Passport Identity Verification Act

Mr. President, I am pleased today to join my friend and colleague Senator Dodd in reintroducing comprehensive legislation to combat credit card abuses that have been hurting American consumers for far too long. Our bill, which is supported and cosponsored by other Senate colleagues as well, is called the Credit Card Accountability Responsibility and Disclosure Act, or CARD Act of 2009. With the economic hardships facing Americans today, from falling home prices to rising unemployment, it is more important than ever for Congress to act now to stop credit card abuses and protect American families and businesses from unfair credit card practices.

Every day the taxpayer is being asked to foot the bill for our biggest banks' irresponsible lending decisions. America's banking giants can't be allowed to dig themselves out of the hole they are in by loading up American families with unfair fees and interest charges. Even as the prime rate has plummeted, some credit card companies are hiking interest rates on millions of customers who play by the rules. In other words, the banks are punishing the very taxpayers that they have come to, hat in hand, for financial rescue. It can't be allowed to continue.

Credit card companies regularly use a host of unfair practices. They hike the interest rates of cardholders who pay on time and comply with their credit card agreements. They impose interest rates as high as 32 percent, charge interest for debt that was paid on time, and, in some cases, apply higher interest rates retroactively to existing credit card debt. They pile on excessive fees and then charge interest on those fees. And they engage in a number of other unfair practices that are burying American consumers in a mountain of debt. It's long past time to enact legislation to protect American consumers.

In December, the Federal Reserve and other bank regulators finally issued a regulation to stop some of the most egregiously unfair practices. For example, the new credit card regulation stops banks from retroactively raising interest rates on cardholders who meet their obligations, requires banks to mail credit card bills at least 21 days before the payment due date, and forces banks to more fairly apply consumer payments. It is a good first step, and long overdue. But the regulation regrettably leaves in place many blatantly unfair credit card practices that mire families in debt. It fails to stop, for example, abuses such as charging interest on debt that was paid on time, charging folks a fee simply to pay their bills, and hiking interest rates on a credit card because of a misstep on another, unrelated debt, a practice known as universal default. Legislation is needed not only to end those abusive practices--which are not prohibited by the Federal Reserve regulation--but also to provide a statutory foundation for that new regulation so that it cannot be weakened in the future.

The bill we are introducing today will not only help protect consumers and ensure their fair treatment, but it will also make certain that credit card companies willing to do the right thing are not put at a competitive disadvantage by companies continuing unfair practices.

Some argue that Congress doesn't need to ban unfair credit card practices; they contend that improved disclosure alone will empower consumers to seek out better deals. Sunlight can be a powerful disinfectant, but credit cards have become such complex financial products that even improved disclosure will frequently not be enough to curb the abuses. Some practices are so confusing that consumers can't easily understand them. Additionally, better disclosure does not always lead to greater market competition, especially when essentially an entire industry is using and benefiting from practices that unfairly hurt consumers.

In 2006, Americans used 700 million credit cards to buy about $2 trillion in

goods and services. The average family now has 5 credit cards. Credit cards are being used to pay for groceries, mortgage payments, even taxes. And they are saddling U.S. consumers, from college students to seniors, with a mountain of debt. The latest figures show that U.S. credit card debt is now approaching $1 trillion. These consumers are routinely being subjected to unfair practices that squeeze them for ever more money, sinking them further and further into debt.

Congress acted boldly and quickly to bail out the banks; now is time to do something for the consumer. Too many American families are being hurt by too many unfair credit card practices to delay action any longer. I commend Senator Dodd, Chairman of the Senate Banking Committee, for tackling credit card reform, and look forward to Congress promptly and urgently taking the steps needed to ban unfair practices that are causing so much pain and financial damage to American families.

Abusive credit card practices are a concern that I have been tracking over the past several years through the Permanent Subcommittee on Investigations, which I chair. The Subcommittee held two investigative hearings in 2007, exposing those practices, and based on those hearings, I introduced legislation--the Stop Unfair Practices in Credit Cards Act, S. 1395--to ban the outrageous credit card abuses we documented. I am pleased that Senators McCaskill, Leahy, Durbin, Bingaman, Cantwell, Whitehouse, Kohl, Brown, Kennedy, and Sanders joined as cosponsors. The Dodd-Levin bill we are introducing today incorporates almost all of S. 1395, and adds other important protections as well. It is the strongest credit card bill yet.

The Dodd-Levin bill includes, for example, the following provisions that also appeared in the bill I introduced with Senator McCaskill and others. It would:

No Interest on Debt Paid on Time. Prohibit interest charges on any portion of a credit card debt which the card holder paid on time during a grace period.

Prohibition on Universal Default. Prohibit credit card issuers from increasing interest rates on cardholders in good standing for reasons unrelated to the cardholder's behavior with respect to that card.

Apply Interest Rate Increases Only to Future Debt. Require increased interest rates to apply only to future credit card debt, and not to debt incurred prior to the increase.

No Interest on Fees. Prohibit the charging of interest on credit card transaction fees, such as late fees and over-the-limit fees.

Restrictions on Over-Limit Fees. Prohibit the charging of repeated over-limit fees for a single instance of exceeding a credit card limit.

Prompt and Fair Crediting of Card Holder Payments. Require payments to be applied first to the credit card balance with the highest rate of interest, and to minimize finance charges.

Fixed Credit Limits. Require card issuers to offer consumers the option of operating under a fixed credit limit that cannot be exceeded.

No Pay-to-Pay Fees. Prohibit charging a fee to allow a credit card holder to make a payment on a credit card debt, whether payment is by mail, telephone, electronic transfer, or otherwise.

The Dodd-Levin bill also includes important additional protections. It would:

Require issuers to lower penalty rates that have been imposed on a cardholder after 6 months if the cardholder commits no further violations.

Enhance protection against unfair and deceptive practices by giving each federal banking agency the authority to prescribe regulations governing unfair or deceptive practices by banks or savings and loan institutions.

