justices in Jones v. Flowers. In a passage by Chief Justice Roberts, the Court notes, ``when a letter is returned by the post office, the sender will ordinarily attempt to resend it, if it is practicable to do so. This is especially true when, as here, the subject matter of the letter concerns such an important and irreversible prospect as the loss of a house.''

Not only lawyers but all homeowners could benefit from knowing how the Court grapples with legal issues governing the rights to their houses. My legislation creates the opportunity for all interested Americans to watch the Court in action in cases like these. From his perch on the High Court one justice has been heard to contend that most Americans could care less about the arcane legal issues argued before the Court. But as elected representatives of the people we must endeavor to view America from a bottoms-up, rather than a top-down perspective.

Regardless of one's view concerning the merits of these decisions, it is clear that they frequently have a profound effect on the interplay between the government, on the one hand, and the individual on the other. So, it is with these watershed decisions in mind that I introduce legislation designed to make the Supreme Court less esoteric and more accessible to common men and women who are so clearly affected by its decisions.

Given the enormous significance of each vote cast by each justice on the Supreme Court, televising the proceedings of the Supreme Court will allow sunlight to shine brightly on these proceedings and ensure greater public awareness and scrutiny.

In a democracy, the workings of the government at all levels should be open to public view. With respect to oral arguments, the more openness and the more real the opportunity for public observation the greater the understanding and trust. As the Supreme Court observed in the 1986 case of Press-Enterprise Co. v. Superior Court, ``People in an open society do not demand infallibility from their institutions, but it is difficult for them to accept what they are prohibited from observing.''

It was in this spirit that the House of Representatives opened its deliberations to meaningful public observation by allowing C-SPAN to begin televising debates in the House chamber in 1979. The Senate followed the House's lead in 1986 by voting to allow television coverage of the Senate floor.

Beyond this general policy preference for openness, however, there is a strong argument that the Constitution requires that television cameras be permitted in the Supreme Court.

It is well established that the Constitution guarantees access to judicial proceedings to the press and the public. In 1980, the Supreme Court relied on this tradition when it held in Richmond Newspapers v. Virginia that the right of a public trial belongs not just to the accused, but to the public and the press as well. The Court noted that such openness has ``long been recognized as an indisputable attribute of an Anglo-American trial.''

Recognizing that in modern society most people cannot physically attend trials, the Court specifically addressed the need for access by members of the media: ``Instead of acquiring information about trials by first hand observation or by word of mouth from those who attended, people now acquire it chiefly through the print and electronic media. In a sense, this validates the media claim of acting as surrogates for the public. [Media presence} contributes to public understanding of the rule of law and to comprehension of the functioning of the entire criminal justice system.''

To be sure, a strong argument can be made that forbidding television cameras in the court, while permitting access to print and other media, constitutes an impermissible discrimination against one type of media over another. In recent years, the Supreme Court and lower courts have repeatedly held that differential treatment of different media is impermissible under the First Amendment absent an overriding governmental interest. For example, in 1983 the Court invalidated discriminatory tax schemes imposed only upon certain types of media in Minneapolis Star & Tribune Co. v. Minnesota Commissioner of Revenue. In the 1977 case of ABC v. Cuomo, the Second Circuit rejected the contention by the two candidates for mayor of New York that they could exclude some members of the media from their campaign headquarters by providing access through invitation only. The Court wrote that: ``Once there is a public function, public comment, and participation by some of the media, the First Amendment requires equal access to all of the media or the rights of the First Amendment would no longer be tenable.''

However, in the 1965 case of Estes v. Texas, the Supreme Court rejected the argument that the denial of television coverage of trials violates the equal protection clause. In the same opinion, the Court held that the presence of television cameras in the Court had violated a Texas defendant's right to due process. Subsequent opinions have cast serious doubt upon the continuing relevance of both prongs of the Estes opinion.

In its 1981 opinion in Chandler v. Florida, the court recognized that Estes must be read narrowly in light of the state of television technology at that time. The television coverage of Estes' 1962 trial required cumbersome equipment, numerous additional microphones, yards of new cables, distracting lighting, and numerous technicians present in the courtroom. In contrast, the court noted, television coverage in 1980 can be achieved through the presence of one or two discreetly placed cameras without making any perceptible change in the atmosphere of the courtroom. Accordingly, the Court held that, despite Estes, the presence of television cameras in a Florida trial was not a violation of the rights of the defendants in that case. By the same logic, the holding in Estes that exclusion of television cameras from the courts did not violate the equal protection clause must be revisited in light of the dramatically different nature of television coverage today.

Given the strength of these arguments, it is not surprising that over the last two decades there has been a rapidly growing acceptance of cameras in American courtrooms which has reached almost every court except for the Supreme Court itself.

On September 6, 2000, the Senate Judiciary Committee's Subcommittee on Administrative Oversight and the Courts held a hearing titled ``Allowing Cameras and Electronic Media in the Courtroom.'' The primary focus of the hearing was Senate bill S. 721, legislation introduced by Senators Grassley and Schumer that would give Federal judges the discretion to allow television coverage of court proceedings. One of the witnesses at the hearing, the late Judge Edward R. Becker, then- Chief Judge U.S. Court of Appeals for the Third Circuit, spoke in opposition to the legislation and the presence of television cameras in the courtroom. The remaining five witnesses, however, including a Federal judge, a State judge, a law professor and other legal experts, all testified in favor of the legislation. They argued that cameras in the courts would not disrupt proceedings but would provide the kind of accountability and access that is fundamental to our system of government.

On November 9, 2005, the Judiciary Committee held a hearing to address whether Federal court proceedings should be televised generally and to consider S. 1768, my earlier version of this bill, and S. 829, Senator Grassley's ``Sunshine in the Courtroom Act of 2005.'' During the November 9 hearing, most witnesses spoke favorably of cameras in the courts, particularly at the appellate level. Among the witnesses favorably disposed toward the cameras were Peter Irons, author of May It Please the Court, Seth Berlin, a First Amendment expert at a local firm, Brian Lamb, founder of C-SPAN, Henry Schleif of Court TV Networks, and Barbara Cochran of the Radio-Television News Directors Association and Foundation.

The notable exception was the Honorable Judge Jan DuBois of the Eastern District of Pennsylvania, who testified on behalf of the Judicial Conference. Judge DuBois warned of problems particularly at the trial level, where witnesses who appear uncomfortable because of cameras might seem less credible to jurors. I note, however, that appellate courts do not appear susceptible to this criticism because there are no witnesses or jurors present for appellate arguments.

The Judiciary Committee considered and passed both bills on March 30, 2006. The Committee vote to report S. 1768 was 12-6, and the bill was placed on the Senate Legislative Calendar. Unfortunately, due to the press of other business neither bill was allotted time on the Senate Floor. Again, in the 110th Congress, I introduced this legislation, and it was reported out of the Judiciary Committee by a vote of 11-7.

During their confirmation hearings over the past two years, Chief Justice John Roberts stated he would keep an open mind on the issue and Justice Alito stated that as a circuit judge he unsuccessfully voted, in the minority, to permit televised open proceedings in the Third Circuit. I applaud the fact the new Chief Justice has taken steps to make the Court more open and to ensure the timely publication of audio recordings of the arguments as well as the written transcripts.

In my judgment, Congress, with the concurrence of the President, or overriding his veto, has the authority to require the Supreme Court to televise its proceedings. Such a conclusion is not free from doubt and is highly likely to be tested with the Supreme Court, as usual, having the final word. As I see it, there is clearly no constitutional prohibition against such legislation.

Article 3 of the Constitution states that the judicial power of the United States shall be vested ``in one Supreme Court and such inferior Courts as the Congress may from time to time ordain and establish.'' While the Constitution specifically creates the Supreme Court, it left it to Congress to determine how the Court would operate. For example, it was Congress that fixed the number of justices on the Supreme Court at nine. Likewise, it was Congress that decided that any six of these justices are sufficient to constitute a quorum of the Court. It was Congress that decided that the term of the Court shall commence on the first Monday in October of each year, and it was Congress that determined the procedures to be followed whenever the Chief Justice is unable to perform the duties of his office.

Beyond such basic structural and operational matters, Congress also controls more substantive aspects of the Supreme Court. Most importantly, it is Congress that in effect determines the appellate jurisdiction of the Supreme Court. Although the Constitution itself sets out the original jurisdiction of the Court, it provides that appellate jurisdiction exists ``with such exceptions and under such regulations as the Congress shall make.''

Some objections have been raised to televised proceedings of the Supreme Court on the ground that it would subject justices to undue security risks. My own view is such concerns are vastly overstated. Well-known members of Congress walk on a regular basis in public view in the Capitol complex. Other very well-known personalities, presidents, vice presidents, cabinet officers, all are on public view with even incumbent presidents exposed to risks as they mingle with the public. Such risks are minimal in my view given the relatively minor ensure that Supreme Court justices would undertake through television appearances. Also, any concerns could be mitigated by focusing only on the attorneys presenting arguments. There is no requirement that the justices permit the cameras to focus on the bench.

As I explained earlier, the Supreme Court could, of course, permit television through its own rule but has decided not to do so. Congress should be circumspect and even hesitant to impose a rule mandating the televising of Supreme Court proceedings and should do so only in the face of compelling public policy reasons. The Supreme Court has such a dominant role in key

decision-making functions that their proceedings ought to be better known to the public; and, in the absence of Court rule, public policy would be best served by enactment of legislation requiring the televising of Supreme Court proceedings.

This legislation embodies sound policy and will prove valuable to the all Americans. I urge my colleagues to support this bill.

Mr. President, I sought recognition to introduce the Free Flow of Information Act of 2009. I am honored to be joined in my efforts by Senators Schumer, Lugar and Graham, who are original cosponsors. Some 242 years ago, on January 16, 1767, Thomas Jefferson remarked in a letter to Col. Edward Carrington, ``Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter.'' We take our free press for granted because it is so ingrained in our history. But we need only look at free press movements in fledgling democracies to appreciate how sometimes fragile and easily chilled freedom of press truly is.

The Free Flow of Information Act protects the public interest by ensuring an informed citizenry. In the past three years the Department of Justice has provided inconsistent numbers of subpoenaed journalists to the Judiciary Committee. We know from the public record, however, that at least 19 journalists have been subpoenaed by federal and special prosecutors for confidential source information since 2001 claim. Among them are Judith Miller, Matt Cooper, Tim Russert, Lance Williams, Mark Fainaru-Wada, and Philip Shenon. We also know 4 journalists have been imprisoned at the request either of the DoJ, U.S. Attorneys, or special prosecutors since 2000. Josh Wolf, Judith Miller, Jim Taricani, Vanessa Leggett. Collectively, these journalists have spent over 19 months imprisoned. Journalists who are not jailed for failing to comply with subpoenas still suffer the prospect of being held in contempt. Several have suffered this fate: Toni Locy, James Stewart, Walter Pincus, Jim Taricani.

In addition to the subpoenas from special prosecutors mentioned above, more than a dozen reporters have received subpoenas in civil suits, such as the Wen Ho Lee and Hatfill privacy lawsuits against the government. A preliminary report on the 2007 Media Subpoena Survey conducted by Professor RonNell Andersen Jones at the Law College Foundation at the University of Arizona states: 761 responding news organizations reported receiving a total of 3,602 subpoenas seeking information or material relating to newsgathering activities in calendar year 2006. Of these, 335 were subpoenas arising out of proceedings that took place in a federal forum. Sixty-four percent of responding newsroom leaders believe the frequency of media subpoenas to be greater than it was five years ago. Fifty percent of the media companies believe the risk of their own organization receiving a subpoena is greater than it was five years ago, while only 5 percent believe the risk to be less.

This bipartisan legislation would establish a qualified reporters' privilege protecting them from being compelled to identify confidential source information. The bill seeks to reconcile reporters' need to maintain confidentiality, in order to ensure that sources will speak openly and freely with the media, with the public's right to effective law enforcement and fair trials. The situation in the United States today is that journalists are subject to a compulsory process to disclose confidential informants--at least in Federal courts. At the State level, there are many laws providing qualified privileges for journalists. Prior versions of this bill garnered the support of numerous bipartisan cosponsors, as well as 39 media organizations, including the Washington Post, The Hearst Corporation, Time Warner, ABC Inc., CBS, CNN, The New York Times Company, and National Public Radio.

In 2005 I cosponsored two prior bills and was principle author of yet another. In the 110th Congress, I introduced S. 1035 the Free Flow of Information Act of 2007, along with Senator Schumer, and Senators Lugar, Graham, and Dodd other senators to join as cosponsors were Senators Leahy, Johnson, Boxer, Klobuchar, Salazar, Obama, Clinton, Dole, Murray, Landrieu, Webb, Tester, Lieberman, Durbin, Baucus, and Lautenberg. On October 4, 2007, the Committee on the Judiciary favorably reported S.2035 out of committee by a 15-4 vote, which marked the first time a reporters' privilege bill had ever passed out of the Senate Judiciary Committee.

On March 6, 2008, I, along with Senator Leahy, sent a letter to Majority Leader Reid and Minority Leader McConnell asking that S. 2035 receive floor time for full Senate consideration. They answered our call. On July 30, 2008, the Senate entertained a cloture vote on the motion to proceed to the measure that failed by a vote of 51-43. Nonetheless, the bill continues to enjoy broad bipartisan support-- including the pledged support of former Senator, now--President Barack Obama. I urge all of my colleagues to join me in passing the Free Flow of Information Act of 2009, its high time we stop jailing or holding in contempt reporters who, in good faith, protect their confidential sources even in the face of a government subpoena.

There has been a growing consensus that we need to establish a Federal journalists' privilege to protect the integrity of the news gathering process, a process that depends on the free flow of information between journalists and whistleblowers, as well as other confidential sources.

Under my chairmanship, the Judiciary Committee held three separate hearings on this issue at which we heard from 20 witnesses, including prominent journalists like William Safire and Judith Miller, current and former Federal prosecutors, including former Deputy Attorney General Paul McNulty, and First Amendment scholars.

These witnesses demonstrated that there are two vital, competing concerns at stake. On one hand, reporters cite the need to maintain confidentiality in order to ensure that sources will speak openly and freely with the news media. The renowned William Safire, former columnist for the New York Times, testified that ``the essence of news gathering is this: if you don't have sources you trust and who trust you, then you don't have a solid story--and the public suffers for it.'' Reporter Matthew Cooper of Time Magazine said this to the Judiciary Committee: ``As someone who relies on confidential sources all the time, I simply could not do my job reporting stories big and small without being able to speak with officials under varying degrees of anonymity.''

On the other hand, the public has a right to effective law enforcement and fair trials. Our judicial system needs access to information in order to prosecute crime and to guarantee fair administration of the law for plaintiffs and defendants alike. As a Justice Department representative told the Committee, prosecutors need to ``maintain the ability, in certain vitally important circumstances, to obtain information identifying a source when a paramount interest is at stake. For example, obtaining source information may be the only available means of preventing a murder, locating a kidnapped child, or identifying a serial arsonist.''

As Federal courts have considered these competing interests, they adopted rules that went in several different directions. Rather than a clear, uniform standard for deciding claims of journalist privilege, the Federal courts currently observe a ``crazy quilt'' of different judicial standards.

The confusion began 36 years ago, when the Supreme Court decided Branzburg v. Hayes. The Court held that the press' First Amendment right to publish information does not include a right to keep information secret from a grand jury investigating a criminal matter. The Supreme Court also held that the common law did not exempt reporters from the duty of every citizen to provide information to a grand jury.

The Court reasoned that just as newspapers and journalists are subject to the same laws and restrictions as other citizens, they are also subject to the same duty to provide information to a court as other citizens. However, Justice Powell, who joined the 5-4 majority, wrote a separate concurrence in which he explained that the Court's holding was not an invitation for the Government to harass journalists. If a journalist could show that the grand jury investigation was being conducted in bad faith, the journalist could ask the court to quash the subpoena. Justice Powell indicated that courts might assess such claims on a case-by-case basis by balancing the freedom of the press against the obligation to give testimony relevant to criminal conduct.

In attempting to apply Justice Powell's concurring opinion, Federal courts have split on the question of when a journalist is required to testify. In more than three decades since Branzburg, the Federal courts are split in at least three ways in their approaches to Federal criminal and civil cases.