Improve disclosure requirements by, for example, requiring issuers to provide individual consumer account information and to disclose the period of time and total interest it will take to pay off the card balance if only minimum monthly payments are made.

Protect young consumers from credit card solicitations.

To understand why these protections are needed, I would like to provide a brief overview of some of the most prevalent credit card abuses we uncovered and some of the stories that American consumers shared with us during the course of the inquiries carried out by my Permanent Subcommittee on Investigations.

The first case history we examined illustrates the fact that major credit card issuers today impose a host of fees on their cardholders, including late fees and over-the-limit fees that are not only substantial in themselves but can contribute to years of debt for families unable to immediately pay them.

Wesley Wannemacher of Lima, Ohio, testified at our March 2007 hearing. In 2001 and 2002, Mr. Wannemacher used a new credit card to pay for expenses mostly related to his wedding. He charged a total of about $3,200, which exceeded the card's credit limit by $200. He spent the next six years trying to pay off the debt, averaging payments of about $1,000 per year. As of February 2007, he'd paid about $6,300 on his $3,200 debt, but his billing statement showed he still owed $4,400.

How is it possible that a man pays $6,300 on a $3,200 credit card debt, but still owes $4,400? Here's how. On top of the $3,200 debt, Mr. Wannemacher was charged by the credit card issuer about $4,900 in interest, $1,100 in late fees, and $1,500 in over-the-limit fees. He was hit 47 times with over-limit fees, even though he went over the limit only 3 times and exceeded the limit by only $200. Altogether, these fees and the interest charges added up to $7,500, which, on top of the original $3,200 credit card debt, produced total charges to him of $10,700.

In other words, the interest charges and fees more than tripled the original $3,200 credit card debt, despite payments by the cardholder averaging $1,000 per year. Unfair? Clearly, but our investigation has shown that sky-high interest charges and fees are not uncommon in the credit card industry. While the Wannemacher account happened to be at Chase, penalty interest rates and fees are also employed by other major credit card issuers.

The week before our March hearing, Chase decided to forgive the remaining debt on the Wannemacher account, and while that was great news for the Wannemacher family, that decision didn't begin to resolve the problem of excessive credit card fees and sky-high interest rates that trap too many hard-working families in a downward spiral of debt.

These high fees are made worse by the industry-wide practice of including all fees in a consumer's outstanding balance so that they also incur interest charges. Those interest charges magnify the cost of the fees and can quickly drive a family's credit card debt far beyond the cost of their initial purchases. It is one thing for a bank to charge interest on funds lent to a consumer; charging interest on penalty fees goes too far.

A second troubling case history involves Charles McClune, a 51-year- old Michigan resident who is married with one child. Mr. McClune has a credit card account which he closed in 1998, and has been trying to pay off for more than 10 years. Due to excessive fees and interest rates, and despite paying more than four times his original credit card debt of less than $4,000, Mr. McClune still owes thousands on his credit card, with no end in sight.

Mr. McClune first opened his credit card account while in college, in 1986, at Michigan National Bank through a student-targeted credit promotion. After leaving college, the credit limit on his card was increased to $4,000. By 1993, although he had not exceeded the credit limit through purchases, Mr. McClune had missed some payments and was assessed interest and fees that pushed his balance over the $4,000 limit. From 1993 to 1996, he exceeded his limit again, on several occasions, due to interest and fee charges. He stopped making purchases on the credit card in 1995.

In 1996, Mr. McClune's credit card account was purchased by Chase Bank. In 1998, Mr. McClune asked Chase to close the account, and Chase did so. Although he never made a single purchase on his credit card while the account was with Chase, Chase repeatedly increased the interest rate on his account, including after the account was closed. In 2002, for example, his interest rate was about 21 percent; by October 2005, it had climbed to 29.99 percent where it remained for more than two years until March 2008; it then

dropped slightly to 29.24 percent. The higher interest rates were applied retroactively to Mr. McClune's closed account balance, increasing the size of his minimum payments and his overall debt.

Chase also assessed Mr. McClune repeated over-the-limit and late fees, which began at $29 and increased over time to $39 per fee. Chase cannot locate statements for Mr. McClune's account prior to February 2001, so there is no record of all the fees he has paid. The records in existence show that, since February 2001, he has paid 64 over-the-limit fees totaling $2,200. Those fees stopped after the March 2007 hearing before my Subcommittee, in which Chase promised to stop charging more than three over-the-limit fees for a single violation of a credit card limit. In addition to the 64 over-the-limit fees, since February 2001, Chase has charged Mr. McClune nearly $2,000 in late fees.

The records also show that since 2001, Mr. McClune was contacted by telephone on several occasions by Chase representatives seeking payment on his account. If he agreed to make a payment over the telephone, Chase charged him--without notifying him at the time--a fee of $12 to $15 per telephone payment. When asked about these fees, Chase told the Subcommittee that the fees were imposed, because on each occasion Mr. McClune had spoken with a ``live advisor.'' Since 2001, he has paid a total of $160 in these pay-to-pay fees.

Altogether, since 2001, Mr. McClune has paid nearly $4,400 in fees on a debt of less than $4,000. If the more than four years of missing credit card bills were available from 1996 to 2000, this fee total would be even higher. In addition, each fee was added to Mr. McClune's outstanding credit card balance, and Chase charged him interest on the fee amounts, thereby increasing his debt by thousands of additional dollars.

In February 2001, Chase records show that Mr. McClune's credit card debt totaled nearly $5,200. For the next 7 years, although he did not pay every month, Mr. McClune paid nearly $2,000 per year toward his credit card debt, but was unable to pay it off. At one time, he paid $150 every two weeks for several weeks. Those payments did not bring his debt under the $4,000 credit limit, or reduce his interest rate.

In January 2007, Mr. McClune received a letter from Chase stating that if he made his next payment on time, he would receive a $50 credit on his debt. Mr. McClune cashed out his IRA and paid $4,000 on his credit card debt. Because he made this payment in February, however, he did not receive the $50 credit for an on-time payment. Instead, he was assessed a $39 late fee, a $39 over-the-limit fee, and a $14.95 payment fee for making the $4,000 payment over the telephone.

Mr. McClune was never offered a payment plan or a reduced interest rate by Chase to help him pay down his debt. His credit card bills show that from February 2001 to June 2008, he paid Chase a total of $15,800. If the four years of missing credit card bills from 1996 to 2000 were available, his total payments would likely exceed $20,000. In June 2008, his credit card bill showed he was charged 29 percent interest and a $39 late fee on a balance of $3,300.

How could Mr. McClune pay $15,000 to $20,000 on credit card purchases of less than $4,000, and still owe $3,300? His credit card statements since 2001 show that he was socked with over $9,700 in interest charges, $2,200 in over-the-limit fees, $2,000 in late fees, and $160 in pay-to-pay fees. All of these interest charges and fees were assessed by Chase while the account was closed and without a single purchase having been made since 1995. Despite his lack of purchases and payments totaling $15,800, Chase records show that, from February 2001 until June 2008, Mr. McClune was able to reduce his credit card balance by only about $1,850.

Mr. McClune is not trying to avoid his debt. He has made years of payments on a closed credit card account that he has not used to make a purchase in 13 years. He has paid thousands and thousands of dollars-- four and possibly five times what he originally owed--in an attempt to pay off his credit card account. He is still paying. But his thousands of dollars in payments are not enough for his credit card issuer which is squeezing him for every cent it can, fair or not, for years on end.

Tragically, Mr. McClune and Mr. Wannemacher have a lot of company in their credit card experiences. The many case histories investigated by the Subcommittee show that responsible cardholders across the country are being squeezed by unfair credit card lending practices involving excessive fee and interest charges. The current regulatory regime--even with the new Federal Reserve regulation--is insufficient to prevent these ongoing credit card abuses. Legislation is badly needed.

Another galling practice featured in our March hearing involves the fact that credit card debt that is paid on time routinely accrues interest charges, and credit card bills that are paid on time and in full are routinely inflated with what I call ``trailing interest.'' Every single credit card issuer contacted by the Subcommittee engaged in both of these unfair practices which squeeze additional interest charges from responsible cardholders.

Here's how it works. Suppose a consumer who usually pays his account in full, and owes no money on December 1st, makes a lot of purchases in December, and gets a January 1 credit card bill for $5,020. That bill is due January 15. Suppose the consumer pays that bill on time, but pays $5,000 instead of the full amount owed. What do you think the consumer owes on the next bill?

If you thought the bill would be the $20 past due plus interest on the $20, you would be wrong. In fact, under industry practice today, the bill would likely be twice as much. That's because the consumer would have to pay interest, not just on the $20 that wasn't paid on time, but also on the $5,000 that was paid on time. In other words, the consumer would have to pay interest on the entire $5,020 from the first day of the new billing month, January 1, until the day the bill was paid on January 15, compounded daily. So much for a grace period! In addition, the consumer would have to pay the $20 past due, plus interest on the $20 from January 15 to January 31, again compounded daily. In this example, using an interest rate of 17.99 percent (which is the interest rate charged to Mr. Wannamacher), the $20 debt would, in one month, rack up $35 in interest charges and balloon into a debt of $55.21.

You might ask--hold on--why does the consumer have to pay any interest at all on the $5,000 that was paid on time? Why does anyone have to pay interest on the portion of a debt that was paid by the date specified in the bill--in other words, on time? The answer is, because that's how the credit card industry has operated for years, and they have gotten away with it.

There's more. You might think that once the consumer gets gouged in February, paying $55.21 on a $20 debt, and pays that bill on time and in full, without making any new purchases, that would be the end of it. But you would be wrong again. It's not over.

Even though, on February 15, the consumer paid the February bill in full and on time--all $55.21--the next bill has an additional interest charge on it, for what we call ``trailing interest.'' In this case, the trailing interest is the interest that accumulated on the $55.21 from February 1 to 15, which is the time period from the day when the bill was sent to the day when it was paid. The total is 38 cents. While some issuers will waive trailing interest if the next month's bill is less than $1, if a consumer makes a new purchase, a common industry practice is to fold the 38 cents into the end-of-month bill reflecting the new purchase.

Now 38 cents isn't much in the big scheme of things. That may be why many consumers don't notice these types of extra interest charges or try to fight them. Even if someone had questions about the amount of interest on a bill, most consumers would be hard pressed to understand how the amount was calculated, much less whether it was incorrect. But by nickel and diming tens of millions of consumer accounts, credit card issuers reap large profits. I think it is indefensible to make consumers pay interest on debt which they pay on time. It is also just plain wrong to charge trailing interest when a bill is paid on time and in full.

My Subcommittee's second hearing focused on another set of unfair credit card practices involving unfair interest

rate increases. Cardholders who had years-long records of paying their credit card bills on time, staying below their credit limits, and paying at least the minimum amount due, were nevertheless socked with substantial interest rate increases. Some saw their credit card interest rates double or even triple. At the hearing, three consumers described this experience.

Janet Hard of Freeland, Michigan, had accrued over $8,000 in debt on her Discover card. Although she made payments on time and paid at least the minimum due for over two years, Discover increased her interest rate from 18 percent to 24 percent in 2006. At the same time, Discover applied the 24 percent rate retroactively to her existing credit card debt, increasing her minimum payments and increasing the amount that went to finance charges instead of the principal debt. The result was that, despite making steady payments totaling $2,400 in twelve months and keeping her purchases to less than $100 during that same year, Janet Hard's credit card debt went down by only $350. Sky-high interest charges, inexplicably increased and unfairly applied, ate up most of her payments.