With respect to Federal criminal cases, five circuits apply Branzburg so as to not allow journalists to withhold information absent governmental bad faith. Four other circuits recognize a qualified privilege, which requires courts to balance the freedom of the press against the obligation to provide testimony on a case-by-case basis. The law in the District of Columbia Circuit is unsettled.

With respect to Federal civil cases, 9 of the 12 circuits apply a balancing test when deciding whether journalists must disclose confidential sources. One circuit affords journalists no privilege in any context. Two other circuits have yet to decide whether journalists have any privilege in civil cases. Meanwhile, 49 States plus the District of Columbia have recognized some form of reporters' privilege within their own jurisdictions. Thirty-one States plus the District of Columbia have passed some form of reporter's shield statute, and 18 States have recognized a privilege at common law.

There is little wonder that there is a growing consensus concerning the need for a uniform journalists' privilege in Federal courts. This system must be simplified.

Today, we move toward resolving this problem by introducing the Free Flow of Information Act of 2009. The purpose of this bill is to guarantee the flow of information to the public through a free and active press, while protecting the public's right to effective law enforcement and individuals' rights to the fair administration of justice.

The bill provides a qualified privilege for reporters to withhold from Federal courts, prosecutors, and other Federal entities, confidential source information and documents and materials obtained or created under a promise of confidentiality. However, the bill recognizes that, in certain instances, the public's interest in law enforcement and fair trials outweighs a source's interest in remaining anonymous through the reporter's assertion of a privilege. Therefore, it allows courts to require disclosure where certain criteria are met.

Under the legislation, in most criminal investigations and prosecutions, the Federal entity seeking the reporter's source information must show that there are reasonable grounds to believe that a crime has occurred, and that the reporter's information is essential to the prosecution or defense. In criminal investigations and prosecutions of leaks of classified information, the Federal entity seeking disclosure must additionally show that the leak caused significant, clear, and articulable harm to national security. In noncriminal actions, the Federal entity seeking source information must show that the reporter's information is essential to the resolution of the matter.

In all cases and investigations, the Federal entity must demonstrate that nondisclosure would be contrary to the public interest. In other words, the court must balance the governmental need for the information against the public interest in newsgathering and the free flow of information.

Further, the bill ensures that Federal Government entities do not engage in ``fishing expeditions'' for a reporter's information. The information a reporter reveals must, to the extent possible, be limited to verifying published information and describing the surrounding circumstances. The information must also be narrowly tailored to avoid compelling a reporter to reveal peripheral or speculative information.

Finally, the Free Flow of Information Act adds layers of safeguards for the public. Reporters are not allowed to withhold information if a Federal court concludes that the information is needed for the defense of our Nation's security, as long as it outweighs the public interest in newsgathering and maintains the free flow of information to citizens, or to prevent an act of terrorism. Similarly, journalists may not withhold information reasonably necessary to stop a kidnapping or a crime that could lead to death or physical injury. Also, the bill ensures that both crime victims and criminal defendants

will have a fair hearing in court. Under this bill, a journalist who is an eyewitness to a crime or tort or takes part in a crime or tort may not withhold that information on grounds of the qualified privilege. Journalists should not be permitted to hide from the law by writing a story and then claiming a reporter's privilege.

It is time for Congress to clear up the ambiguities journalists and the Federal judicial system face in balancing the protections journalists need in providing confidential information to the public with the ability of the courts to conduct fair and accurate trials. I urge my colleagues to support this legislation and help create a fair and efficient means to serve journalists and the news media, prosecutors and the courts, and most importantly the public interest on both ends of the spectrum.

Mr. President. I am introducing the Free Speech Protection Act of 2009 to address a serious challenge to one of the most basic protections in our Constitution. American journalists and academics must have the freedom to investigate, write, speak, and publish about matters of public importance, limited only by the legal standards laid out in our First Amendment jurisprudence, including precedents such as New York Times v. Sullivan. Despite the protection for free speech under our own law, the rights of the American public, and of American journalists who share information with the public, are being threatened by the forum shopping of libel suits to foreign courts with less robust protections for free speech.

These suits are filed in, and entertained by, foreign courts, despite the fact that the challenged speech or writing is written in the United States by U.S. journalists, and is published or disseminated primarily in the United States. The plaintiff in these cases may have no particular connection to the country in which the suit is filed. Nevertheless, the U.S. journalists or publications who are named as defendants in these suits must deal with the expense, inconvenience and distress of being sued in foreign courts, even though their conduct is protected by the First Amendment.

An example of why the legislation is necessary is found in litigation involving Dr. Rachel Ehrenfeld, a U.S. citizen and Director of the American Center for Democracy, whose articles have appeared in the Wall Street Journal, the National Review, and the Los Angeles Times. She has been a scholar with Columbia University, the University of New York School of Law, and Johns Hopkins, and has testified before Congress. Dr. Ehrenfeld's 2003 book, ``Funding Evil: How Terrorism is Financed and How to Stop It'', which was published solely in the United States by a U.S. publisher, alleged that a Saudi Arabian subject and his family financially supported Al Qaeda in the years preceding the attacks of September 11. He sued Ehrenfeld for libel in England, although only 23 books were sold there. Why? Because under English law, it is not necessary for a libel plaintiff to prove falsity or actual malice as is required in the United States.

Dr. Ehrenfeld did not appear, and the English court entered a default judgment for damages, an injunction against publication in the United Kingdom, a ``declaration of falsity'', and an order that she and her publisher print a correction and an apology.

Dr. Ehrenfeld sought to shield herself with a declaration from both federal and state courts that her book did not create liability under American law, but jurisdictional barriers prevented both the Federal and New York State courts from acting. Reacting to this problem, the Governor of New York, on May 1, 2008, signed into law the ``Libel Terrorism Protection Act.'' Congress must now take similar action. I note that the person who sued Dr. Ehrenfeld has filed dozens of lawsuits in England, and there is a real danger that other American writers and researchers will be afraid to address this crucial subject of terror funding and other important matters. Other countries should be free to have their own libel law, but so too should the United States. Venues that have become magnets for defamation plaintiffs from around the world permit those who want to intimidate our journalists to succeed in doing so. The stakes are high. The United Nations in 2008 noted the importance of free speech and a free press, and the threat that libel tourism poses to the world.

Following the New York example, the legislation my co-sponsors and I introduce today confers jurisdiction on federal courts to bar enforcement of foreign libel judgments if the material at issue would not constitute libel under U.S. law. Significantly, it also deters foreign suits in the first place by permitting American defendants to countersue from the moment papers are served on them. Damages available in the countersuit include the amount at issue in the foreign libel suit as well as treble damages if the foreign suit is part of a scheme to suppress a U.S. person's first amendment rights.

This deterrent mechanism is critical because those who bring these foreign libel suits are more interested in intimidating the authors than in actually collecting damages. They know that even if a foreign judgment cannot be enforced in the United States, the cost of defending the suit and the penalty for taking a default judgment can have a chilling effect on American writers and publishers. In particular, under English law a contempt citation may issue against authors or publishers who fail to satisfy default judgments, pursuant to which their property may be seized and they may be imprisoned. What is worse, defendants can no longer skirt the consequences merely by avoiding contact with England. Under recent European Commission regulations, default judgments for monetary claims are enforceable in all EU countries except Denmark.

The potentially severe ramifications of a default judgment make clear that merely barring enforcement of a foreign libel judgment in U.S. courts is entirely insufficient particularly for publishers with European offices. While it is important to bar enforcement, in the words of a New York Times editorial, that does ``not go as far as it could.''

I often remark that the Senate is the world's greatest deliberative body and all the facts and arguments ought to be examined before it acts. Accordingly, I must address a letter in opposition to this bill from a prominent British libel lawyer and explain why his arguments are unpersuasive.

He notes that a ``U.S. citizen . . . knocked down by the negligent driving'' of a London taxi driver is ``just as entitled as any British citizen'' to sue in England for damages. Why should a U.S. citizen ``not be entitled on the same basis, like any other UK citizen, to sue for damages to his reputation?'' The answer, of course, is that the analogy is inapt. In that hypothetical, the plaintiff sues the defendant in the defendant's jurisdiction for a harm committed and suffered there, an injury that is universally recognized as a tort. By contrast, the plaintiff in a foreign libel action purposely avoids suing in the jurisdiction where the defendant journalist writes and publishes, a jurisdiction where the material is not libelous. The proper analogy would be if the injured American had sued the taxi driver in the United States instead of England because the driver's conduct would not constitute negligence under English law. That hardly seems fair play. Our bill is designed specifically to prevent such forum shopping.

That essay also asks whether ``legislators will extend their intervention'' to commercial matters such as contracts and debts and warns that such extension could trigger ``retaliatory action on the part of UK legislators.'' Actually, such extension has already happened, but at the hands of British legislators not American ones. In the antitrust context, British law bars enforcement of foreign judgments for treble damages such as those awarded by U.S. courts. In addition, it allows a British corporation, against whom a judgment for treble damages was entered in a foreign court, to recover from the plaintiff any excess over actual damages. In any event, this bill is confined to the narrow area of core First Amendment rights.

``Perhaps of most significance'' he continues in his letter, is that to his knowledge ``very few of these claims have actually come before UK courts.'' But it is the chilling effect and the

mere threat of litigation that suffices to silence authors; there is no need to try the cases. In 2004, fear of a lawsuit forced Random House UK to cancel publication of ``House of Bush, House of Saud,'' a best seller in the U.S. that was written by an American author. Similarly, in 2007, the threat of a lawsuit compelled Cambridge University Press to apologize and destroy all available copies of ``Alms for Jihad,'' a book on terrorism funding by American authors. Indeed, an October 2008 study reported in The Guardian found that ``[m]edia companies are becoming less willing to fight defamation court cases all the way to a verdict. . . . With the burden of proof effectively resting on the defendant'' and attorneys' fees paid by the loser, defendants ``are forced to enter into settlement negotiations.''

Numerous organizations have endorsed the bill we offer today, including the ACLU and the Anti-Defamation League, as well as numerous journalists and publishers groups. Op-eds and editorials supporting our efforts have run in national papers, including the New York Times on September 15, 2008 and the New York Sun on July 28, 2008. Also drawing attention to the issue was an op-ed Senator Lieberman and I penned that ran in the Wall Street Journal on July 14, 2008.

Freedom of speech, freedom of the press, freedom of expression of ideas, opinions, and research, and freedom of exchange of information are all essential to the functioning of a democracy. They are also essential in the fight against terrorism.

I thank Senators Lieberman and Schumer, as well as Congressman Pete King and his cosponsors for working with me on this important bill.

I thank the Chair, and I thank the gentleman from California who was previously speaking for his insightful analysis of where the country currently finds itself with regard to this macro issue of Wall Street reform and banking reform in this country, something which Members on both sides of the aisle agree wholeheartedly is necessary and needed to be done. We just need to make sure that we do so in a thoughtful manner so we don't do more harm than good.

When President Obama and Democrats claim Republicans are doing the bidding of big Wall Street banks and oppose all financial service reg reform, you know, you hear that over and over again by some of the commentators on TV, I have to say, you find it laughable on a number of different levels.

First of all, think about this, it is the Democrat bills that have institutionalized permanent bailouts and too big to fail. It is no wonder then that Democrats have received such strong fund raising support from the titans of Wall Street.

As I stand here, I'm not sure I have all of those numbers before me. Later on I may. Off the top of my head, those numbers stand out as something to the tune of something like around $15 million from the various titans of Wall Street, as they put it, to the President's campaign in the last cycle. I think the number I saw just the other day, and the most recent numbers out for the 2008 cycle of Congress, something like $2.9 million from these various Wall Street firms and banks going to the majority party, the Democrat Party, in the last election; twice as much as what is going to Republicans.

Maybe it is no wonder that they have received such strong support from Wall Street that they would then put in a bill that would see to it that Wall Street is taken care of in the sense of the perpetuation of bailouts at the taxpayers' expense.

Not only do Republicans support real financial service reform, the House Republicans were the first ones to come forward with a comprehensive reform plan that actually ends too big to fail. It ends bailouts, and we also don't succumb to the Democrats' urge to take yet another vast portion of our economy with government overreach and intrusion and bullying of private businesses. Think about that.

The reason I point out that Republicans came out with a proposal earlier than the majority party, earlier than the White House, earlier than the Treasury. I remember being in this Chamber talking on this floor early last year in 2009, in January and February and March saying we need to attack this problem on Wall Street, we need to attack the morass that we are finding our country in economically. We needed to get reform done. All of the while Treasury was telling us we will have something next week, we will have something next week.

Week after week passed, and we finally ended our waiting for them and we put our minds together. We listened to the American public and we listened to the experts. We listened to the people who were involved with this and the people who also would be hurt by wrong actions being taken. We took all of that advice and we came up with a Republican solution to this proposal, and actually had it done before the White House ever even came up with their white paper that they presented at the White House.

I remember going to that presentation where the President came out and said here is my solution, here is the problem, just laid it out and left the stage. Didn't take a single question from the audience. That is how it has been ever since, left the stage and has not listened to what the American public and those involved have to say about their plan.

Before I go to our Republican plan, I would like to remind our colleagues over in the Senate on the other side, who likely will be asked to vote on the Obama-Dodd-Frank plan, and they will be likely to vote on it again soon. They voted on it earlier, and I guess they will be doing it again today, if they haven't done so already. And the way it is coming down in the press reports is that Harry Reid sees it as a win/win for them to just continue to put vote after vote after vote. The last vote Republicans stood together saying they would vote ``no'' on any bill that would perpetuate bailouts to taxpayers for these financial institutions. That is a good thing. We hope they stand firm on that.

There is a whole host of reasons, in addition to that, why both Democrats and Republicans should vote against that 1,300-page permanent bailout bill.

Let me digress for a moment on that issue. We are just now learning of the ramifications, unintended and otherwise, from the health care bill; you know, that 2,000-page bill that we know no one read on this floor and understood all of the ancillary portions of it, and yet it passed in the House, passed in the Senate, and came back to the House again and passed overwhelmingly after a lot of arm twisting by the White House and others to get all of the votes they needed to get it done.

But you could see during the debate in the health care bill, when poignant questions and particular questions were raised on particular portions of the bill, there was no one on the other side of the aisle who could honestly say I have read through the bill, all of the several thousand pages, and all of the ancillary references to it and had a complete understanding of it. Yet that bill passed, and now we are seeing the ramifications from that.

A study came out this past week from this administration saying the actual cost of health care, remember President Obama said he was going to actually lower it, would go up by a percentage or so over a 10-year period of time. Remember the President also promised no one would lose their health care plan, they didn't read the bill. Because they didn't read the bill, they find out now in another study that about half of those senior citizens on the Advantage program of Medicare will be losing their plans. That is the ramifications when you try to rush something through without reading it and understanding it.

Now back to the point, here we have over in the Senate, we have a 1,300-page plus bill that didn't go through the committee process and didn't have an opportunity for vetting and hearing from the various witnesses and experts, that, too, Senator Reid is trying to push through this week against all odds and truly understanding what they are doing over there.

The bill they are attempting to work on and move quickly without that understanding codifies the government policies invoked to bail out AIG, Bear Stearns, and others, and it does so, in large part, by creating a permanent $50 billion bailout fund which, I should add, can be endlessly reloaded. Let me make a point on that.

They say we are going to set up this $50 billion fund to bail out the future bank losses and what have you. Well, if the next day they need that $50 billion and it goes down, the next day after that they can go right back to the pot of money and try to raise it back up again, and go to another $50 billion. So $50 billion is really a placeholder for 50, 100, 150, 200, 250, on and on and on it could go, bailing out failing institutions, so-called too-big-to-fail institutions, and potentially also indirectly put the American taxpayer on the hook.

I should probably explain just one example of that. Look at AIG. What was the number we saw on AIG. I think it was around $80 billion needed to bail it out. Here is the seminal question which I think we put to Secretary Geithner. I don't know if we ever got a satisfactory answer from him or anyone else who proposed the legislation in the Senate. The questions was: Had you had this bill, the Dodd bill, in place prior to AIG, would the outcome have been any different?

Well, there you needed about $80 billion, all from the American taxpayers. Here they say we will have $50 billion. Obviously $50 billion is not enough; so in the short term, where will you get that money. The bill, the Senate Democrat Obama-Dodd-Frank bill basically says you can go to the Federal Government, the Federal Reserve, they can basically front end load that money to the facility so they can loan it out to whether it is AIG next time or another Lehman in the future, or what have you. The American taxpayer at that point in time is now on the hook for however much money they want to lend out without basically any limit.