Millard Glasshof of Milwaukee, Wisconsin, a retired senior citizen on a fixed income, incurred a debt of about $5,000 on his Chase credit card, closed the account, and faithfully paid down his debt with a regular monthly payment of $119 for years. In December 2006, Chase increased his interest rate from 15 percent to 17 percent, and in February 2007, hiked it again to 27 percent. Retroactive application of the 27 percent rate to Mr. Glasshof's existing debt meant that, out of his $119 payment, about $114 went to pay finance charges and only $5 went to reducing his principal debt. Despite his making payments totaling $1,300 over twelve months, Mr. Glasshof found that, due to high interest rates and excessive fees, his credit card debt did not go down at all. Later, after the Subcommittee asked about his account, Chase suddenly lowered the interest rate to 6 percent. That meant, over a one year period, Chase had applied four different interest rates to his closed credit card account: 15 percent, 17 percent, 27 percent, and 6 percent, which shows how arbitrary those rates are.

Then there is Bonnie Rushing of Naples, Florida. For years, she had paid her Bank of America credit card on time, providing at least the minimum amount specified on her bills. Despite her record of on-time payments, in 2007, Bank of America nearly tripled her interest rate from 8 to 23 percent. The Bank said that it took this sudden action because Ms. Rushing's FICO credit score had dropped. When we looked into why it had dropped, it was apparently because she had opened Macy's and J. Jill credit cards to get discounts on purchases. Despite paying both bills on time and in full, the automated FICO system had lowered her credit rating, and Bank of America had followed suit by raising her interest rate by a factor of three. Ms. Rushing closed her account and complained to the Florida Attorney General, my Subcommittee, and her card sponsor, the American Automobile Association. Bank of America eventually restored the 8 percent rate on her closed account.

In addition to these three consumers who testified at the hearing, the Subcommittee presented case histories for five other consumers who experienced substantial interest rate increases despite complying with their credit card agreements.

I'd also like to note that, in each of these cases, the credit card issuer told our Subcommittee that the cardholder had been given a chance to opt out of the increased interest rate by closing their account and paying off their debt at the prior rate. But each of these cardholders denied receiving an opt-out notice, and when several tried to close their account and pay their debt at the prior rate, they were told they had missed the opt-out deadline and had no choice but to pay the higher rate. Our Subcommittee examined copies of the opt-out notices and found that some were filled with legal jargon, were hard to understand, and contained procedures that were hard to follow. When we asked the major credit card issuers what percentage of persons offered an opt-out actually took it, they told the Subcommittee that 90 percent did not opt out of the higher interest rate--a percentage that is contrary to all logic and strong evidence that current opt-out procedures don't work.

The case histories presented at our hearings illustrate only a small portion of the abusive credit card practices going on today. Since early 2007, the Subcommittee has received letters and emails from thousands of credit card cardholders describing unfair credit card practices and asking for help to stop them, more complaints than I have received in any investigation I've conducted in more than 25 years in Congress. The complaints stretch across all income levels, all ages, and all areas of the country. The bottom line is that these abuses have gone on for too long. In fact, these practices have been around for so many years that they have in many cases become the industry norm, and our investigation has shown that many of the practices are too entrenched, too profitable, and too immune to consumer pressure for the companies to change them on their own.

For these reasons, I urge my colleagues to support enactment of the Dodd-Levin Credit CARD Act this year. Congress has already gone to bat for the banks that engage in abusive credit card practices; it's time we go to bat for the American family.

Mr. President, I am proud to join Senators Leahy, Specter, and Kennedy in introducing the State Secrets Protection Act of 2009. This bill establishes uniform procedures for courts to use when evaluating governmental assertions of the state secrets privilege in civil litigation. It takes an important step toward restoring the rule of law by ensuring that the privilege will be used only to protect true state secrets, and not as a means for the Government to avoid accountability for its actions.

In a democracy, the public should have the right to know what its government is doing. That should be the rule, and secrecy should be the rare exception, reserved for the very few cases in which the national security is truly at stake. Unfortunately, the Bush administration stood that presumption on its head, cloaking its actions in secrecy whenever possible and grudgingly submitting to public scrutiny only when it couldn't be avoided. The ``state secrets'' privilege was a favorite weapon in that administration's arsenal of secrecy.

None of us disputes that information may properly be withheld as a ``state secret'' when disclosing the information would cause grave damage to national security. The problem arises when the privilege is abused and invoked to shield Government wrongdoing. Indeed, that is exactly what happened the first time the Supreme Court recognized the privilege in 1953, in the case of United States v. Reynolds. The Government had been sued after a military aircraft crash killed nine people, and it invoked the ``state secrets'' privilege to shield an internal investigative report. Decades later, when the report was declassified, it revealed nothing that could fairly be characterized as a ``state secret'' but it did reveal faulty maintenance of the aircraft.

Abuses like these can be prevented, but only if the courts fulfill their responsibility to carefully review claims

of privilege. In the Reynolds case, no court actually looked at the supposedly privileged report. That simple step would have prevented the miscarriage of justice that ensued. Yet, despite the fact that courts have the acknowledged authority to order in camera review of the evidence, fewer than one third of courts have actually exercised that option when the Government has asserted the ``state secrets'' privilege. And a host of other tools available to the courts to evaluate and respond to claims of privilege have been employed inconsistently at best, resulting in a confused body of case law that preserves accountability in some cases while granting the government a ``get out of jail free'' card in others.

In the last Congress, Senators Kennedy, Specter, and Leahy introduced the State Secrets Protection Act to standardize the procedures courts use in cases where the Government asserts the ``state secrets'' privilege and to ensure adequate scrutiny of such claims. The bill was reported by the Judiciary Committee last April after extensive debate. Much of the credit for this legislation goes to Senator Kennedy, whose unfailing commitment to the rule of law inspired both the concept and the particulars of this bill. I had the honor of working with him to develop this legislation, and it is a pleasure now to cosponsor its reintroduction, with Senator Leahy as the lead sponsor.

The bill makes use of existing tools that are available to the courts when handling national security information. Perhaps the most fundamental of these is in camera review of the allegedly privileged evidence, which the bill requires. The idea here is simple: Determining what information the evidence contains is the threshold step in determining whether that evidence is privileged. This step is far too important to be left to a party with a built-in conflict of interest. Just as a court would never accept a private litigant's description of his or her evidence in lieu of the evidence itself, the court should not rely solely on the Government's description of the evidence when the Government has a clear interest in the outcome of the case.

That courts may examine sensitive national security information in camera is beyond any serious dispute. Since 1974, the Freedom of Information Act has allowed courts to engage in in camera review of any records that the Government claims are exempt from disclosure under the Act. Courts have also reviewed the most sensitive national security information in criminal cases, pursuant to the Classified Information Procedures Act. In fact, courts handle highly classified information on a regular basis. There is no legitimate justification for skipping this crucial step.

The bill also requires courts to hold in camera hearings on the question of whether the evidence is privileged. Based on the court's previous review of the evidence, the court may conduct the hearing ex parte i.e., without any participation by the plaintiff or the plaintiff's lawyers but only if the court finds that national security cannot adequately be protected through other means. For example, the court may limit attendance at the hearing to attorneys with the requisite clearances, or the court may appoint a guardian ad litem to represent the plaintiff's interests at the hearing. The bill thus preserves the adversarial process to the maximum extent consistent with protecting national security.

That's important, for at least two reasons. First, our justice system is premised on the notion of fairness, and that principle of fairness is undermined any time a party to litigation is excluded from the proceedings. But fairness isn't the only principle at stake. For all its complications and occasional inefficiencies, the adversarial process remains the best system for getting to the truth. If only one party is present at the hearing, the court is more likely to reach the wrong result it's as simple as that.

Taken together, the requirements of in camera review of the evidence and an in camera hearing ensure that the Government's claim of privilege is evaluated fairly and thoroughly. A fair, thorough review is necessary, because the bill makes absolutely clear that once evidence is found to be privileged, it cannot be disclosed, however great the plaintiff's need for the evidence may be. The interest of national security, once the court determines that interest is truly at stake, is given absolute protection.

That may mean the end of the lawsuit but it may not. As Congress recognized when it passed the Classified Information Procedures Act, courts have many tools at their disposal to move litigation forward even when some of the evidence cannot be disclosed. For example, courts can require the Government to submit non-privileged substitutes for the privileged evidence, such as summaries of the evidence, redacted versions, or admissions of certain facts. Under the bill, where the court finds that it would be feasible for the Government to craft a non-privileged substitute for privileged evidence, it may order the Government to do so. Again, however, the court can never compel the production of privileged evidence. If the Government refuses to craft a non-privileged substitute, the remedy is the same one that exists in the CIPA: the court may resolve the relevant issue of fact or law against the Government.

The bill does not allow courts to dismiss lawsuits at the pleadings stage based on a claim of ``subject matter privilege.'' As the Fourth Circuit has explained, ``subject matter privilege'' applies if the case is so pervaded with state secrets, it would be impossible to conduct the lawsuit without revealing them. Such cases undoubtedly exist. But until all of the relevant evidence is identified and the privilege determinations are made, any conclusion that a case will be pervaded with state secrets is simply a prediction. Only by proceeding through discovery and pre-trial hearings can that prediction be replaced with certainty. And this can be done without revealing a single state secret, since the bill allows privilege determinations to be made in camera and ex parte.

The bill does not change the ordinary rules of summary judgment. If a court determines, after discovery and pre-trial hearings are completed, that the key evidence is privileged and the plaintiff cannot prove his or her case using non-privileged evidence, then the Government may move for summary judgment and prevail. The bill thus retains the concept of ``subject matter privilege'' it simply requires a more thorough testing of the claim.

Nor does the bill ever put the Government to the ``Hobson's choice'' of either revealing privileged evidence or conceding the lawsuit. Under the bill, even if the plaintiff has made out a prima facie case, the court can and must dismiss the lawsuit if the Government would need to disclose privileged evidence in order to present a valid defense. The Government's interests, as well as the national security, are thus scrupulously protected.

Finally, the bill facilitates congressional oversight by requiring the executive branch to share with the Judiciary and Intelligence Committees the documents it makes available to the courts: the Government affidavit explaining why the evidence is privileged, the index of privileged evidence, and, where requested, the evidence itself. This information will help Congress monitor the Government's use of the privilege and assess the need for any further legislation.

Perhaps even more important, it will provide a means of accountability in those cases where the privilege prevents a court from ruling on allegations of Government wrongdoing. The idea of simply letting such allegations go unaddressed should be profoundly troubling to anyone who respects the rule of law yet for eight years, the response of the Bush administration was little more than a shrug. This bill rejects such a cavalier attitude toward the rule of law. The citizens of this country should never again be told that there is simply no remedy for wrongs their Government has committed. In cases where the courts cannot provide that remedy, then Congress should step in and providing the necessary information to the relevant committees of Congress will enable that to happen.

I am pleased that both the new Attorney General, Eric Holder, and the nominee for Associate Attorney General, Thomas Perrelli, have indicated a willingness to review this bill and work with us on it. I hope that it will be possible to fashion legislation that the Administration can support. The public

deserves to have confidence that the state secrets privilege is not going to be used to cover up Government misconduct. This bill provides the courts a system for resolving claims of privilege that will inspire that confidence.

A country where the Government need not answer to allegations of wrongdoing is a country that has strayed dangerously far from the rule of law. We must ensure that the ``state secrets'' privilege does not become a license for the Government to evade the laws that we pass. This bill accomplishes that goal, while simultaneously providing the strongest of protections to those items of evidence that truly qualify as state secrets. I urge all of my colleagues to support the rule of law by supporting this legislation.

Mr. President, I am pleased to join with my friend from California, Senator Feinstein, in introducing the Cluster Munitions Civilian Protection Act of 2009. This is a slightly revised version of a bill of the same name which we introduced in 2007.

Since December 3, 2008, when the Convention on Cluster Munitions opened for signature in Dublin, 96 countries have signed the treaty including Great Britain, Germany, Canada, Norway, Australia and other allies of the United States.