Other portions of the bill that are problematic besides creating a permanent $50 billion bailout fund, which, as I said, would be endlessly reloaded, paid for by taxing financial firms to pay for other larger firms' failure. I think that is an important point. If you have a local community bank in your community, you have to ask them, What do you think about the fact that potentially, depending upon your size, you could be held liable for the egregious mistakes and failures of these huge titans of Wall Street who make absurd investment decisions. I think most of your local community banks that potentially could be on the hook would say, it is nothing good for us, it is nothing good for our local community because any time you put a tax on something, one bank or another, it hurts the businesses in that community.

Another major point that is problematic with the bill, it expands the implied government guarantee in the financial marketplace for the largest firms. Sort of along the point I was just making here, it is the biggest firms in Wall Street that are going to be able to say, Thank goodness, thank goodness we made all of these contributions to those people in Washington who are now supporting this legislation of the Dodd-Frank-Obama bill because now we know who our friends are, and of course, it is on the other side of the aisle, who are supporting this legislation that will allow for their perpetual bailout.

Another problem with the bill is it continues to place taxpayers on the hook for billions, if not trillions of dollars for bailed out failed nonbanks. I say trillions of dollars because there is nothing in that 1,300 pages of legislation that is sitting in the other House, in the Senate right now that Senator Reid wants them to push right through, vote on without having full understanding of it. There is nothing in that bill that would say, American taxpayer, your liability to the big banks in New York and around the country is going to be limited at this much or this much. There is no limit. It can just go up to billions of dollars, tens of billions of dollars, hundreds of billions of dollars, or trillions and trillions of dollars potentially.

And if you think trillions are out of sight as far as the potential, all we have to look at is the GSEs, Fannie Mae and Freddie Mac, and where is the limit on the potential loss to the American taxpayer there. I think it is around $389 billion that they have scored that it will cost taxpayers over the next 10 years coming out of our Treasury, which means out of our pockets. But there is a potential there with several trillions of dollars of potential losses on their books that we can all Americans be eventually liable for. So trillions are not out of the question when you are talking about such mammoth institutions and trading as we have seen here.

To continue, with the problems of the Senate financial services so- called reform bill that Senator Reid is trying to push through the Senate as we speak without anyone really understanding or reading it, the bill continues the pattern of government overreach that we have seen throughout the Obama administration and with the Democrats controlling here in the House.

It also continues the pattern of government picking winners and losers and political bullying and deciding just who it is will succeed in this country and who it is that is going to fail rather than through the private market and rather than through the rule of law and the rule of the bankruptcy code.

Did we ever think that we would come to the day when it would be the politicians who would decide: I think that business over there should do well and thrive and succeed, as opposed to this business over here. I don't have much favor for them for one reason or another, maybe they are not a friend of mine politically or otherwise, and the politicians says, That business can go into the dust and not succeed.

Did we ever think we would get to the day when it would be Washington and Washington politicians and bureaucrats who would say, I am going to pick that one as a winner, and that one over there is a loser.

That, in essence, is basically what we find in the 1,300-page bill that Senator Reid would like to see passed without any real debate or discussion or amendments or improvements upon because it allows the bureaucrats of various Federal agencies, these appointed and unelected individuals, to make those basically life-and-death decisions for industry and life-and-death decisions for businesses as well.

Did we ever think we would get to the point where those decisions are not made by the markets because this business actually did do a better job in deciding how it would grow, how it would invest, what sort of services it would provide? That's how the free market has always thought that businesses should thrive. And if this business over here decides that they make poor investment decisions, poor customer service, poor decisions, generally, on how it's running, then the market should say that is the business that will fail.

Well, we're going to throw that all aside now with this piece of legislation and say the market forces are not going to be it. What people decide on situations of who should win and who should lose are not going to be the preeminent decision basis anymore. Instead it's going to be politicians and bureaucrats, a sad day that most Founding Fathers would never have thought we would get to.

Another problem with the Senate bill, the Frank-Dodd bill that Harry Reid is trying to push through the Senate right now without a debate and without a full discussion and disclosure of an understanding of the entire bill, is that the bill will restrict access to credit for families and small businesses and ultimately make credit more expensive and less available.

A recent study points out that the portion of the bill, the CFPA, Consumer Financial Protection Agency, something that they want to create as a brand new agency here in Washington, as if we don't have enough agencies already in Washington, a recent study points out that the CFPA will increase the cost of interest rates that consumers pay by at least 160 basis points. What does that mean? That means if you have a 6 percent loan that you could have gotten today, well, once this bill passes, then it will increase by 160 basis points. That means your 6 percent loan will now be 7.6 percent.

Also, the study shows it will reduce consumer borrowing by at least 2.1 percent. Well, that makes sense. Right now most people, when they're out looking for a car loan or they're looking for a mortgage for the house or a home equity loan to try to make some improvements, one of the first things they do when they sit down with their banker or when they open up the paper to see what the availability of interest rates is, they look to see how much are those interest rates. And you want to get the very best interest rates you can get because every percentage point higher means less money in your pocket at the end of the day and more money in the banker's pockets.

Well, this bill, outside studies have said that when you now start looking for those car loans, student loans, commercial loans, mortgages for your house or mortgages for commercial property, under this bill, because they're adding these new impediments to the access of credit, you will see your rates of interest go up by 1 point, 1.5 points. That 1.5 points can mean a lot of money, a lot of money out of your pocket and mine every time you take a loan. And think about it, is that something we really want to do during this economic morass, these economic troubles that we find ourselves in right now?

I have so many small businesses that come to me right now, owners of small businesses, some are individuals, that say I just can't get credit as it is. I have a good credit rating, I have a good credit position, I've been paying all my bills on time, but when I go out to try to get a loan, I just can't get it. And as it is, the rates that are out there are not just really where I want to be, but I can maybe afford them if I can get those loans.

Well, here we're going to have the Senate now try to pass a bill--and we already passed a version of it in the House, unfortunately--that will say to an individual who is already struggling to get a loan or struggling to pay his current interest, you know, the next time you get this loan, the rates were

here, now they're going to be 1 point, 1.5 points, even higher; more money out of your pocket each time just because we're creating a new agency in Washington with no other real effect except to make the credit availability less than it is now.

Another huge problem with the bill that's before us in the Senate, that already passed the House and potentially will come back to the House for another vote if it unfortunately gets out of the Senate, is that the bill will also cost jobs; and it will cost the jobs at a time when the singular focus in this Congress should be just the opposite. The one main goal that we should be able to work on across the aisle in this House is how to create more jobs all across this country, all 50 States.

I know the average rate for unemployment in this country is just shy of 10 percent; but, boy, you talk to some folks in different parts of this country and you know that the unemployment rate is a lot higher than that: 10 percent, 20 percent, 30 percent, 40 percent, 50, 60 percent higher in certain portions of this country than where it is as a national average. You talk to those people where the long-term unemployment rate is around 15, 16, 17 percent and ask them, What's the most important thing that Congress should be doing right now? They will honestly answer you, Get me a job; Help turn the economy around so unemployment rates start going down again and so I can start supporting my family again.

And what are we doing? What I'm doing is trying to create those jobs. But what is Congress doing? What is the Senate doing right now? What is the Democrat majority doing right now? Well, they're trying to pass a bill over in the Senate that will cost the creation of jobs just at a time when we should try making even more.

Remember I mentioned a study earlier saying that if we pass that Senate bill out of the Senate--today, tomorrow, this week, next week--I mentioned before that if we do so, your credit costs will go up. That same study also found the number of jobs will be impacted in this country as well. And here's what they found: the study found that the CFPA, the Consumer Financial Protection Agency, which is a provision in that bill over in the Senate, will actually reduce net new jobs in the economy by 4.3 percent. Let me repeat that: if the Senate bill were to pass and that new CFPA were to be created, as the President wants it to be created, you would reduce net new jobs in the economy by 4.3 percent. So pass the Senate bill, see the net number of jobs go down by 4.3 percent.

There's another provision in the bill as well, just as an aside-- without getting into the weeds, as they say, portions of the bill--it says the derivative and systemic risk portion of the bill--that's a whole other portion separate from the CFPA, that is a section that tries to regulate and address the issue of derivatives. And Republicans, by the way, as I mentioned in the earlier portion of this hour, did put in language to try to address derivatives and make sure that there is more transparency and accountability there, but the way they're doing it right now over in the Senate, that section will also likely reduce jobs as well, according to outside experts. And why is that?

Well, it's hard to get into without going through a laborious explanation of derivatives and how they all work and what have you; but just understand this, that if you create higher costs for the end users, if you create higher costs, whether it's credits or otherwise, for people who currently use the markets as they are currently configured in an honest, transparent, and open way, if you require certain businesses to say, well, instead of taking this $100,000 that I was going to use to buy some new equipment, a new truck, new manufacturing equipment, or instead of me taking this $1 million I have over here to build a new plant, to hire new employees, to create a new manufacturing base, I'm going to have to use that over here because of all the new rules and regulations that the Senate wants to impose on that business.

I'm going to have to put it over here sort of just sitting in the bank, if you will, as far as capital because of these new derivative requirements. If I can't use it to buy a new truck, if I can't use it to buy new equipment, if I can't use it to build a new building, I basically just have to set it aside as far as margin or capital requirements, what happens to job creation in that business?

If he can't buy the new truck, he's not going to hire a new driver to drive that truck. If he can't use the money to buy a new piece of equipment, he's not going to be able to hire new people in the business to run the equipment. If he can't use the $1 million, or whatever it is, to build a new plant to manufacture something, he's not going to be able to hire new people that are able to run that factory and work in the offices in that factory as well or that business as well because this legislation will basically shift that money, job-creation dollars, from that practical good use for the economy over here to, well, let's say not a job-creating use--another problem of the overall legislation that the Senate is trying to pass as we speak.

So at a time when Americans are pleading with the political leaders to stop government overreach in the economy and in their lives, well, this bill basically, again, doesn't listen to those Americans. The Senate bill basically greatly expands government authority for government bureaucrats to regulate now another huge segment of the economy, including, by the way, non-financial institutions, things like retail stores that offer layaway plans, companies that finance their own sales, and even manufacturers that ensure against their risk.

All these areas had absolutely nothing to do with the economic problems that the country finds itself in today, okay, but all of a sudden, because there is an opportunity out there to grow government, grow government agencies, create new programs at the expense of the taxpayers, as the President's Chief of Staff said--and I paraphrase him--Don't let any good crisis go to waste, we're in a crisis situation, so instead of dealing with the crisis area over here, we're going to start creating all new agencies over here to regulate all different aspects of the economy that were not part of the problem. That's exactly what this legislation that we hear is about to be considered in the Senate, that Senator Reid would like to pass through without the debate, deliberation, and transparency that we would like.

So at a time when Americans are pleading with political leaders to stop the government overreach, this bill greatly expands authority for government bureaucrats, as I say, to regulate huge segments of the economy, including those non-financial institutions, such as the stores and the layaway plans and so on and so forth.

It also allows--and here's a point--it also allows government bureaucrats to take over and actually close a firm. The government, for the first time you're going to be able to say, besides picking winners and losers, as I pointed out before, which is a tremendous overreach of government authority to say for a bureaucrat someplace in Washington or New York or some other place designated by the Washington bureaucrats to say, well, we think that your business should win and your business should lose, besides just picking winners and losers, the Senate bill goes even further than that.

It allows government bureaucrats to take over and close a firm. They can say for whatever reason--hopefully not political, but who knows-- for whatever reason these bureaucrats will say, well, I think that firm over there is one I think the government agency now should take over. Isn't that really too much power in the hands of the government? And doesn't it open up our economy to political bullying rather than the way it should be?

And the way it should be is it should be that a firm's success or ultimate failure should be decided by the free markets, decided by the people of the country whether they think this company is providing the services they like and this company is not providing. That's the way it has been for 200-plus years--or longer than that, actually--in this country, and now we're going to change all that and allow bureaucrats to say, you win, you lose, we're going to take over you, we're going to not take over you; we're going to provide you with a bailout at taxpayers' expense; you're going to have to do it on your own. And you the citizens out there are going to have to all pay the price of this.

Those of you who think you have nothing to do with financial services,

well, you're going to see your interest rates go up. Those of you who are out there who think that this doesn't impact you, well, you may not be able to find a job next year because the net number of new jobs is not going to increase as it would have. It's going to impact upon all of us if we are to pass this failed bill over in the Senate.

Now, several portions of the bill also are handouts to--who do you think? The trial bar. Why is that? Because it will increase lawsuits. It will benefit lawyers, but drive up costs for everybody else. Nothing against lawyers by any means, trial lawyers as well, but do we really need another piece of legislation that will just basically increase the number of lawsuits in this country? Don't we have enough lawsuits already going on? Do we need to set up a structure that fundamentally is done in such a way that most of the experts looking at it are saying, yes, the number of lawsuits is going to increase just because there is so much ambiguity that's out there?

Also, at a time when you're seeing a growing consensus that the Federal Reserve should be less powerful, let's take a look at the Federal Reserve, and isn't there a consensus now. I think we saw bipartisan support that the amount of control and authority and power of the Federal Reserve, I thought there was growing consensus in this country and also in this Congress, in this House, that maybe the Federal Reserve should be reined in a little--or some were saying a whole lot. That's not what is happening over in the Senate.

So at a time when you're seeing a growing consensus that the Federal Reserve should be given less power, not more, the Senate bill greatly expands the Federal regulatory powers. This is done despite the fact the board has a proven track record of failing to identify systemic risks before they actually occur in its overeagerness to pay taxpayers money at risk while conducting fiscal policy without accountability. It has an overeagerness to put taxpayers' money at risk while conducting fiscal policy without any accountability.

And any time we try to get that accountability, I should add just as a side note, what do we get? We get pushback from the Federal Reserve. Pushback, whether it's a Republican idea; pushback, whether it's a Democrat idea to try to put in some additional levels of accountability and transparency. And so despite that, the Senate bill is going to say we're going to give them even more and greater power and control.

Given the extraordinary government interventions into private firms we've already seen with the trampling of the rule of law in order to benefit political favorites in the auto industry, for instance, I'm very uncomfortable with any of these new sweeping powers. The auto industry, I guess, is a clear example of that. It goes back to what I was saying before: Federal Government, bureaucrats saying this company wins, this company loses, and we're going to use the taxpayers' money to prop them up and keep them going.

Let me just go back for one little point I raised before--I didn't want to go into the weeds too much on it--and that was the derivatives portion of the bill. Derivatives, I've heard them described in a number of different ways, insurance policies or such, but without going into the details on how they actually operate, remember this about derivatives, I guess, to take away from my remarks on derivatives: none of the experts that came before the committee--those who use them, those who didn't use them, those who are involved with them, those who are not involved with them, academics and the like--there was no one who said that the problems that we find ourselves in today were because of the structure or the makeup of derivatives themselves. No. I think most of the experts who came to us said it was the fact that you had trading in derivatives without adequate transparency and capital there in certain circumstances, like in the AIG situation.

And then similarly, with the AIG situation you had a situation where the regulators who were charged with knowing what they are doing, having the authority to do so, failed to live up to their obligation to monitor the very entities that they are supposed to be giving oversight to. Isn't it a little bit ironic that we see now in the Senate that those very same failed regulators are going to get even bigger and broader powers.

In any event, on the derivative portion of the bill, what does the Senate bill do? Well, it sets up a really, I don't know what is a good word for it--I guess a technical word would be clumsy--it sets up a clumsy new two-tiered SEC-CFTC regulatory regime over all derivative users. And that is really a huge portion of the economy.

You know, the average person says, ``I don't use derivatives.'' And the average small business might say, ``I don't use derivatives.'' But that small business begins to look one step behind its daily activities, it may find that the source of its credit does in fact use derivatives. That industry that has a particular product that they manufacture, what have you, maybe people in the company that work there don't recognize it, but you talk to the CFO, chief financial officer or otherwise, you will find out that they actually do use derivatives to protect themselves, just like other companies use risk management as mechanisms to protect other portions of their business. So they are used. They are a huge portion of the economy.

And here we have a Senate bill now saying we are going to fool around with this and set up this new two-tiered SEC and CFTC regulatory regime over all the derivative users. And in a way it goes back to my earlier point that it will probably be ripe for litigation and also confusion to say the least.