The treaty is the culmination of a year of negotiations, launched by Norway, among 107 governments that came together to prohibit the use of cluster munitions that cause unacceptable harm to civilians.

The Bush administration did not participate in the negotiations, which I believe was a mistake. As the Nation with the world's most powerful military we should not be on the sidelines while others are trying to protect the

lives and limbs of civilians who comprise the vast majority of war casualties today.

The Pentagon continues to insist that cluster munitions have military utility, and that the U.S. should retain the ability to use millions of cluster munitions in its arsenal which have estimated failure rates of 5 to 20 percent.

Of course, any weapon, whether cluster munitions, landmines, or even poison gas, has some military utility. But anyone who has seen the indiscriminate devastation cluster munitions cause over a wide area understands the unacceptable threat they can pose to civilians. These are not the laser guided weapons the Pentagon showed destroying their targets during the invasion of Baghdad.

There is the insidious problem of cluster munitions that fail to explode as designed and remain as active duds, like landmines, until they are triggered by whoever comes into contact with them. Often it is an unsuspecting child, or a farmer. We saw that recently in Lebanon, and in Laos people are still being killed and maimed by U.S. cluster munitions left from the Vietnam War.

Current law prohibits U.S. sales, exports and transfers of cluster munitions that have a failure rate exceeding 1 percent. That law also requires any sale, export or transfer agreement to include a requirement that the cluster munitions will be used only against military targets and not in areas where civilians are known to be present.

Last year, the Pentagon announced that it would meet the failure rate requirement for U.S. use of cluster munitions in 2018. While a step forward, I do not believe we can justify continuing to use weapons that so often fail, so often kill and injure civilians, and which many of our allies have renounced. That is not the kind of leadership the world needs and expects from the United States.

Senator Feinstein's and my bill would apply similar restrictions to the use of cluster munitions beginning immediately on the date of enactment. However, the bill does permit the President to waive the 1 percent requirement if he certifies that it is vital to protect the security of the United States. I urge the Pentagon to work with us by supporting this reasonable step.

I want to express my appreciation to all nations that have signed the treaty, and urge the Obama administration to review its policy on cluster munitions with a view toward putting the U.S. on a path to join the treaty as soon as possible. In the meantime, our legislation would go a long way toward putting the United States on that path.

There are some who dismissed the Cluster Munitions Convention as a pointless exercise, since it does not yet have the support of the United States and other major powers such as Russia, China, Pakistan, India, and Israel. These are some of the same critics of the Ottawa treaty banning antipersonnel landmines, which the U.S. and the other countries I named have also refused to sign. But that treaty has dramatically reduced the number of landmines produced, used, sold and stockpiled, and the number of mine victims has fallen sharply. Any government that contemplates using landmines today does so knowing that it will be condemned by the international community. I suspect it is only a matter of time before the same is true for cluster munitions.

It is important to note that the U.S. today has the technological ability to produce cluster munitions that would not be prohibited by the treaty. What is lacking is the political will to expend the necessary resources. There is no other excuse for continuing to use cluster munitions that cause unacceptable harm to civilians. I am committed to working in the Defense Appropriations Subcommittee to help secure the resources needed to make this new technology available.

I want to commend Senator Feinstein who has shown real passion and persistence in raising this issue and seeking every opportunity to protect civilians from these indiscriminate weapons.

Mr. President, today, I am introducing the bipartisan State Secrets Protection Act. I am pleased that Senator Kennedy, who had so much to do with developing this proposal last Congress is an original cosponsor of the bill along with Senators Specter, Feingold, Whitehouse and McCaskill. After a lengthy debate, this bill was reported by the Judiciary Committee last April.

The State secrets privilege is a common law doctrine that the Government can claim in court to prevent evidence that could harm national security from being publicly revealed. During the Bush administration, the State secrets privilege was used to avoid judicial review and skirt accountability by ending cases without consideration of the merits. It was used to stymie litigation at its very inception in cases alleging egregious Government misconduct, such as extraordinary rendition and warrantless eavesdropping on the communications of Americans.

The 2006 case of Khaled El-Masri, who was kidnapped and transported against his will to Afghanistan, where he was detained and tortured as part of the Bush administration's extraordinary rendition program, is one such example. He sued the government alleging unlawful detention and treatment. A district court judge dismissed the entire lawsuit after the Government invoked the State secrets privilege, solely on the basis of an ex parte declaration from the Director of the Central Intelligence Agency, and despite the fact that the Government had admitted that the rendition program exists. Mr. El-Masri has no other remedy. Our justice system is off limits to him, and no judge ever reviewed any of the actual evidence.

The State secrets privilege serves important goals where properly invoked. But there are serious consequences for litigants and for the American public when the privilege is used to terminate litigation alleging serious Government misconduct. For the aggrieved parties, it means that the courthouse doors are closed forever regardless of the severity of their injury. They will never have their day in court. For the American public, it means less accountability, because there will be no judicial scrutiny of improper actions of the executive, and no check or balance.

The State Secrets Protection Act will help guide the courts to balance the Government's interests in secrecy with accountability and the rights of citizens to seek judicial redress. The bill does not restrict the Government's ability to assert the privilege in appropriate cases. Rather, the bill would allow judges to look at the actual evidence the Government submits so that they, neutral judges, rather than self-interested executive branch officials, would render the ultimate decision whether the State secrets privilege should apply. This is consistent with the procedure for other privileges recognized in our courts.

We held a Committee hearing on this issue last year, and the appropriate use of this privilege remains an area of concern for me and for the cosponsors of this bill. In light of the pending cases where this privilege has been invoked, involving issues including torture, rendition and warrantless wiretapping, we can ill-afford to delay consideration of this important legislation. I hope all Senators will join us in supporting this bill.

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

Mr. President, I rise today with my friend and colleague from Vermont, Senator Leahy, to re-introduce the Cluster Munitions Civilian Protection Act.

The bill is also co-sponsored by Senators Bingaman, Boxer, Brown, Cardin, Casey, Durbin, Feingold, Kennedy, Mikulski, Menendez, Merkley, Sanders, Stabenow, and Whitehouse.

Our legislation places common sense restrictions on the use of cluster bombs. It prevents any funds from being spent to use cluster munitions that have a failure rate of more than one percent; and unless the rules of engagement specify: the cluster munitions will only be used against clearly defined military targets and; will not be used where civilians are known to be present or in areas normally inhabited by civilians.

The bill also requires the President to submit a report to the appropriate Congressional committees on the plan to clean up unexploded cluster bombs.

Finally, the bill includes a national security waiver that allows the President to waive the prohibition on the use of cluster bombs with a failure rate of more than one percent, if he determines it is vital to protect the security of the United States to do so.

Cluster munitions are large bombs, rockets, or artillery shells that contain up to hundreds of small submunitions, or individual ``bomblets.''

They are intended for attacking enemy troop formations and armor covering over a half mile radius.

Yet, in practice, they pose a real threat to the safety of civilians when used in populated areas because they leave hundreds of unexploded bombs over a very large area and they are often inaccurate.

Indeed, the human toll of these weapons has been terrible:

In Laos, approximately 11,000 people, 30 percent of them children, have been killed or injured by U.S. cluster munitions since the Vietnam War ended.

In Afghanistan, between October 2001 and November 2002, 127 civilians lost their lives due to cluster munitions, 70 percent of them under the age of 18.

An estimated 1,220 Kuwaitis and 400 Iraqi civilians have been killed by cluster munitions since 1991.

In the 2006 war in Lebanon, Israeli cluster munitions, many of them manufactured in the U.S., injured and killed 200 civilians.

During the 2003 invasion of Baghdad, the last time the U.S. used cluster munitions, these weapons killed more civilians than any other type of U.S. weapon.

The U.S. 3rd Infantry Division described cluster munitions as ``battlefield losers'' in Iraq, because they were often forced to advance through areas contaminated with unexploded duds.

During the 1991 Gulf War, U.S. cluster munitions caused more U.S. troop casualties than any single Iraqi weapon system, killing 22 U.S. servicemen.

Yet we have seen significant progress in the effort to protect innocent civilians from these deadly weapons since we first introduced this legislation in the 110th Congress.

In December, 95 countries came together to sign the Oslo Convention on Cluster Munitions which would prohibit the production, use, and export of cluster bombs and requires signatories to eliminate their arsenals within 8 years.

This group includes key NATO allies such as Canada, the United Kingdom, France, and Germany, who are fighting alongside our troops in Afghanistan.

In 2007, Congress passed and President Bush signed into law a provision from our legislation contained in the fiscal year 2008 Consolidated Appropriations Act prohibiting the sale and transfer of cluster bombs with a failure rate of more than one percent.

In addition, the Senate Appropriations Committee approved the fiscal year 2009 State, Foreign Operations and Related Programs Appropriations bill renewing the ban for another year.

I am confident this ban will be included in an fiscal year 2009 Omnibus appropriations bill.

These actions will help save lives. But much more work remains to be done and significant obstacles remain.

For one, the United States chose not to participate in the Oslo process or sign the treaty.

The Pentagon continues to believe that cluster munitions are ``legitimate weapons with clear military utility in combat.'' It would prefer that the United States work within the Geneva-based Convention on Certain Conventional Weapons, CCW, to negotiate limits on the use of cluster munitions.

Yet these efforts have been going on since 2001 and it was the inability of the CCW to come to any meaningful agreement which prompted other countries, led by Norway, to pursue an alternative treaty through the Oslo process.

A lack of U.S. leadership in this area has given cover to other major cluster munitions producing nations--China, Russia, India, Pakistan, Israel, and Egypt--who have refused to sign the Oslo Convention as well.

Recognizing the United States could not remain silent in the face of international efforts to restrict the use of cluster bombs, Secretary of Defense Robert Gates issued a new policy on cluster munitions in June 2008 stating that after 2018, the use, sale and transfer of cluster munitions with a failure rate of more than 1 percent would be prohibited.

The policy is a step in the right direction, but under the terms of this new policy, the Pentagon will still have the authority to use cluster bombs with high failure rates for the next ten years.

That is unacceptable and runs counter to our values.

The United States maintains an arsenal of an estimated 5.5 million cluster munitions containing 728 million submunitions which have an estimated failure rate of between 5 and 15 percent.

What does that say about us, that we are still prepared to use, sell and transfer these weapons with well known failure rates?

The fact is, cluster munition technologies already exist, that meet the one percent standard. Why do we need to wait ten years?

This delay is especially troubling given that in 2001, former Secretary of Defense William Cohen issued his own policy on cluster munitions stating that, beginning in fiscal year 2005, all new cluster munitions must have a failure rate of less than one percent.

Unfortunately, the Pentagon was unable to meet this deadline and Secretary Gates' new policy essentially postpones any meaningful action for another ten years.

That means, if we do nothing, by 2018 close to twenty years will have passed since the Pentagon first recognized the threat these deadly weapons pose to innocent civilians.

We can do better.

Our legislation simply moves up the Gates policy by ten years. For those of my colleagues who are concerned that it may be too soon to enact a ban on the use of cluster bombs with failure rates of more than one percent, I point out again that our bill allows the President to waive this restriction if he determines it is vital to protect the security of the United States to do so.

I would also remind my colleagues that the United States has not used cluster bombs in Iraq since 2003 and has observed a moratorium on their use in Afghanistan since 2002.

We introduced this legislation to make this moratorium permanent for the entire U.S. arsenal of cluster munitions.

We introduced this legislation for children like Hassan Hammade.

A 13-year-old Lebanese boy, Hassan lost four fingers and sustained injuries to his stomach and shoulder after he picked up an unexploded cluster bomb in front of an orange tree.