In all this, there will be some new truly heavy-handed government mandates that are likely to have major unintended consequences that could really make it more difficult for companies to hedge their risks. That's why I say a lot of businesses may not recognize how it impacts upon them. Maybe it is not the company themselves, it is other companies that they deal with, that they have to deal with. If they can't hedge their risks properly, they will find themselves at odds with being able to prosper and do as well next year as they have in the past.

So when the Senate bill tries to do this, what it's really doing is adding huge new costs to risk management. What will that do? That will needlessly tie up companies' moneys that could otherwise be used to create jobs. It goes back to that little analogy I had before saying that if you have a company that says we have X number of dollars in the bank that we are intending to use for new expansion, production, or growth, now that money may be unfortunately tied up over here through all the new regulation and otherwise, and capital margin requirements and the like. And if they can't have it over here to grow the company, prosper the company, and create new jobs and the like, and new benefits for their employees because it's now tied up, who hurts? Who pays the price? It is the employees, it is the economy, it is the community that that business finds itself in.

Now, to all that truly terrible legislation that we see sitting in the Senate that Senator Reid is trying to push through without a true committee process where we could really get into the weeds and find out what is in those 1,300-plus pages and try to understand all the consequences, intended and otherwise, the Republicans do have a comprehensive substitute. It has received unanimous support from the party and those here who have worked on it, and also significant support from those players, both involved with the discussion, academics and otherwise.

And it is really also the only truly bipartisan plan that's out there. Because whether you are a Republican or Democrat, I think most in this country agree on one theme: No more bailouts. So it's bipartisan in the theme, it's bipartisan in the merits, it's bipartisan in the actual language. Its central theme, as I say, is no more bailouts. And our plan depends on an expedited bankruptcy rather than a government-run bailout fund.

Let me give you one, two, three, four points that are in it. It provides comprehensive transparency and accountability among the major traders in the derivative markets without setting up that Byzantine new regulatory regime that I just mentioned a minute ago. It allows for real consumer protection, important, without a bureaucracy that separates consumer protection from

what we call prudential regulation, safety and soundness like we saw with Fannie and Freddie.

I will digress there for 30 seconds. That simply means that you are not going to say that there is somebody sitting over here looking over an institution saying, well, I think you should do this in order to be safe and sound and prudentially run, and you are going to have somebody over here in a totally different silo, a different agency, who is going to be saying, well, I think you should have a consumer product that works this way or works that way. And if they are working at cross- purposes, which one prevails? Well, at the end of the day, the consumer is the one that hurts.

Additionally, third point, the Republican plan reins in the Fed instead of giving it vast new powers. It goes to that point I raised before. The Democrat majority plan in the House and the Senate says, ``Hey, Fed, you've been doing such a wonderful job with monetary policy, you've been doing such a wonderful job with regulation of the institutions under you, you've done such a wonderful job, Federal Reserve, with being able to see the calamities down the road.'' I say of course that all tongue in cheek. They say, ``Well, we're going to make you even larger and more expansive and grow in power.''

Well, not for the Republicans, not for most Americans. Most Americans want us to rein in the Fed. And that is what the Republican bill will do, by giving it less powers than it has right now.

Fourthly, the Republican plan responsibly deals with Fannie and Freddie, one of the biggest culprits in the entire process. Believe it or not, the Senate bill, the Dodd-Frank-Obama bill, does absolutely nothing with regard to Fannie and Freddie and the GSEs. Think about this little number right now. You hear about all the money that was spent over the last year or so out of taxpayer pockets, whether it goes to the Wall Street bailouts, whether it goes to the auto industry, whether it goes to AIG or Bear Stearns and you just name it, all those billions and billions of dollars went out the door. You know which bailout really trumps even all those combined? It would be the GSEs, Fannie Mae and Freddie Mac, where, as I mentioned I think earlier this evening, the number is close to $400 billion already projected to cost the taxpayer over the next 10 years. And the President's plan, the Dodd-Frank plan, is silent on trying to do anything about that.

Not only are they silent about doing anything about that, it's silent as to putting any limits to it. Right now there is no limit to the amount of money that can come out of your pocket and my pocket to bail out these institutions. Something should have been included in there. They did not.

Remember, finally, it was largely government that got us into this situation we find ourselves in in the first place. It was the implosion of Fannie and Freddie that created so many of the other problems that we see across the economic spectrum as we see it today. It was also the easy money policy of the Fed and the errors that were made over time there. It was the misplaced incentives and downright requirements in the housing finance sector that basically encouraged or forced firms to lend to borrowers that shouldn't have been buying a home in the first place. It was government regulators that didn't do their job whom the Democrats would like to further empower and provide a false sense of security and hamper the free markets.

It was all those problems that brought us to the situation that we find ourselves in today. None of those problems are addressed either at all or in a correct manner in the legislation that we see in the Senate right now.

Now is the time that we have an opportunity to do right for the American public. Now is the time we have an opportunity to do right for the economy. Now is the time we have an opportunity to create new jobs and new expansions in the economy, to make the economy of tomorrow better for businesses, for small community banks, for small communities across this country, for families as well. But we can only do that if we work in a truly bipartisan manner to go through the process and begin the discussions on what the root causes of these problems were and to come up with a no-bailout philosophy and approach to this that addresses the GSEs--Fannie Mae and Freddie Mac--that reins in the excessive powers of the Federal Reserve, and addresses the other concerns of job creation and the other concerns of regulation that I have addressed already this evening. If we do that, then we will be successful for this generation and generations to come.

I look forward to actually being able to get to that point in time. I look forward to hearing from the other side of the aisle and hearing from the Senate that the bill they are pushing right now, the Dodd- Frank-Obama bill, is being pulled and they are no longer going to force the votes, but instead they are willing to open up a true and honest dialogue to get the job done. When that time comes, I will be willing to work with them to accomplish that.

With that, Mr. Speaker, I yield back the balance of my time.

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

Mr. President, I rise today to urge my colleagues to support bringing forward Chairman Dodd's regulatory reform bill. The chairman has just spoken with great passion about how we got here. I want to take perhaps somewhat of a similar tack and describe, as a new Member, why I think this legislation is so terribly important.

I have had the opportunity today and on other Mondays, as is often noted, to sit in the chair and listen to my colleagues come in and talk about this issue. I heard today my colleagues talk about health care, talk about stimulus, talk about unemployment, as somehow reasons why we should not start a debate about financial regulatory reform. I am not sure I understand the connection.

Candidly, the American people could do with a little less political theater and a little more action. Regardless of what happens this afternoon at the vote at 5 o'clock, I hope--and I honestly believe most of my colleagues on both sides of the aisle hope--that we will get to that agreement in a bipartisan new set of rules of the road for the financial sector that will stand the test of time for not a year or two but for decades to come.

Before I get into a substantive discussion about how we got here and how I believe the Dodd bill takes dramatic steps forward, there is one other issue I need to address. I have sat in the chair as the Presiding Officer and have heard--and I know as Presiding Officer we have to bite our tongues sometimes--colleagues come forward and somehow portray this piece of legislation as a partisan product.

I have only been here for 15 months but in the 15 months I have had the honor of serving this body, I have not seen any piece of legislation that anywhere approaches the type of bipartisan input, discussion, and ongoing dialog that Chairman Dodd's bill has. Literally, in the 15 months I have had the honor of serving on the Banking Committee, we held dozens if not hundreds of hearings on the objectives of this legislation, objectives, again, that I think colleagues on both sides of the aisle agree upon: making sure there is never again taxpayer bailouts for mistakes made by too large financial institutions, making sure we have more transparency and, as the chairman said, a return of a sense of fairness to our whole financial product system and, third, that ultimately the American people, the consumers of this Nation, will make sure there is somebody watching out for the financial products that sometimes they have been purchasing without appropriate knowledge or appropriate recourse, when these products explode in their faces.

Again, unlike the Presiding Officer who served around this body for many years, I am a new Member. But I saw where the chairman did something I thought was somewhat unusual with a major piece of legislation. Rather than saying he had all the knowledge and all the input, he actually invited in the members of the committee, junior members, senior members of both parties to set up working groups to take on some of the challenging aspects of this bill--consumer protection, systemic risk, corporate governance, the whole question of derivatives. Let me state absolutely, because I can state from the systemic risk/too big to fail portions, the products we developed that are critical parts of this legislation are bipartisan in nature, bipartisan in ideas, and find that common ground that has been so absent from so many of the previous debates we have had over the last 15 months--I think particularly about the fact of the systemic risk, too big to fail, and resolution authorities Senator Corker and I worked on. There has been no better partner I could have had than Senator Bob Corker, grinding through hundreds of hours, recognizing there was no Democratic or Republican response to systemic risk and too big to fail, but we had to get it right. While there may be parts of this bill that can still be tightened and need to be tweaked here and there, and the Senator and I may add a few improvements, on the overarching goal of making sure the taxpayers never again would be on the hook, I believe we have taken giant steps forward.

As you heard from the chairman already, those conversations are ongoing even today. Please, while we kind of get sometimes subject in this body to hyperbole, anyone who makes the claim that this legislation is partisan only doesn't recognize the facts or has not seen the experience of the members of the Banking Committee over the last 15 months.

Let me also acknowledge--and I recognize I have a number of things I want to say and maybe other Members want to come, but let me acknowledge something else about this discussion. Sixteen months ago, when I came to this body, I actually thought I knew something about the financial services sector. I spent 20 years prior to being Governor around financial services, taking companies public. I had some ideas about how we would sort through these issues. I have to tell you what I quickly found was that oftentimes my original idea, or oftentimes the simplistic sound bite solution that I thought might be the solution, more often than not proved not to be the case and that trying to sort our way through this labyrinth of financial rules and regulations in a way that brings appropriate regulation but maintains America's preeminent role as the capital markets' capital of the world has been challenging.

Again I thank my colleague Senator Corker. I think we both realize there is no Democratic or Republican way to get this right but we had to get it right. Over the last year we have set up literally dozens of seminars where we invited members of the Banking Committee to come in and kind of get up to speed as well. Fifteen months later, with this legislation now before the floor, I think we have taken giant steps forward in getting it right.

I also want to revisit for a moment, before we get to the substance of the bill, how we got here. I have actually been stunned sometimes, sitting in the Presiding Officer's chair, hearing colleagues come in and try to cite as the causation of the crisis that arose in 2007 and 2008 a single legislative action back in the 1970s or a single individual's activities over the last two decades. The claims are so patently absurd, sometimes they do not even bear recognition or bear rebuttal. But it is important to take a moment to look back on the fact that none of us comes with clean hands to this process of how we got to such a mess in 2008 that we were on the verge of financial meltdown.

Think about the fact back in the early 1990s, back in 1993, Congress actually passed legislation to give the Federal Reserve the responsibility to regulate mortgages--responsibility that we have seen time and again they didn't take up the challenge to meet.

The Presiding Officer spoke very eloquently earlier this afternoon about the actions of Congress in 1999, the Gramm-Leach-Bliley bill, that basically broke down the walls between traditional depository bank and investment banking that had been set up by the Glass-Steagall Act in the early 1930s. Where the Presiding Officer and I may differ now is I am not sure we can unscramble those eggs, but clearly we needed a little more thought back in 1999, as we internationalized our financial markets and turned these large institutions into financial supermarkets, which was one of the precipitating factors in this crisis as well.

Candidly, bank regulators were not given the tools to regulate, and oftentimes regulators of both depository institutions, their bank holding companies, and their securities firms, had no collaboration or coordination.

During our hearings in the Banking Committee when we looked into one of the most egregious excesses in the last few years, the Bernie Madoff scandals, we heard regulators had started down the path to try to find out the source of some of the criminality that took place in the Madoff case, only to find because of our mismatch of regulatory structure they got to a door they couldn't open because that was the purview of another regulator.

Regulators, under our existing rules, were actually prohibited from looking at derivatives. Derivatives, as the Chairman mentioned, in the last decade have gone from what seems like a large number--$90-plus billion--to literally hundreds of trillions of dollars in value.

Responsibility continues, again, in some of our monetary policy. In the early part of the 2000s--and again, not many people sounded the alarm at that point. We overrelied on low interest rates and monetary policy to pull us out of the 2001 recession. But as we came out of that 2001 recession, we left those monetary policies in place, which led to a housing bubble for which we are still paying the price.

I know some of my colleagues on the other side said this bill does not take on the GSEs, Fannie Mae and Freddie Mac. And, yes, to a degree, they are right. And then, in a subsequent action, we will have to make sure we have a new model in place for these institutions. But that should not be used as an excuse to not put in place major financial regulatory reform.

Candidly, if we are going to be really truthful with each other and the American people, we have to acknowledge that everyone--not just the banks but everyone--got overleveraged. Quite honestly, we all, the American people, probably need to take a look in the mirror as well. I think, as we bought those adjustable rate mortgages; took out that second and third loan on our home; ended up getting that deal that seemed too good to be true; moved away from the conventional idea that you ought to go ahead and, before you get a mortgage, be able to put 20 percent down and be able to show you can pay it back, we all got swept up in this ``who cares about tomorrow; let's just borrow for today.''

We also saw innovations, and American capitalism has worked pretty well, particularly in the last 100 years. But we particularly saw innovations in the last 5 or 6 years alone, innovations that originated on Wall Street that were supposed to be about better pricing risks: derivatives and all of their cousins, nephews, and bastard offspring. But these tools that were supposed to be a better price risk we have now found were more about fee generation for the banks that created them and, instead of lowering overall risk, created this intertangled web that, once you started to put the string on, potentially brought about the whole collapse of our markets.

Time and again, we saw, rather than transparency in the market, opaqueness and regulators who never looked beyond their silos.

I think most all of our colleagues want reform. Colleagues on both sides of the aisle want to get it right. But I believe there are two real dangers as we go down this reform path. One is to resort to sound- bite solutions that at first blush sound like an easy way to solve the problem but in actuality may not get to the solution we need.

I know we are going to have a fervent debate on this floor--and I look forward to it--about the question of whether the challenge with some of our institutions was their market cap or was it really putting pressure on the regulators to look at their level of interconnectedness and the level of risk-taking that was taking place. I look forward to that. There are valid points on both sides. When we get to that debate, I will point out the fact that in Canada, where there is actually a higher concentration of the banking industry than in the United States, because there was greater regulatory oversight and actual restrictions on leverage, those Canadian banks didn't fall prey to the same kind of excess we found here in the United States.

I know the chairman and Chairman Lincoln are working through the question of derivatives, where they should be housed, because they do provide important tools when used properly. And there will be a spirited debate on whether we should break off derivatives functions from financial institutions. I look forward to that discussion. By simply breaking off these products into a more unregulated sector of the industry, we could, in effect, if we do not do it right, create an even greater harm down the road than we have right now.

So the first challenge is to make sure we don't fall prey to the simple solutions and recognize the complexities of these issues.

The other challenge we have to be aware of is the converse. I know the chairman has heard, I know the Presiding Officer has heard--any of us who have tried to get into this issue have had folks from the financial industry come in and talk to us about the unforeseen consequences of any of our actions. Some of those arguments are valid, but oftentimes those arguments are simply--they always start the same: We favor financial reform, but don't touch our portion of the financial sector because if you do this, the unintended consequences would be enormous.

Because the knowledge level and the complexity of these discussions are so challenging, what we also have to fight against in this body is the more easy process to default to the status quo because timidity in this case will not solve this crisis and will not provide the new 21st- century financial rules of the road we need.

We can't be afraid to shine the light on markets or, for that matter, to raise the cost of certain activities, because the unforeseen consequences of the interconnection of these activities, as we saw in 2007 and 2008, pose grave risk to our financial system--and as we have seen with the 8 million jobs lost and literally trillions of dollars of value lost from the American public.

So what does S. 3217 do to accomplish this? I spent most of my time on the two titles that Senator Corker and I worked on and the chairman and his staff adopted and changed a bit but that still provide the framework and, I believe, the right structure.

First--the chairman has already mentioned this--we create for the first time ever an early warning system on systemic risk. If there is one thing that has become clear from all of the hearings that have been held, not just at the Banking Committee but under Senator Levin's Investigations Committee and Chairman Lincoln's Agriculture Committee, it is that there was very little combination and sharing of information between the regulatory silos.