He said:

I started playing with it and it blew up. I didn't know it

was a cluster bomb--it just looked like a burned out piece of

metal.

All the children are too scared to go out now, we just play

on the main roads or in our homes.

I urge my colleagues to support this legislation. We should do whatever we can to protect more innocent children and other civilians from these dangerous weapons.

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

Mr. President, today I am reintroducing a bill I had introduced with then-Senator Hillary Clinton on two previous occasions. It is interesting, because this bill didn't have a lot of opposition in the Senate. It did, however, have some opposition from the Bush administration. What we were attempting to do was to take the Federal Emergency Management Agency out from under where it was put, in the Department of Homeland Security, by the previous administration and give it independent status. This is something that has been talked about for a long period of time.

We can draw from our experience in Oklahoma and the fact that we had a devastating tornado go through--as we did last night, although it was even worse--which killed many people. At that time, James Lee Witt was the FEMA Director. He was President Clinton's appointee. I will always remember when that happened. A matter of a

few short hours after it happened, I called Mr. Witt and he met me in Oklahoma, and we got it done. At that time, FEMA was under the Environment and Public Works Committee. It was under the Stafford Act and virtually had independent status at that time.

Contrast that with only a few months ago when GEN Russel Honore, the general placed in charge of the military's relief efforts following Hurricane Katrina, said that FEMA and the Department of Homeland Security should be separate agencies. In an interview reported in Politico, General Honore said of FEMA:

I just think we've had some experience that demonstrates

that the best thing to do is separate it and make it a

separate agency.

Most importantly, President Obama said in remarks he delivered in New Orleans in February of last year:

If catastrophe comes, the American people must be able to

call on a competent government . . . the Director of FEMA

will report to me . . . and as soon as we take office, my

FEMA director will work with emergency management officials

in all 50 States to create a National Response Plan. Because

we need to know--before disaster comes--who will be in

charge; and how the Federal, State and local governments will

work together to respond.

I talked to the President a few minutes ago. He still has these same feelings. I think it is very appropriate now to bring up something we had talked about before. I know the Democratic platform, for example, has a provision which states that the FEMA Director will report directly to the President, and I couldn't agree more. I don't agree with a lot of things from the Democratic platform, but I do agree with that.

Oklahoma has had more than its share of natural disasters. Only last night, three confirmed tornadoes touched down throughout Oklahoma, impacting the communities of Oklahoma City, Edmond, Pawnee, and a small community called Lone Grove. In Lone Grove, this very tiny community, eight people were killed. There are 35 still missing, so I think the death toll, unfortunately, could rise above that. I had occasion to talk to civic leaders there--Gary Hicks and city manager Marianne Elfert--this morning, and the number of Lone Grove residents who are missing right now is still not determined. So I think it is a real disaster.

It wasn't that long ago that we had the Eagle Picher area of Oklahoma hit by a tornado, and that was a very similar thing there, with seven deaths in that case. On May 1 of last year, I surveyed other tornado damage up there with Secretary Chertoff and FEMA Director Paulison, Governor Henry, and Congressman Boren. As I said, seven people were killed, but that didn't go quite as smoothly as we would have hoped.

FEMA's integration into the Department of Homeland Security in 2003 added an extra layer of bureaucracy and removed much of the autonomy that once kept the agency operating efficiently. We learned in the aftermath of Hurricane Katrina that the extra coordination required between the Department of Homeland Security and the Federal Emergency Management Agency was at least partly responsible for the shortcomings of the Federal response. I visited the area right after Katrina, and I think they did a much better job than the press portrayed, but I still think that extra level of bureaucracy created a problem in getting things done immediately.

My legislation takes the necessary steps in giving the Director of FEMA Cabinet level status in the event of a natural disaster and acts of terrorism and makes that person the principal adviser to the President, Homeland Security Council, and the Secretary of Homeland Security. So we are kind of reversing it, and he is going to be in a Cabinet-level position. Obviously, things can then be done a lot faster and a lot better. Perhaps most importantly, the legislation defines the primary mission and specific activities of the Federal Emergency Management Agency and its Director, and places directly upon them the obligation to ensure FEMA's mission is carried out.

Now, that is exactly what President Obama said while he was campaigning for President and what he reaffirmed to me today on the telephone.

Let me explain some other events that originally led me to introduce this legislation. Oklahoma first encountered significant problems with FEMA when wildfires ravaged the State in 2005 and 2006. These devastating wildfires swept through the entire State, leading to declarations for public assistance, individual assistance, and hazard mitigation funding. In January of 2007, Oklahoma encountered severe winter storms with devastating results. These storms led to prolonged loss of power and extensive building damage for many of my constituents. One of my constituents happened to be my wife--we have been married 49 years--and she was without electricity for 9 days, so that does get your attention.

Later this year, Oklahoma was hit by heavy rain, tornadoes, and flooding from May through September. The State made a number of disaster declarations during each of these periods, but each and every time, the process it took to obtain aid from FEMA became increasingly difficult, wrought with indecisiveness and an inability of Homeland Security to communicate with each other. Prior to the placement of FEMA under DHS, my State had not encountered nearly the same level of bureaucratic delays or communications as it has since that time.

Oklahoma has also struggled with FEMA regarding the determination of dates of incident periods, which is why I put language in my bill to give deference to the State's documentation regarding the dates of such incidents. Now, some of you guys are not from States where you have the number of disasters we have had, so it is something you are not as familiar with. But we certainly are. I see the junior Senator from Oklahoma on the floor here, and he knows too that we live through these things on a regular basis. We have had tornadoes, ice storms, windstorms, and other things people haven't had.

I think Senator Clinton and I were right when we introduced this the first time, and I believe it is consistent with what President Obama has reaffirmed to me as recently as today. It will be a better arrangement and I will be looking for supporters.

We have introduced the bill. It is S. 412. Again, this bill takes FEMA out from under DHS and gives it more of an independent status so it can respond in a more rapid way as it did prior to 2003.