The chairman's bill creates a nine-member Financial Oversight Council chaired by the Treasury Secretary and made up of the Federal financial regulators. This group will bear the responsibility, both good and bad, if they mess up, of spotting systemic risk and putting speed bumps in place because we can never prevent another future crisis, but to do all we can to slow and minimize the chance of those crises. The most important part of this systemic risk council is it will actually share information, so no longer will we have one regulator who is looking at the holding company, another regulator looking at the depository institution, a third looking at the securities concerns and not sharing that data.

We will place increased cost on the size and complexity of firms. The largest, most interconnected firms will be required--not optional but required--to have higher capital, lower leverage, better liquidity, better risk management. Those have all been traditional tools that have already been in our regulatory system, but this systemic risk

council will require those large institutions to meet all of these higher costs--in effect, their cost of being so large and interconnected.

But what we are also bringing to the table are three brandnew tools that I think, if executed and implemented correctly, will provide tremendous value in preventing that next financial crisis. Those three tools are contingent debt, our so-called funeral plans, and third, the Office of Financial Research. Since these are new tools, let me spend a moment on each.

One of the things we saw in the 2007, 2008 crisis was that as these firms got to their day of reckoning, it became virtually impossible for them to raise additional capital and shore up their equity. Once they start going down the tubes, the ability to attract new investors, particularly from a management team that sometimes doesn't recognize how far and how close they are coming to the brink, is a great challenge.

So working with folks from the Fed and experts across the country, this bill includes a whole new category within the capital structure of those large institutions: contingent debt. There will be funds within the capital structure that will convert into equity at the earliest signs of a crisis. Why is this important? This is important because if this debt converts into equity, the effect it has on the existing shareholders is it dilutes them. It takes money right out of their pockets. So existing shareholders will have a real incentive to hold management accountable, not to take undue risks, because long before bankruptcy or resolution we will be able to have this trigger in place that will convert this debt into equity, diluting existing shareholders and, candidly, diluting management as well. How effectively we use this tool has yet to be seen, but it will provide another early warning check on these large institutions.

The second new addition to the chairman's bill is basically funeral plans for these large institutions. What do I mean? I mean a management team will have to come before their regulators and explain how they can unwind themselves in an orderly way through the bankruptcy process.

We heard stories--I will not mention the institution--we heard stories in the height of the crisis in 2008 about how certain very large international institutions in effect came before the regulators and said: You have to bail us out because we cannot go through bankruptcy; it is just too hard. Never again should any institution be allowed to be in that position. And if we use this tool correctly--this is an area where I know the Presiding Officer has great interest--if the regulator does not sign off on the funeral plan for this institution, on how it can unwind itself, even with many of its international divisions, through an orderly bankruptcy process, then the regulator can, in effect, make this institution sell off or dispose of parts that can't be done through a regular order of bankruptcy. By doing this, we create the expectation in the marketplace that bankruptcy will always be the preferred option.

Never again will there be an excuse that, we are too big and too complicated to go through that orderly process. Creditors and the market will know there is a plan in place that has to have been approved by the regulator and constantly updated so we have a way out.

The third area--again, I was very pleased to hear the chairman mention this because within the press and the commentary, it has gotten no information or no focus at all--is the creation of a new Office of Financial Research within the Treasury.

One of the things we heard time and again from regulators as we kind of went back and looked at how we got in the crisis of 2007 and 2008 was that the regulators didn't realize the state of interconnectedness of some of the institutions they were supposed to be regulating. No one had a current, real-time market snapshot of all of the transactions that were taking place on a daily basis, so nobody knew what would happen if you pulled the string on AIG, even though it was their London-based office, what would happen if those contracts suddenly all became suspect.

By creating this Office of Financial Research, we will give the regulators and the systemic risk council, on a daily basis, the current state of play across all the markets of the world.

This tool, if used correctly, would be another terribly important early warning system. But as the chairman has mentioned, with all this good work, we still can't predict there will never be another financial crisis. Chances are Wall Street and others, creativity being what they are, will find some way, even with all this additional regulatory structure and oversight. We can never predict there might not be another crisis. So what do we do?

First and foremost, what this bill puts in place is a strong presumption for bankruptcy so that creditors and the market alike will know what happens if they get themselves in trouble. Particularly for these largest institutions that are systemically important, they will have to have their preapproved, in effect, bankruptcy funeral plan on the shelf so that we can pull that off in the event of a crisis and allow the institution to go through an orderly bankruptcy process. Again, bankruptcy will be the preferred option of any reasonable management team because through bankruptcy there is at least some chance they may emerge on the other side in some form or another. They may be able to keep their job, if they are part of management. Some shareholders may still have some equity remaining.

What happens if we have a firm that doesn't see the inevitable and isn't willing to move to bankruptcy? What happens if we have a circumstance where the failure of an institution could cause systemic risk and bring down the whole system?

With an appropriate check and balance--and again, I commend Senator Corker for his additions--in effect, simultaneous action of three keys: the Treasury Secretary, the head of the Fed, the FDIC, and additional oversight--all of these actions taking place, there then is an ability to say, how do we resolve an institution, in effect put it out of business--unlike in 2008 where the government invested, in effect, in a conservatorship approach that said: We will prop you up to keep you alive because we don't know what to do with you to keep you alive because you are so large and systemically important.

We have created in this bill a resolution process that says: If you as a management team are crazy enough not to go into bankruptcy, but actually allow resolution to take place, you are going out of business. Senator Corker said: You are toast. Your management team is toast. Your equity is toast. Your unsecured creditors are toast. You are going away.

Again, we are going to put this institution out of business in a way that does not harm the overall financial system. We have to have an orderly process.

We saw during the crisis of 2008 what happens when one of these institutions fails without any game plan. We saw the value of these institutions disappear overnight as confidence in the market, confidence within the market in the institution was lost. So working with my colleagues and experts from the FDIC and others, we said: What you have to do is, you have to have some dollars available to keep the lights on so that you can sell off the portions of the institution that are systemically important and unwind this in an orderly way that doesn't have an effect, the equivalent of a run on the bank or a run on the financial system.

Again, we have heard critiques of the approach Senator Corker and I came up with in this resolution fund, this ``how do you put yourself out of business in an orderly way'' fund. We actually thought it ought to be paid for by the financial industry, with the ability then to have that fund, in effect, replenished after the crisis is over.

I saw polling today that shows the overwhelming majority of Americans actually think the financial sector ought to bear the cost of unwinding one of these large, systemically important firms. Let me say, if there are other ways to do it--as a matter of fact, some in the administration have suggested other ways--I am sure we can find common ground as long as we do have at least two principles: First and foremost, the taxpayer must be protected, and industry, not the taxpayer, has to take the financial exposure. Second, funding has to be available quickly to allow resolution to work in a way to orderly unwind the process. But it ought to be done in a

way--again, this is where some of the judgment comes in--where there is not so much capital available that we create a moral hazard, but a bailout fund is created.

Personally, I believe the House legislation goes too far in creating a fund of that size. I think the chairman's mark strikes a much more appropriate balance. But if there are ways to do this that protect the taxpayer, allow speedy resolution with funds that will be available so we don't have a run on the market, a run on the institution that creates more systemic risk, as long as the industry at the end of day is going to pay for it, I am sure there are other ways and we can find that common ground.

What we did in this process of resolution is we said: Let's take what is working. Let's see what is best from the FDIC process which currently resolves banks on a regular basis. One of the things I have heard from some of my colleagues on the other side--I don't know about their community banks, but my community banks in Virginia; I would bet the community banks in Delaware and the community banks in Connecticut--we don't want to get stuck paying the bills for the large Wall Street firms that bring the system to the brink of financial catastrophe. So, again, one of the aspects of the chairman's bill is to make sure any resolution process does not burden, charge, or in any way otherwise interfere with community banks.

What we think we have struck is a process that puts costs on those institutions that make the business decision to get large and systemically important. We think we have put in place abilities for the regulators, with the funeral plans, to make sure if this interconnectedness is so large that they can't go through bankruptcy, then we can stop them from taking on these new activities. But because we can't always predict eventuality, we have then said: If you need to use a resolution process, let's make sure it is orderly, paid for by industry, and that you have stood it up in a way that no rational management team would ever expect or want to choose resolution.

I know my colleague from New Hampshire has been a great partner in this legislation and is on the Senate floor. I will end with just a couple more moments. There are other parts of this bill that have not received a lot of attention. In this bill, the chairman has included an office of national insurance.

One of the things we saw in the crisis in the fall of 2008 was that nobody knew how entangled AIG's activities were with the whole financial system. This doesn't get to the question of who should regulate insurance companies, but it does create at the Federal level at least the knowledge within the insurance sector of its interconnectedness. The chairman has mentioned that he and Chairman Lincoln are working to grapple through one of the toughest parts of the bill--again, an area I know my colleague, Senator Gregg, has been working on: How we get it right around derivatives.

Again, there is no policy difference. Both sides agree derivatives are an important tool when used appropriately. Particularly industrial companies need to use the derivative to hedge against future risk within their business. The challenge is, how do we not draw that end user exemption so large that every institution on Wall Street suddenly transforms itself into an industrial end user. Secondly, while these contracts are unique, they have to have more light shown on them in terms of clearing and exchanges.

I know Chairman Dodd and Chairman Lincoln and Senator Reid and Senator Gregg will be working through this. One suggestion I would have--because as someone who has seen Wall Street act time and again, I wish them all the luck--part of my concern is that whatever rule we come up with, there is so much financial incentive on the other side that a year or two from now, we may be back because they found a way around it that we again need to give the regulators certain trip wires. I, for one, believe we ought to take the industry at its word. The industry says end users are only going to be 10 percent of total derivative contracts. Then let's put that in as a regulatory goal. If they end up exceeding that, then we can bring draconian consequences to bear. Or if they say, yes, we can make most of these transactions and most of these contracts transparent through clearing or exchange, great; let's accept them at their word.

But if they don't get to those totals, then perhaps some of the actions that particularly Members on my side of the aisle would like to take can be put in place. But, again, folks of goodwill can find common agreement.

Finally, the area around consumer protection, where the chairman and the ranking member have worked at great length to kind of sort this through, everybody agrees on the common goal. There needs to be enhanced consumer protection, particularly for the whole nonregulated portion of the financial industry that now exceeds the regulatory half. Too often it was the community bank that was chasing the mortgage broker on some of the bad financial products because there was no regulation on the mortgage broker to start with. So, again, there will be differences, but I think the approach of the chairman, which is to keep this with the appropriate rulemaking ability but to make sure, particularly for those smaller banks, that we don't end with conflicting information of a consumer regulator showing up on Monday and a safety and soundness regulator showing up on Wednesday, to do that in a combined fashion so there is commonality of message, particularly to smaller banks, that strikes that right balance.

Again, I can only say for the banks in my State of Virginia, those smaller banks who oftentimes have said they didn't cause the crisis-- and they didn't--they are the first to say: We need enhanced consumer protection to make sure that our financial products are regulated by the type of product, not by the charter of the institution that issues the product. There may be ways to improve on this section. But, again, I think Senator Dodd and Senator Shelby are working to get it right.

We have seen, as well, major action on the rating agencies, questions around underwriting. There are tremendous parts of this bill that haven't been the subject of great criticism because they are that common ground that, I think Senator Shelby has said in earlier quotes, 80 or 90 percent of both sides agree on. Where we don't agree, we ought to debate and offer amendments.

I look forward to candidly working with a number of colleagues on the other side of the aisle on technical amendments to this bill where we think we can make it slightly better. But if we are going to get there, we have to get to the debate.

I hope we move past procedural back-and-forth that, as a new guy, I still don't fully understand. I think it is time to fully debate this bill out in the open. The chairman made mention of what has been taking place in the last few weeks in Greece. I know the Presiding Officer has helped educate me on a whole new activity that is taking place in the financial markets right now around high-speed trading and co-location that could be the forbear of the next financial crisis.

How irresponsible would we be, 18 months after, again, the analogy of the chairman, after our house was broken into, when we haven't even put new locks on the door, if we ended up with another robbery, whether it was caused by internatinoal action or whether it was caused by high- speed trading, because we don't have new rules of the road in place?

In the 15 months I have had the honor of serving in the Senate, I can't think of a piece of legislation that better represents what is good about the Senate, folks on both sides of the aisle coming forth with their ideas, trying to fashion a good piece of legislation. I can't think of an area where there is less traditional partisan, left versus right, Democrat versus Republican divides. I can't think of an applause line better, whether I am talking to a group of liberal bloggers or folks from the tea party, than the notion that we have to end taxpayer bailouts.

I urge my colleagues on both sides of the aisle, let's get through the procedural wrangling. Let's find that common ground that I think we are 90 percent of the way there. Let's pass a bill that gets 60, 70, 80 Members of the Senate and set financial rules of the road

that will last not just for the next congressional session but for decades to come.

I yield the floor.

Madam President, let me thank my colleague from Colorado, a member of the Banking Committee, who has been part of trying to get this bill right over the last 14, 15 months. He has spent a career in the private sector, as I did. I think we both can read a balance sheet. We both understand it is the capital markets that drive the American economy. I think we both agree we want to keep America the capital of capital formation for the whole world. We don't want this to migrate to London or Shanghai or elsewhere around the world.

We also know 18 months after we came to the precipice of a financial meltdown ought to be enough time to put rules of the road into place so we can give the market what it craves most, which is predictability.

I will not go on at length. I had the opportunity earlier when the chairman was here, and I think, unfortunately, I probably spoke for about 40 minutes going through how we got to this point and all the things in this bill to put these new rules of the road in place. I will only make two or three quick points.

One, in my 15 months here, as a new guy, I have never seen a bill that has had more bipartisan input than this piece of legislation. I had a great colleague in Senator Corker from Tennessee. We worked on the too-big-to-fail and the resolution piece. There are places that can still be improved. I would love to work with Senator Corker on some technical amendments to make this better. But this was a bipartisan piece of legislation.

Two, I actually think there is a great deal of agreement on both sides of the aisle about our policy goals. I am not talking about the role of government or who should get covered or not covered, the way it was with health care. We all agree, no more taxpayer bailouts, more transparency, that there ought to be some sense of fairness in the financial system, and that consumers ought to know the financial products they are using and buying, or

mortgages they are making have some basic underlying protections. I have yet to hear any of my colleagues on the other side disagree with those basic premises. I think we are still working toward what I hope will be, as opposed to some of the disappointments that have come out of this Chamber, something we can all be proud of and something the American people can be proud of in that we found some common ground.

I have to acknowledge, I am not a very good political prognosticator. I assumed last week there was an 80-percent chance we would get a bipartisan bill. I still believe that. I am not sure anybody who is listening tonight understands procedurally why our colleagues who share the same goals, those of us who have been working in bipartisan teams, who have amendments that will help strengthen the bill, shouldn't be spending tonight talking about those amendments, offering those amendments, offering those improvements, having those who disagree debating, when there was a bipartisan product to date and will be a bipartisan end solution, I believe. The American people demand, 18 months after the fact, that we put these new financial rules of the road in place.

Unlike many of my colleagues, I get to go home to Virginia tonight. If I run into a Virginian who wants an explanation of why we are not on the bill, I would not know what to tell them. My friend from Colorado spent the weekend crisscrossing Colorado. He is asking folks to rehire him. I share he is head scratching on why we aren't here talking about something on which there is not major policy differences. There is common agreement that we need to have reform, and a lot of the reform parts there is agreement on. Where there is not agreement, there is actually more bipartisan consensus on the form of the amendments.

I would love to hear from the Senator from Colorado.

Again, one final comment. I know the Presiding Officer is a new Member as well. This is one of those moments when there has been a year and a half of bipartisan work that has gone on, when there seems to be a commonality of interest in what the goals of financial reform are. I don't know about the Presiding Officer, I don't know about my friend from Colorado, but I never got the memo that said our job wasn't actually to get stuff done. There were legitimate, major policy differences in the health care discussion. But in this discussion, there are things that need to be worked out, but the goals we have all agreed on. The bipartisan working groups have been at it for more than a year.

I implore my colleagues from the other side of the aisle, I don't know if maybe there was some procedural shenanigans, that kind of back and forth. But I hope my colleagues from the other side of the aisle--I see my colleague actually who has great expertise in the financial sector, the new Senator from North Carolina coming in--some of the newer folks, whatever the reason our colleagues on the other side didn't want to get to a real discussion of the bill, I hope they can come back later tonight, first thing tomorrow, and we can move to this bill, talk about it, put forward those amendments. I know I will have some bipartisan amendments to make the bill stronger.

I know my colleagues will. At the end of the day, let us get the people's business done. As my friend has said, the Dow may be back north of 11,000, but that doesn't mean much if you don't have a job. One of the ways we can guarantee the financial markets will continue to have the capital to make the loans, to make the investments, to create that next wave of jobs is to make sure we have in place financial rules of the road.

I thank the Chair and yield the floor.

Mr. President, as I understand it, there is a vote scheduled at 5 p.m., is that correct?

And the time between now and 5 p.m. will be for general debate on the matter of the motion to proceed, is that correct?

Mr. President, I see my friend and colleague from Delaware, Senator Kaufman. How much time does the Senator need?

I yield 16 minutes to the Senator from Delaware.

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 suspect sometime over the next hour and a half, Members will come to the floor--including the Presiding Officer-- and I will be glad to take a few minutes and share some opening comments and then give him relief so he can be heard on this matter.

I thank Senator Warner and my colleagues on the Banking Committee, both Democrats and Republicans. We have spent a lot of time together over the last 2 years now--longer, in fact, going back even before the arrival of my friend from Virginia.

When I became chairman of the Banking Committee in January of 2007, I was asked to pick up this issue. We began to look at the issue of the mortgage crisis in the country through all of 2007 and, of course, the following year when events began to unfold, culminating with the disaster we encountered in the fall of 2008.

The members of the committee have worked very hard. We have had literally hundreds of hearings and meetings, listening to people across the spectrum of how best to address these issues, filling in the gaps that led to the near collapse of our economy; what steps we ought to be taking to provide intelligent, thoughtful, commonsense regulation, as well as to see to it, in the process of doing so, we do not stifle the ability of this country to lead in the financial sector globally; as well as provide for the innovation and creativity necessary for our country to grow and prosper economically, the wealth creation that is necessary for our country. It has been a long and arduous journey.

I was speaking with Bob Corker of Tennessee, with whom I spent a great deal of time, as I know the Presiding Officer has as well. I thank Senator Shelby, my colleague and former chairman of the Banking Committee, who is the ranking member on our committee. We have spent a lot of time on these issues, including some time earlier this afternoon, and we will be meeting again depending on the outcome this evening one way or the other. We will continue our conversations to try to resolve some of these outstanding matters in a very long and complex piece of legislation.

I will not enumerate every member of the Banking Committee, but suffice it to say, to this juncture, the work they have done has been tremendously helpful and has produced a good and strong bill on financial reform.

Today the Senate faces its first vote on the issue, which will occur in a little less than 2 hours from now, deciding whether we can even go forward and debate the matter. My hope is our colleagues will allow us to debate this issue.

I understand there are differences. There is hardly unanimity in caucuses, let alone in the Chamber, on the way

to go, particularly in areas involving systemic risk, dealing with the so-called too big to fail provisions, dealing with the provisions of how we administer the notion of exotic instruments, the derivative community, and the like. Significant discussions have gone on. The assumption we are going to resolve all of those issues prior to debating the issues is somewhat unrealistic if we are trying to reach accommodation on all the various matters that are included in the 1,400 pages of the proposal which we will have before this body.

Today my plea is not so much on the substance of what is here, although I am willing to discuss all of that because it is important our colleagues know what we have tried to achieve and accommodate in our legislation, but a plea to let us get to the debate.

I do not think the American people understand this. Regardless of where you come out on the issues, whether you stand on the various provisions of the bill, I do not know how to explain to people to make them realize how vulnerable we are today in the waning days of April 2010 as we were in the fall of 2008 when we saw what happened to our economy. Nothing has changed except, of course, jobs have been lost, homes have gone into foreclosure, retirement incomes have evaporated, and housing values have declined. Almost $11 trillion in household wealth has been lost. That is what has happened over the last 18 months.

We have yet to stand and address what caused that to happen in our country, to fill in those gaps to provide the regulation, put the cops on the beat, create provisions that would minimize the next economic crisis. And it will occur. There is nothing I have drafted that can protect our country from future economic difficulty.

As certain as I am standing here today, we will face yet another crisis or crises in the future. The question is, Are we going to be better positioned to minimize that crisis so we do not see the collateral damage that has been caused to businesses, individuals, retirement, homes--all of the things that we have suffered because we did not have in place the kind of safeguards that might have put a tourniquet on this problem in its earliest stages, not to have eliminated the crisis but certainly eliminated the damage it caused because we did not have the cops on the beat, we did not have the regulation, and we did not have what is exactly included in this bill to minimize the danger in the future.

I have tried to explain this issue. Obviously, it is complicated when you start talking in these words that are archaic; talking about credit default swaps and derivatives and systemic risk and all the other terminology that is used to talk about financial services. But let me try to phrase this in more graphic terms, if I can.

Imagine coming home from a weekend away. You have been away. You have taken your family out on a trip and you come home to find the front door swinging wide open, flapping back and forth. When you walk in the house, you realize you have been robbed. Your TV is gone, your furniture, your jewelry, important documents, cash, and family photos, all have been stolen out of your home. Maybe worst of all, there is broken glass and shattered pottery. Not only did they steal, but they decided to wreck the house as well. So you are angry and frightened, wondering what is coming next and how much it will cost you to replace your TV and your stereo. Then you find out, at the end of all this, that they have identified the robbers who have broken into your home and stolen everything and, by the way, you have to write a check to them. The very people who caused the damage are now going to get a check written out to them--those who caused the problem in the first place.

Well, that is what happened, in effect, 18 months ago. People came in and robbed our homes, in effect. In fact, they took the home, they took the income, and they took the retirement. They watched jobs go out the window. The very people who were responsible for it, of course, were stabilized because we wrote a check for $700 billion to stabilize those institutions. As we did so, and, of course, we got them back on their feet, the very leaders of these industries began to reap massive bonuses to put themselves on solid footing. So they have benefited from this financially. Yet 8\1/2\ million jobs were lost, 7 million homes ended up in foreclosure, there was a 30-percent decline in home values and a 20-percent decline in retirement of working families, all who thought they were protected. All that is gone, and somewhere between $11 trillion and $13 trillion--not ``b'' as in billion but a trillion dollars--in household wealth has been lost in 18 months.

If that is not wreckage of your home--your economic home--I don't know what is. Today, we are as vulnerable as we were 18 months ago. Our house is still unlocked, in a way. What happened 18 months ago could happen again. The difference this time is I don't think there is an ounce of willingness on the part of the American people to write that check again. What they are asking is for us to step up, to think carefully--as we have tried to do over the last year or so as we have gone through this process--and craft some ideas that would minimize that from happening again so there is not a huge part of our economy that is totally unregulated, as we had with real estate brokers who on their Web site had as their first rule to brokers, convince the borrower you are their financial adviser, when they were anything but their financial adviser. So they were luring people into mortgages they couldn't afford and convincing them they could pay for it, knowing full well they never ever could. Of course, the banks themselves were then bundling these mortgages, only holding them for 8 or 10 weeks and then selling them off, branding them AAA to unsuspecting investors, and that created that bubble that ultimately was the major cause of the collapse.

Today, that same problem can exist in the absence of the law we are putting before our colleagues. Maybe I should have said this at the outset, but we hardly claim perfection in what we have written here. Hardly. But we believe they are sound ideas that deal with these very issues that caused the problem in the first place, and what we need to do is to be able to debate those ideas. If my colleagues disagree, as many do--some think I have gone too far, some think I haven't gone far enough, and those are maybe two legitimate points--how are we to resolve our disagreement if we can't bring up the bill and have the debate this Chamber was designed to engage in? What is the point of having 100 seats, coming from 50 States, when a major issue affecting our country cannot even be the subject of a debate?

So I urge my colleagues--I urge them--to let us get to this debate. Let us do our best to resolve these matters as adults, as people who have strong views and feelings, many of which we agree on, by the way. I mentioned my colleague from Virginia, the Presiding Officer. I don't know how long Mark Warner and Bob Corker spent--hundreds and hundreds and hundreds of hours--to make sure that in this proposal never again would a financial institution in the United States of America reach such a status that it would be guaranteed implicitly that the Federal Government would bail them out when they engaged in excessive risk and put themselves in great jeopardy. Our bill does that. Without any question whatsoever, those entities, if they reach that point, will fail. They will go into bankruptcy, they will go into receivership, and management gets fired. They don't get a bonus, they get fired. Shareholders lose their resources or their investments, as well as do creditors, not to mention other problems associated with it. But the idea is, those entities go out of business, and we wind them down in a way that doesn't jeopardize other sectors of our economy.

Nothing could be more clear in our bill than that. If there was one issue I think we all agreed on, it was to make sure that didn't happen. Again, the Senators from Tennessee and Virginia, and there were others, by the way, who were engaged in that debate in writing this bill to achieve that desired result by the American people.

We also said: Look, one of the problems that happened over the years leading to this crisis is that we didn't even know what was going on out there. We heard Bob Rubin, the former Secretary of the Treasury, and we heard Alan Greenspan and others--whether you believe them--who said we

didn't understand how this was happening or why it was happening or even that it was happening.

Well, that excuse ought to never occur again. So we create in our bill that early radar system--again, maybe a more graphic description of what the Systemic Risk Council does. This is made up of various Federal agencies, so that there is not just one but a multiple set of eyes with differing backgrounds and experience to deal with the economic issues of our Nation; to be constantly watching and monitoring what is occurring out there and not just in our own country, by the way, but around the world. How many of us have read headlines over the past few weeks about Greece and what problems it may pose to Europe and other parts of our global economy or what happened in the Shanghai stock market a number of years ago, where a decline in value in that exchange put the entire world in a tailspin for several days. So the notion that it is just what happens here at home on mortgages or other issues is not limited, it is also what happens around the world today that can affect us.

Anyway, this part of the bill is designed to be that early warning system--that radar system. Again, I wish to thank my colleague from Virginia and my colleague from Tennessee. One of the provisions in that early warning system is data collection on a daily basis, so we know what is happening economically literally on an hour-to-hour basis. That will be a great value as we sit there and try to make these assessments and pick up on these problems in the earliest stages before they can occur.

Consumer protection. This ought not be a radical idea--to protect consumers from any problems financially. How many of us, of course, read the tragic news over the last few weeks about an automobile manufacturer that had a defective accelerator? What was the first thing you heard? Those cars are being recalled so you would not be at risk in driving them. We hear of recalls all the time on products we buy. You buy that nice TV and it doesn't work, you can send it back, you can recall that product, and you will be protected as a consumer.

What happens when you get a financial product that doesn't work or is defective or certainly producing results that were never intended but are causing major problems? Where do you go to get a recall on a faulty mortgage or a credit card deal that is corrupt or fraudulent or deceptive or abusive? Why shouldn't we deal with financial products that can bring someone to financial ruin? We can do it with a toaster, a TV or an automobile. Well, our bill sets up a Consumer Financial Product Safety Commission or bureau or division that we have established in this bill. So consumers themselves can have someplace to go to get redress.

Rules can be written to protect them against abusive practices. I appreciate my colleague from Delaware mentioning my credit card bill, but we shouldn't have to write a bill every time there is a deceptive or fraudulent practice that does damage to consumers. Why does it take writing a bill every time there is a problem? Why not have regulations in place that would protect consumers?

Let me mention what else that does. It isn't just protecting the consumer from a faulty financial product. One of the most important elements in our economy is consumer confidence--having a sense of optimism and confidence or faith that our institutions will be there to work for them and not against them. One of the great damages to our country--and I don't know how you put a number on it. I can't cite the number on home values lost or wealth lost or mortgages or foreclosures or jobs lost. Tell me what price we put on the loss of the American public's confidence in our financial system. What is that number; that people no longer trust or have deep questions about whether they are going to be protected with their hard-earned dollar with that insurance policy or that stock they want to buy? Not that they ought to be guaranteed a return on it but that there isn't going to be some deceptive, abusive practice that will put them at risk. To me, that is about as important an issue as you can have--confidence of the American people that the architecture of our financial system is one they can have faith in, that they can have confidence in. That reputation has been damaged severely over these last number of months.

I don't claim what we have written in this area of consumer protection solves every problem. But for the first time in our Nation's history, for the very first time, we will have a consolidated consumer protection agency with the principal responsibility of watching out for the consumers of financial products. I think that is a major achievement for our bill.

Lastly, let me mention the old issue of these exotic instruments that I mentioned earlier that have complicated definitions of what they do and how they work. One of the major problems is, of course, it has been an unregulated area. It has been what they call the shadow economy. To give an idea of how the issue has exploded, in 1998, the area of derivatives generated about $91 billion in activity. That is 12 years ago. Last year--I think it was 2009 but the last year we have numbers on this, the amount of activity in this area jumped from $91 billion to almost $600 trillion--$91 billion to $600 trillion in 10 years in unregulated activities, in this shadow economy. It was those activities that also contributed so much to the economic difficulties we are going through.

The Agriculture Committee, run by my good friend from Arkansas, Blanche Lincoln, and the members of her committee and our Banking Committee have worked out a sound and solid proposal on how we can protect the American consumers from these very risky instruments if they are not subjected to some basic rules of margin requirements-- capital. Let the Sun shine on them in the exchanges, where people can see the value. The market can determine that. All those things are critical. Derivatives are not a bad thing. They are needed, in fact, to have economic growth and prosperity. The problem isn't using them, it is how they are used and whether they operate in the shadows or in the bright light, where everyone knows what they are and how to value them. That is in our bill as well.

There is a lot more in this legislation, and my intention was not to go through and enumerate every section of the bill--all 12 sections of the bill. My point to my colleagues is: Let us get to this debate. Let us have a chance. If you don't like what I have done on consumer protection, on derivatives, if you don't like what we have done on too big to fail, if you don't like what we have done on other provisions in the bill, then come and bring up amendments. Let's debate them and let's have that ability to at least try to shape this legislation.

At 5 o'clock this afternoon, for the very first time since the crisis hit--other than the credit card bill and a housing bill that we had come out of my Banking Committee--this is the first chance we will have in 18 months, since the worst economic crisis in 80 years--which we are still suffering from. I know the markets are doing better, I know corporations are doing better, I know the stock market is making more money, but for most of us in this Chamber, we know it hasn't quite reached down yet--the economic recovery--to average citizens who have lost their jobs, who have lost their retirement, who have lost the wealth they built up over the years. All that is gone. For a lot of them it is not going to come back. So what we need to do is step up and try to provide some answers the American public is looking for. A lot of the rage and fury and anger we are seeing around other issues happened in no small measure because of what happened to our economy and because of the failure to have regulatory procedures in place, to have cops on the beat to enforce those regulations, to be able to have the early warning system to identify problems before they spun out of control.

Our bill, we believe, steps up and addresses those issues. Again, give us the opportunity to at the very least debate them. We cannot get to the resolution of these matters if the matter is not on floor. Senator Shelby and I have been talking. We talked over the weekend. We talked already this afternoon. We will meet again. Even if we get this done and move to the bill, we have to sit down and work out how to manage all of this, so I thank him again for his willingness to do that. I deeply believe Senator Richard Shelby of Alabama

wants to get to a bill, as I believe do most of my colleagues here, but we cannot ever get there if we do not have that debate.

I did not mean to speak this long but I wanted at least to let my colleagues know how important I believe this issue is. Frankly, I don't think it serves our interests well to be screaming at each other about who cares more about this issue than the other. I think it unfortunate that a number of my Republican friends who I know care about this very much would be branded that somehow they don't care about it to such an extent that they would not even let it get to a debate. They have ideas on this legislation. They want their amendments considered and they don't want to be told you cannot even do that because we do not have some large, sweeping agreement on a bill here.

Senator Shelby and I are very close on some issues that we think we can reach an understanding. Basically we are there in a lot of these matters. I had hoped maybe we would get there before this afternoon, but there is no reason to stop all this, in my view, and not get to the adoption of the motion to proceed.

For all of those reasons, I urge my colleagues at 5 p.m. to vote to proceed to this matter and let us take the next few days to consider this legislation.

I suggest the absence of a quorum.

Mr. President, I thank my colleague from New Hampshire. We are great friends and have worked together on a number of issues over the years together. In a matter of months, both of us will be former Members of this institution. Let me express my gratitude to him for his service over the years and his commitment to these issues.

He has focused his attention on the particular matter coming out of the Agriculture Committee, of which we are all very much aware. That proposal was supported by Democrats as well as, as my colleagues know, a Republican on the committee. As my colleague from Arkansas pointed out and as I am sure we have heard already, there was at least an appearance of bipartisanship on this bill.

The Senator from New Hampshire raises some very important issues. There are a number of our colleagues who have very strong feelings, different than those of my friend and colleague from New Hampshire, as we know; otherwise, it wouldn't have come out of the committee with the vote it did, and, therefore, the subject of a debate in this Chamber. I should, of course, begin by thanking him as a member of the Banking Committee for his participation involving our product in the Banking Committee.

The issue before us in the next few minutes is whether we can have this debate on these issues. Again, as my colleague from Alabama has pointed out on several occasions, we are 80 percent or 90 percent, whatever the number he wants to talk about, there in terms of agreeing to a major part of what our bill proposes. Obviously, we are not all there. You can't ever get ``all there'' in one of these debates, before you have the opportunity to do exactly that, where Members have a chance to be heard, to raise their ideas, a different point of view, and my friend from New Hampshire feels as passionately as do others about their point of view. That is the purpose of having a debate and an institution such as this for that debate to occur.

My hope would be, again, that when this motion to proceed occurs, though some may share the views of my friend from New Hampshire or some may have an alternative view, as is certainly the case in major parts of this bill as I have written it along with my committee members--that is the purpose for which this institution exists, to have that debate. No one Member, no one committee, no handful of Members should even suggest that they have the right to write the legislation without the consideration of others. So there is a difference of opinion on these matters.

I see my colleague from Vermont.

What time is the vote to occur?

The Senator from Vermont better take the next 3 minutes.

Mr. President, let me first begin by saying if Harry Truman were here tonight, he would be very proud of his successor sitting in that chair in the back of this Chamber. I wish to thank my colleague from Missouri for her passion, her eloquence, and her common sense, something that Harry Truman was noted for. My father actually seconded the nomination of Harry Truman at the convention in Philadelphia in 1948, and I cherish the letter thanking my father for that nomination now hanging on the wall of my home--a wonderful personal letter thanking him for that seconded nomination. He didn't have many people in

1948. My father had not been elected at that time. He couldn't find elected officials to stand up for him in 1948. My father had a great relationship with President Truman and was always proud of it. He had a wonderful, direct--some would call it blunt--relationship with him. Frankly, at moments such as this, I think that is what is needed, because as the Senator from Missouri articulated, this is not a complicated moment.

Maybe there are those who don't appreciate how an institution such as this is supposed to operate. It isn't always a pretty process when we engage in debate, with 100 people in this Chamber of different political persuasions, ideologies, and interests. We try to come together as a committee system chosen years ago in order to try and be efficient about our work, so we split up into various groups to consider various matters under certain headings. We sit as Democrats and Republicans, Independents, and try and work our way through a hearing process, listening to experts, gathering informally, talking with one another, reading and educating ourselves, whether it is agriculture or defense or the environment or energy or, in this case, banking, over a period of weeks and months--particularly after a moment in time in our history that nearly brought us to the brink of financial collapse--and then through our collective judgments try and frame to the best of our ability our answers to nagging questions: Why did we get into this mess? What was missing? What did we do wrong? What can we do right? How can we make this better so we don't go through this again, so we don't strangle the system, so we won't lack the creativity and imagination that have been the hallmark of our financial sector and not lose our financial leadership in the world as a nation? How can we harmonize those rules in a global economy today so we don't end up racing to the bottom the various nations who offer the least resistance to some of the practices that brought us to the brink in our own country?

That is basically what we have engaged in for the last 38 or 39 months since I have been chairman of this committee beginning in January of 2007. We didn't agree on everything, but we tried to fashion the best we could. I introduced a proposal back in November. My colleagues said that is a good beginning, but we ought to try some different ideas, so between November and this April, I divided up the committee labors. I asked Democrats and Republicans to take on subject matters because it was a highly complex area of the law dealing with derivatives, dealing with systemic risk, dealing with corporate governance, dealing with consumer protection and other matters; thinking that if we broke it up into groups, Democrats and Republicans would become invested and knowledgeable about the subject matter so we could then frame a proposal that would enjoy the kind of bipartisan support needed to advance the cause.

Well, I wish to compliment my colleagues. Many of them worked very hard. While we didn't achieve a complete understanding in all of these matters, I think the bill reflects a lot of that labor, to such a degree that the proposal we tried to move to today is so fundamentally different than the bill I introduced in November as a result of that labor.

I thank my colleague from Missouri for identifying what occurred a few weeks ago, and that is, of course, the committee markup. Again, my colleagues on the committee made a judgment. They thought that maybe it might be better--there were an awful lot of conflicting amendments, some of which didn't make a lot of sense, quite candidly, from the other side, and I say that respectfully. It was their determination that they would decide to go further in the process without engaging in the amendment process.

So here we are. We need to get to this. I have listened very patiently this evening to some wonderful remarks. I wish to begin with Mark Warner, who spoke earlier this afternoon on the bill and has made a remarkable contribution to this body and to the Banking Committee. He spent about 20 years in the financial services area, so he speaks from a base of knowledge and personal experience. Bob Menendez of New Jersey as well was eloquent in his comments. Senator Klobuchar, and Senator Kaufman, who spoke on this before; Jeanne Shaheen of New Hampshire as well, and Senator Burris of Illinois, and the Presiding Officer, Sheldon Whitehouse, a good friend who has been invaluable in these debates. We worked together on the health care matter for weeks and months over the last year and, again, his thoughts and ideas on this bill as well I am thankful for; Mark Udall of Colorado, Senator Merkley of Oregon, Al Franken and, of course, Senator McCaskill, who I spoke about as well. It is quite a group here, these new Members, their first or second terms in the Senate. I hope my other colleagues and their staffs were listening this evening. It wasn't just eloquence, it was common sense. They are people who have gone home and listened to their constituents. While we all may not agree--and I can't suggest that every amendment they have talked about is one I would necessarily even be supportive of when the debate begins--I firmly believe every Senator has equal status in this Chamber. Whether you are a chairman or a new Member, you are a Senator, and you deserve the courtesies of this institution. You deserve the history of this institution. You deserve to be heard and respected for your ideas and to be given the time to present them, to debate them, and to have an up-or-down vote on your proposals.

That is how this institution is supposed to operate. I have been here for three decades, and in all of my three decades here, I have never gone through a period such as we have over the last couple of months where we can't even get to debate some of these critical matters.

I am still optimistic. I guess that explains why I have been here for 30 years. I still want to believe this is going to work, that all we have been through is not for naught. As does my colleague from Missouri, I have great respect for my colleagues in this Chamber, Democrats and Republicans, and I have over the years, even with people I have had basic and fundamental disagreements with. I am convinced the majority of us here--an overwhelming majority--want to be associated with passing legislation that we believe will make a significant difference in the economic life of our Nation by at least limiting or prohibiting the kind of activities that led us to the problems and economic difficulties we are in.

I hope in the coming days we will have a chance to move to this bill. I hope sooner rather than later. It may be a matter not well known by many, but we only have by my count about 45 or 50 legislative days left in this session. We are working about 3\1/2\ days a week. We are here for about another 14 or 15 weeks, when you exclude the August break, the break for Memorial Day, the Fourth of July and, of course, our departure sometime I presume in early October for the elections. That does not give us a lot of time. Last week we spent the entire week on five nominations that, as I recall--and I may be corrected--passed I believe overwhelmingly when the votes finally occurred. So 5 days on 5 people who were filibustered and delayed. That is all we did last week. That was it: five nominations that were ultimately agreed to--not controversial nominations, just ones where votes were designed to slow the process. I don't think the American people want us to leave our work in this Congress without having addressed this issue.

I will end on this particular note. If, for some reason, Lord forbid, a major financial institution were to begin to fail this evening, we are in no better shape than we were in the fall of 2008. There is an implicit guarantee that such an institution would receive the backing of the them and our economy. Despite what I perceive to be overwhelming objections to that kind of a bailout occurring, that is one issue on which there seems to be unanimity. Yet, if tonight a problem began to emerge, we would be in a similar situation as we were 18 months ago. I don't know of a single Member here who would want that to occur. That issue alone ought to cause every one of us to move to get to this debate. That is a principal part of this legislation. There are other features as well, but that alone ought to be motivation to begin this debate, listen to each other's thoughts and ideas, and to conclude that discussion and debate by passing

this legislation--or at least an amended version of this legislation.

I thank these 12 or 13 colleagues for their patience, their eloquence, their determination, and their conviction. As I get ready to leave this Chamber in the coming months, I will leave with a high degree of confidence that this Chamber will be in good hands. After listening tonight to your words, advice, counsel, and determination, it is with a sense of optimism that we will get this bill done. I am confident of that as I stand before you this evening.

With that, I yield the floor.

Mr. President, I am tempted to ask the minority leader, while he is on the floor, whether he might help us proceed to overcome the objections of Senator Vitter and achieve the promotion that was offered 6 months ago but since has been blocked for a distinguished soldier. I guess I will withhold on that and wait for another moment.

But let me indicate quickly--and I will be happy to respond to a question then--the Outfall Canals/Pump to the river, which my colleague is so significantly criticizing the Corps of Engineers for--let me read specifically:

The Corps will conduct a supplementary risk reduction

analysis as part of the detailed engineering feasibility

study, including the NEPA compliance documentation, for

options 2 and 2a, if Congress appropriates funds for the

study.

Congress has actually voted on these funds through the Appropriations Committee and said: No, we would not do that.

So my colleague knows that holding up the promotion of a soldier is not going to achieve his ends. The Appropriations Committee has already voted.

I am happy to yield to the Senator from Virginia for a question.

Mr. President, I would say to the Senator from Virginia, there are no reasons with respect to this person's military service. I have not heard any reasons from the Senator from Louisiana. He is not holding up his promotion because he thinks the man is unfit or didn't earn the promotion; he is holding up the promotion because he says he is demanding other things from the Corps of Engineers.

Despite my irritation, let me say I don't dislike my colleague from Louisiana. I intensely dislike what he is doing, and I expect most informed soldiers in this country should dislike what he is doing because I believe it puts a soldier in the position of being a pawn as between the demands of a U.S. Senator and some agency.

I will go through at some point--the Senator, I know, is leaving this afternoon, and that is why I, as a matter of courtesy, told him when I would come to the floor. But at some point later when others aren't waiting, I will go through and describe the issues, responses to the issues, because the rest of the story is much more compelling than the half story given to us by the Senator from Louisiana.

The Ouachita River levees, the authorization for that Ouachita River and tributaries projects specifies that levee work is a nonfederal responsibility. Congress has not enacted a general provisional law that would supplant this nonfederal responsibility and allow the corps to correct levee damages not associated with flood events.

As much as a person--as someone here--doesn't like that answer, that is the answer. Again, my colleague is saying--if you strip away all the bark, my colleague is saying: I demand we spend more money on something that will give us less flood control. Well, look, the Senate Appropriations Committee has been confronted with that, and the Senate Appropriations Committee said: No way, we are not going to do it.

One final point, and then I will come back at some later point and the Senator from Louisiana will respond and I will respond to him and, hopefully, someday he will decide there are other ways for him to achieve the means to an end rather than use the promotion of this dedicated soldier as a pawn in this effort he is making.

This Congress has appropriated $14 billion to help the people of New Orleans and Louisiana. How do I know that? Because I chair the appropriations subcommittee that funds these things. I chair that subcommittee. I have been willing and anxious to help the people of Louisiana and New Orleans. I have been willing to do that because I saw what they were hit with: an unbelievable tragedy. I saw it. But I think it is pretty Byzantine to come to the floor and hear the relentless criticism of the Corps of Engineers that has stood with the people of Louisiana and New Orleans, and even today is helping rebuild with that $14 billion. I think there is a time when you wear out the welcome of certainly this Senator and others who have been so quick and so anxious to help, and you wear out the welcome of agencies such as the Corps of Engineers when you suggest somehow that they are a bunch of slothful bureaucrats who can't do anything right.

I have seen people wear out their welcome, and I tell my colleagues this: This exercise in using this soldier as a pawn in this little game, trying to misread the law and the authorities of the Corps of Engineers to demand that they do what they can't do in order to satisfy one Senator, it is the wrong way to do business in this Senate.

I have not convinced my colleague to release his hold and allow, after 6 months, this soldier's career to move forward. I know this is just one. There are 100 of them on the calendar. This is one, but it is one that is unusual. It is one that is unusual because one soldier's career that has been recommended for promotion by Republicans and Democrats alike is being held up by only one person. I have not heard one other person come to this Chamber and say: I think it is a good idea to use a soldier's promotion as a pawn to try to get what I want. There is not one other person who has done that, and I don't think there is another Senator who would do it. If there is, let's hear from them.

I will come back later. I know my colleague wishes to speak. Had he wanted me to yield, I certainly would have yielded, even though he would not yield to me. There are certain things we shouldn't do around here. Again, I don't dislike him, but I certainly dislike what he is doing because I think it is so fundamentally wrong and undermines the kinds of circumstances in which we have always evaluated the merit of promotions for soldiers who have served this country.

I yield the floor.

Let me just quickly say I intend to work with everybody in this Chamber who comes here to work in good faith to solve problems. But in my judgment, it is an unbelievable mistake to use the promotion of soldiers as a pawn in these circumstances.

I would say that as chairman of the subcommittee that funds all of these projects and all of these issues, I have been pleased to send all of that money--$14 billion--down to Louisiana. But as I said, my friend is fast wearing out his welcome. I think my friend might want to learn the words ``thank you,'' thank you to this Chamber, thanks to the rest of the American people who said to some people who were hit with an unbelievable tragedy: You are not alone. You are not alone. This country cares about you and is going to invest in your future. But I also think thank you to the Corps of Engineers. It is quite clear they have probably made some mistakes in all of our States. It is also clear that it would be a pretty difficult circumstance for a State or for people in any State to fight these battles without the experience and the knowledge and the capability of the Corps of Engineers.

I just think from time to time constructive criticism is in order. I think also from time to time a thank-you is in order. I also think in every case--in each and every case, the truth is in order. I will go through and in every single circumstance describe where the Senator from Louisiana has said the Corps of Engineers has the authority and has the funding, and I will show him that he is dead wrong, and I think he knows it.

But if this impasse continues, my colleague, Senator Reid, the majority leader, does have the capability to take 2 days of the Senate's time to file a cloture motion, and my expectation would be that the vote would be 99 to 1 because I don't know of one other Member of the Senate who wants to hold up the promotion of soldiers in order to meet demands that a specific Federal agency cannot possibly meet.

I yield the floor.

Madam President, are we in morning business?

Madam President, I ask unanimous consent to speak as in morning business for as much time as I may need.

Madam President, I have come to speak about the New START Treaty--Strategic Arms Reduction Treaty--with the Russians. I wish to talk about that in some detail.

A week ago, I and other colleagues were in Russia at a site near Moscow looking at a facility that we in the United States are funding to try to make this a safer world, to safeguard nuclear materials and nuclear warheads in the Soviet Union. I wish to talk a bit about this program as it relates to this new START Treaty.

Some of my colleagues have expressed concern and are determined that they are not necessarily supportive of the START arms reduction treaty unless other things are done. I wish to talk about that just a bit.

First, I will describe the unbelievable succession of something we have been doing called the Nunn-Lugar program, the Nunn-Lugar Cooperative Threat Reduction Program. We talk about what doesn't work and what fails, but we don't talk so much about what does work. I will do that for a moment.

I ask unanimous consent to show three things I have had in my desk drawer.

This is a wing strut from a backfire bomber, a Soviet backfire bomber. This is a bomber that would have carried nuclear weapons that would threaten this country as a potential adversary. This is from this airplane. As you can see, this airplane, this backfire bomber, doesn't exist anymore. We didn't shoot it down. I have the wing strut because we sawed it up as part of an arms control and reduction treaty reducing delivery vehicles. This bomber don't exist and carry nuclear weapons because the Nunn-Lugar program helped dismantle that bomber under agreements we have had with the Soviet Union and now with Russia.

This photo is of a typhoon-class ballistic missile submarine the Soviets had. It carried missile launch tubes. This is a missile tube from that submarine. You will see that these tubes don't exist in the submarine anymore. They are now scrap metal. This is copper wire that comes from that Soviet submarine that used to prowl the seas with nuclear weapons threatening our country. This ground-up copper wire from that submarine was not because we sank the submarine but because we have a program by which we reduced the delivery vehicles for nuclear weapons. We and the Soviets--now the Russians--have agreed to a systematic reduction of weapons and delivery vehicles.

This photo is of a missile silo in the Ukraine. This is an SS-18 missile silo. It was blown up as part of the Nunn-Lugar Cooperative Threat Reduction Program. This is what is left of the scrap metal.

I have a hinge here from this particular site in the Ukraine that housed a missile that had a nuclear warhead aimed at our country. Instead of a missile being on the ground in the Ukraine, there is now a field of sunflowers. A field of sunflowers is now planted where a missile that carried a nuclear warhead once existed.

This is unbelievable success, in my judgment, and something we ought to celebrate. With the help of the Nunn-Lugar program Ukraine, Kazakhstan, and Belarus are now nuclear weapons-free. Albania is chemical weapons-free; 7,500 deactivated nuclear warheads; 32 ballistic missile submarines gone; 1,419 long-range nuclear missiles gone; 906 nuclear air-to-service missiles gone; 155 nuclear bombers gone. We didn't shoot them down. We didn't destroy them in air-to-air combat or undersea warfare. We paid some money in a program called Nunn-Lugar with the Soviets and Russians to saw the wings off bombers and grind up the metal in submarines and take out missile silos in the Ukraine with missiles aimed at our country. Therefore, it is a safer world. The question is, How much safer and what more do we need to do?

I have previously read a portion of something into the Congressional Record. I will do it again ever so briefly.

On October 11, 2001--not many Americans know this--1 month after the 9/11 attack, George Tenet, Director of the CIA, informed the President that a CIA agent, code-named ``Dragonfire,'' had reported that al-Qaida terrorists possessed a 10-kiloton nuclear bomb, evidently stolen from the Russian arsenal. According to Dragonfire, the CIA agent, this nuclear weapon was now on American soil in New York City. That was 1 month after 9/11. The CIA had no independent confirmation of this report, but neither did it have any basis on which to dismiss it. Did Russia's arsenal include a large number of 10-kiloton weapons? Yes. Could the Russian Government account for all the nuclear weapons the Soviets built during the Cold War? No. Could al-Qaida have acquired one of those weapons? It could have. If a terrorist had acquired it, could they have detonated it? Perhaps. Smuggled it into an American city? Likely.

So in the hours that followed this report on October 11, 2001, 1 month after 9/11, Secretary of State Condoleezza Rice analyzed what strategists then called the ``problem from hell.'' Unlike the Cold War, when the United States and the Soviet Union knew that an attack against the other would elicit a retaliatory strike in greater measure and therefore perhaps destroy both countries, the al-Qaida terrorist organization had no return address and had no such fear of reprisal. Even if the President were prepared to negotiate, al-Qaida had no phone number to call.

This comes from a book that was published by Graham Allison, a former Clinton administration official. I first learned about the incident from a piece in Time magazine, on March 11, 2002. The book that describes the detail of it is pretty harrowing. It is a pretty frightening prospect. I will not read more of it. I have read a fair amount of it.

After some while, it was determined that this was not a credible intelligence piece of information. But for a month or so, there was great concern about the prospect of a terrorist group having stolen a nuclear weapon, smuggled it into an American city, and being able to detonate it. Then we were not talking about 9/11; we were talking about a catastrophe in which hundreds and hundreds of thousands of people would be killed and life on Earth would never be the same. When and if ever a nuclear weapon is detonated in the middle of a major city on this planet, life will change as we know it.

That brings me to this question of nuclear reduction treaties and the work that has gone on. We have about 25,000 nuclear warheads on this planet. I have just described the apoplectic seizure that existed in October of 2001 because one CIA agent suggested he had credible evidence or a rumor that one terrorist group had stolen one small 10- kiloton nuclear weapon. Think of the angst that caused for about a month, which most Americans don't know about. But that was one weapon. There are 25,000 on this Earth--25,000 nuclear weapons. Russia probably has around 15,000.

This is not classified, by the way. This is from a recent estimate by the Union of Concerned Scientists. Most people say it is accurate. The United States has 9,400. China has 240. France has 300. Britain has 200.

The loss of one to a terrorist group--the detonation of that nuclear warhead in a major city would change life as we know it on planet Earth. So the question is, What do we do about that? We struggle to try to accomplish two goals--one, to prevent the spread of nuclear weapons to others who don't now have it, to prevent terrorists from ever acquiring it, and working very hard to accomplish both even while we again try a systematic reduction of nuclear weapons from the 25,000 level and particularly among those that have the most nuclear weapons. We understand it is very difficult to reach these agreements, and when reached, it is very difficult to get them agreed to, get the support by what is necessary in the Senate.

About 95 percent of the nuclear weapons are owned by the United States of America and by Russia. There are a lot of groups in this world that are very interested in acquiring one nuclear weapon with which to terrorize this planet.

We are now operating under the Strategic Offensive Reductions Treaty, known as the Moscow Treaty. It requires the United States and Russia to have no more than 2,200 deployed nuclear weapons--there are many more than that; I am talking about deployed in the field--by 2012.

The Strategic Offensive Reduction Treaty we are now operating under does not restrict any nuclear delivery vehicles at all--airplanes, missiles, and so on--and it does not have any verification measures and it expires in 2012.

A few weeks ago in Prague, the Czech Republic, President Obama and Russian President Medvedev signed a new strategic arms control treaty. It is called START. I compliment the administration for successfully completing this treaty. I was part of a group in the Senate that continued to meet with and review with the negotiators the progress of their work. Their work was long and difficult, but they reached an agreement with the Russians.

It limits each side to 1,550 deployed strategic nuclear warheads, which is 30 percent lower than the Moscow Treaty under which we are now operating.

It limits each side to 800 deployed and nondeployed ICBM launchers, SLBM launchers, and heavy bombers--these are all delivery vehicles-- equipped for nuclear armaments. That is one-half of what the START treaty allowed.

It sets a separate limit of 700 deployed ICBMs and SLBMs and deployed heavy bombers that are equipped for nuclear weapons.

The treaty, in addition, has a verification regime, which is very important. You can have a treaty with someone, but if you cannot verify and inspect, then you have a problem. This treaty with the Russians has onsite inspections and exhibitions, telemetry exchanges, data exchanges and notifications, and provisions to facilitate the use of a national technical means for treaty monitoring.

This, in my judgment, is a good treaty that will strengthen this country. It will reduce by 30 percent the number of strategic nuclear warheads that Russia could possess and target at the United States. It allows our country to determine our own force structure and gives us the flexibility to deploy and maintain our strategic nuclear forces in a way that best serves our own national security interests.

The new Nuclear Posture Review, as my colleagues know, says the United States will maintain the nuclear triad of land-based missiles, ballistic missile submarines, as well as bombers. The Obama administration has said as long as nuclear weapons exist, this country will maintain a safe, secure, and effective arsenal to deter any adversary and to protect our allies.

This new START treaty gives us an important window into Russia's strategic arsenal and to ensure that Russia will not be able to surprise us and try to change that balance.

This treaty contains no limits on our ability to continue developing and fielding missile defenses. Our country is doing some of that. Frankly, I have some questions about the cost and the effectiveness of some of what we are doing. Nonetheless, there is no limitation on that in this treaty.

As was done in the case of START, Russia has made a unilateral statement regarding missile defenses. Its statement is not legally binding and does not constrain us in any of our U.S. missile defense programs.

In my judgment, this treaty is very important. It is a very important first step--only a first step--because much more needs to be done. But it is important in terms of enhancing our security and world security. This will bolster, in my judgment, the Nonproliferation Treaty. It demonstrates that the United States and Russia are living up to their part of the deal under the NPT to begin reducing arms. I think it will strengthen Washington's hand in a tighter nuclear nonproliferation regime, especially at the May NPT conference.

Some Senators have said, as would be the case, I suppose, with any treaty: We are concerned about this because we think it weakens America's hand; we think it cuts our nuclear arsenal too deeply. I think they are wrong on that point. They are wrong. We have plenty of nuclear weapons. Not enough nuclear weapons is not among our problems; we have plenty. So do the Russians. We can blow up this planet 150 times and more. We have plenty of nuclear weapons. The question is, How do we and the Russians and others begin to reduce the number of nuclear weapons, and, most important, how do we stop the spread of nuclear weapons?

Let me put up a chart that shows what the Chairman of the Joint Chiefs of Staff said last month:

I, the Vice Chairman, and the Joint Chiefs, as well as our

combatant commanders around the world, stand solidly behind

this new treaty, having had the opportunity to provide our

counsel, to make our recommendations, and to help shape the

final agreements.

This is the Chairman of the Joint Chiefs. He says he and the Joint Chiefs believe this represents our country's best national security interest.

Here is what some others are saying. Douglas Feith, not particularly unexpected. I can pretty much guess what he will say on anything dealing with security if I saw his name tag, I guess. Doug Feith, a former Defense official under the previous administration, says:

Since the administration is so eager for [the treaty], the

main interests of conservatives--

Meaning him and his friends, neo-cons among other things--

will relate to modernization. Republicans are interested in

the U.S. nuclear posture, the political leverage they have

will be the treaty . . . One of the hot issues is going to be

the replacement warhead . . .

What does he mean? We are going to use this treaty as leverage to force the government to develop a new nuclear warhead program called the RRW, the Reliable Replacement Warhead.

I am chairman of the subcommittee that funds that program. We stopped funding that warhead. That warhead was an outgrowth of the Congress deciding we are not going to fund the provision before it for another nuclear warhead. We remember the provision: Now we have to build earth- penetrating, bunker-buster nuclear weapons. That was the thing about 5 years ago.

The Congress said: We are not going to build earth-penetrating, bunker-buster nuclear weapons. There is no end to the menu of nuclear weapons some people want. We are not going to do that. That morphed into Reliable Replacement Warhead, RRW, that was to begin replacing our existing stock of warheads in a big program with the Navy, Air Force, and so on. We stopped that as well. We did not stop it because we did not have the money or anything like that. We stopped it because it is not necessary.

We have a process by which we certify that the current nuclear stockpile works, that it is effective. We have a process by which we do that. We have a lot of interest by other groups that have weighed in on the science of this, saying our existing stock of nuclear weapons will last much longer than some had suggested without spending hundreds of billions of dollars for replacement. Yet some will never be satisfied.

Here are statements by some Senators who also will want to use the ratification of this START treaty as leverage. One Senator said:

Well, I can tell you this, that I think the Senate will

find it very hard to support this treaty if there is not a

robust modernization plan.

That is the need to design and build new nuclear weapons.

Another one said:

The success of your administration in ensuring the

modernization plan is fully funded in the authorization and

appropriations process could have a significant impact on the

Senate as it considers the START follow-on treaty.

And another one:

My vote on the START treaty will thus depend in large

measure on whether I am convinced the administration has put

forward an appropriate and adequately funded plan to sustain

and modernize the smaller nuclear stockpile it envisions.

As chairman of the Appropriations Energy and Water Development Subcommittee, I can tell my colleagues that the proposed budget for nuclear weapons, which is in my subcommittee, for fiscal year 2011 from this administration is more than enough to maintain the safety and reliability of our nuclear weapons; sufficient so that any Chairman of the Joint Chiefs can say with confidence and authority whose requirement it is to certify each year, that we have a nuclear arsenal that can be maintained as reliable and safe for the long-term future.

The National Nuclear Security Agency, the agency that oversees nuclear weapons, would see a 13-percent or $1.3 billion increase under this President's proposal. There are some who have argued this budget increase and planned future increases may not be sufficient to maintain the current stockpile. But that is just not the case. If we look at the budget request, the administration's budget request includes $7 billion for nuclear weapons activities. That is an increase of $624 million in this coming year. It invests significant money in what is called life extension programs. The nuclear weapons in our arsenal are not just the old nuclear weapons. We spend money all the time on life extension programs to make sure they are reliable.

I can go on and talk about the budget. The fact is, this President has sent us a budget that does what he thinks is necessary for the life extension programs and the additional funding. At a time when we have significant financial problems, he is proposing additional funding in this area.

This is a quote from Linton Brooks, who was the NNSA Administrator from 2003 to 2007 under George W. Bush, in February of this year:

START, as I now understand it, is a good idea on its own

merits, but I think for those who think it's only a good idea

if you only have a strong weapons program, I think this

budget ought to take care of that.

Coupled with the out-year projections, it takes care of the

concerns about the complex and it does very good things about

the stockpile and it should keep the labs healthy. . . .

That is what he said. That is important to understand when my colleagues come to the floor of the Senate and say: I don't know that I can support arms reductions because we want to make sure we have more money spent on nuclear weapons to build a whole class of new nuclear weapons.

Understand, there is nothing partisan here. The person who last headed this agency under George W. Bush said this budget takes care of that. It will give us the confidence we need.

The September 2009 ``Report on the Lifetime Extension Program'' by the JASON Program Office, which is a very respected group of scientists, said this:

JASON finds no evidence that accumulation of changes

incurred from aging and life extension programs have

increased risk to certification of today's deployed nuclear

warheads.

Simple.

Lifetimes of today's nuclear warheads could be extended for

decades, with no anticipated loss in confidence, by using

approaches similar to those employed in the life extension

programs to date.

We have people around here who are just unbelievably anxious to get moving to begin building an entire new class of nuclear weapons. Yet we have evidence from the science of nuclear weapons that the existing stock of nuclear weapons can be maintained with life extension programs for decades. Why would we do that?

I wish to make a concluding point. I wanted to talk about the START program because it is so important to the future of our relationship with Russia. But much more important than that, it is important for the world.

I pulled out of my desk a wing strut from a backfire bomber and ground-up copper from a Russian submarine. I have taken a hinge from a missile silo in the Ukraine that had an SS-18 with a nuclear warhead aimed at the United States. I have all those in my desk just to remind me every day there is a way to reduce the number of nuclear weapons: reduce the delivery vehicles without having air-to-air combat, without firing intercontinental ballistic missiles, and without detonating nuclear warheads. It is the kind of program we have engaged in, the Nunn-Lugar program, the Global Threat Reduction Program, and it is also treaties such as the START treaty.

If it is not our responsibility and if it does not fall on our shoulders to provide the world leadership to stop the spread of nuclear weapons, who else is going to do that? Who else? If you read the book by Graham Allison or understand the consequences of both 9/11 and also October 11 of the same year and the report by a CIA agent code named Dragonfire, that a terrorist group had stolen a 10-kiloton weapon and would detonate it in an American city, if that doesn't send chills down your spine for the future of this world, then there is something fundamentally wrong with your system.

We have to understand if we do not back away from this difficult specter of a new world in which terrorists are trying very hard to acquire nuclear weapons--they don't have to acquire very much. They have to acquire the equivalent of perhaps a 2-liter bottle of highly enriched uranium. Think of one of those 2-liter Coke bottles at the gas station that sits on the counter the next time you go past, 2 liters of soft drink. Think of 2 liters of highly enriched nuclear material to produce one nuclear weapon.

Some of my colleagues, at least some folks kind of made light of, and some commentators on the radio made fun of the very large group of foreign leaders that was called to this town a week ago to deal with this question of how we get our arms around and begin securing loose nuclear materials that exist around the world. That was nothing to laugh at. That was a historic opportunity by this administration, a big deal by this President to say: You know what. That leadership is our responsibility, and we are going to call leaders from all around the world to talk about these loose nuclear materials that can be acquired by a terrorist organization and made into a bomb, and we are going to secure these materials. We are spending money to do that. We are spending money in our budget to do that. But this President said: Let's work much harder. Let's rededicate ourselves, and not just us, let's all of us rededicate ourselves to gather and secure the loose nuclear material and prevent access to that material by a terrorist organization.

Again, this responsibility falls to us. It is our responsibility to lead, to help stop the spread of nuclear weapons. It is also our responsibility, hopefully, to lead toward where the nonproliferation treaty insists we go; that is, to fewer and fewer and fewer nuclear weapons on this planet.

I understand we will not and should not disarm unilaterally. I fully understand that. But I also understand that

having 25,000 nuclear weapons stored in various locations on this planet is not healthy for the long-term prospect of life on Earth. So it is our responsibility. It is an important step, a step only in the direction because it is not the giant step. But an important first step is to ratify this START treaty.

The Russians and the Americans worked very hard to construct a treaty that I think has great merit and will provide for a safer world. Following the ratification of this treaty, then there is even more work to do, much more work to do. But this is the step along the way that is important for all of us to embrace.

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

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