Family Tax Relief Act of 2009

Mr. President, Americans have every right to be outraged over the recent bonuses given to employees of the group within AIG that led to that company's collapse. American taxpayers have provided $185 billion--and counting--to save a firm that has been deemed ``too interconnected to fail.''

It is unacceptable that millions of those taxpayer dollars have been handed over to some of the executives who caused this disaster in the first place. If there is a constitutional way to reclaim those bonuses, I support it.

But it is important to remember that executive compensation practices have been out of control for many years. While the wages and benefits of middle class workers have stagnated, CEO compensation has exploded.

According to the Economic Policy Institute's ``State of Working America,'' in 1965 U.S. CEOs at major companies made 24 times the pay of an average worker. By 2005, CEOs earned 262 times the pay of an average worker.

The comparison between CEOs and minimum wage workers is even starker. In 1965 U.S. CEOs at major companies made 51 times the pay of workers earning the minimum wage. By 2005, CEOs earned 821 times the pay of workers earning the minimum wage.

These comparisons are important not because they could be used to incite calls for class warfare, but because the American people deserve an honest accounting of the activities of the corporations that touch their lives in so many ways. Every American deserves an honest wage for honest work. And every American, from the top of the corporate ladder to the bottom, deserves to know whether they are being compensated fairly--whether they are sharing in the rewards of the company's work or whether their labors are mainly fueling ever more extravagant pay for the top executives.

We have lost the balance we once had in America. Executive pay has soared, while pay for many s has not even kept pace with their productivity increases. It's not surprising that there is widespread fury when CEOs get it wrong. After all, they have a hand in setting their own salaries. But recently, the anger of the average American worker has boiled over because so many CEOs have gotten it so wrong. That outcome is not healthy for our economy, and it's not healthy for our society.

If companies want to pay their executives handsomely for excellent performance, they should be able to do that. They should be able to compete for top talent. But the shareholders should be looking over their shoulders as they adopt excessive pay structures, and the taxpayers shouldn't be subsidizing the resulting income disparities.

To restore some balance, the shareholders of a corporation should have to approve lucrative compensation packages. And, the companies shouldn't receive a tax deduction for handing out excessive pay.

That is why today I am introducing two bills--the Excessive Pay Shareholder Approval Act S. 1006, and the Excessive Pay Capped Deduction Act, S. 1007.

The Excessive Pay Shareholder Approval Act would require a supermajority--60 percent--vote of the shareholders to approve a compensation structure in which any employee receives more than 100 times more than the average employee of that company. Corporations could pay executives whatever they think is appropriate, but shareholders would have to OK packages that are 100 times as large as the average worker earns. This bill would require greater transparency in compensation and would encourage companies to think about how they pay their lower-paid workers, not just how they reward the people at the top.

Similarly, the Excessive Pay Capped Deduction Act would limit the normal tax deduction for compensation for executives to 100 times the compensation of the average worker at that company. Again, corporations could pay executives whatever they decide is appropriate, but they could not claim limitless tax benefits for doing so. This bill also would encourage companies to look at their entire compensation structure, and it would protect taxpayers.

Here is an example. If the average worker at a company earned, including wages, paid leave, supplemental pay, and retirement, the same amount as the average worker nationwide in December of 2008, that worker would have earned around $50,000. At that company, a supermajority of shareholders would be required to approve pay packages larger than $5 million and that company could not deduct compensation in excess of $5 million.

How many companies would this affect? According to the research firm The Corporate Library, in 2007 the median compensation for CEOs of S&P 500 companies was $8.8 million. Therefore, if these companies are only paying average wages across the rest of the company, many of them would be affected by this legislation. Many would not.

From our founding, this country has benefitted from a sense of unity and balance that has brought Americans together in good times and in bad. If the rewards handed out by our leading corporations flow excessively to the very wealthy while leaving middle-class families behind, we risk losing that sense of common purpose. The uproar over AIG bonuses showed very clearly the corrosive effects of compensation packages that appear to be disconnected from the reality that the average family faces day in and day out.

The two bills I am introducing today would help to restore some of the balance we have lost, by ensuring greater accountability for the disparities in compensation for corporate leaders and the average workers they employ, and by protecting taxpayers when a company's compensation packages reach extreme levels.

I urge my colleagues to support both bills.

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

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

Mr. President, I rise today to introduce the Military Retirement Pay Fairness Act of 2009. I want to thank my colleague, Senator Gregg, for cosponsoring this important legislation.

The Military Retirement Pay Fairness Act addresses a critical issue that impacts our nation's veterans. Certain service members who receive special separation pay must have that benefit recouped if they later re-enlist and become eligible for a pension. Under current law, the Department of Defense, DOD, is bound by a statutory formula for recouping that benefit and cannot change the amount it recoups each month, even if it results in severe financial hardship for our nation's veterans. In fact, many veterans are currently in dire financial straits because of this unnecessarily harsh formula. This legislation will fix the formula and provide these veterans with much needed financial relief.

I would like to talk about one particular veteran who brought this issue to my attention. Sgt. Wayne Merritt of Dover, New Hampshire served in the Air Force for nearly 14 years until the end of the Cold War, when the Defense Department began to draw down its forces. At DOD's encouragement, Mr. Merritt took a one-time Special Separation Benefit, and then started working in the private sector.

But in 1996, Sgt. Merritt decided to serve his country once again, joining the New Hampshire Air National Guard. When Sgt. Merritt retired in 2006, he became eligible for a pension that provided him and his family with enough to help pay the bills, especially his monthly mortgage payments.

However, just a couple of months ago, Sgt. Merritt had his life turned upside down when he got a letter in the mail from the Defense Department. The letter said that, within a few weeks, DOD would begin recouping his separation benefit by withholding more than half of his pension each month until the full amount is paid back.

Sgt. Merritt was shocked. He planned his family budget around a pension payment he had been receiving each month for nearly 2 years, only to get a letter saying that, in a few weeks, it would be reduced by more than half. Sgt. Merritt suddenly found himself in a position where he couldn't make ends meet and make his mortgage payments. In fact, he was so concerned that he contacted a real estate agent to talk about selling his home.

Sgt. Merritt contacted DOD, asking if there was anything that could be done to work out a manageable monthly payment plan. Sgt. Merritt did not ask for the amount to be forgiven, but simply asked DOD to be flexible and work out a payment plan that he could afford. DOD told him that there was nothing it could do to help, citing a statute that tied its hands.

On behalf of Sgt. Merritt, I contacted DOD and spoke to Undersecretary Robert Hale. He told me that DOD doesn't have a choice-- it must recoup over half of his income because the formula in the statute dictates the rate. The result is that Sgt. Merritt, and over 1,000 veterans in similar situations across the country, face financial hardship as a result of an unfair rule. As each month goes by, DOD has to garnish over half of Sgt. Merritt's pension payments.

I do not believe that Congress intends to treat our Nation's veterans this way. That is why I am introducing legislation today that would provide a simple and straightforward solution. Instead of an unnecessarily harsh formula, our bill will provide DOD with the flexibility it needs to develop manageable monthly payment plans that do not impose undue financial hardship on service members. In addition, DOD would be required to consult with the service member to create a monthly payment plan, taking into account a veteran's financial situation when determining how much should be recouped each month. To make sure these payment plans are manageable, DOD would only be able to recoup, at the most, 25 percent of the veteran's monthly pension check until the benefit is repaid.

This legislation would also address other problems with pension recoupment.

It would provide service members with adequate notice of the recoupment so that they have time to prepare for the loss of income. Sgt. Merritt received his letter just weeks before DOD garnished over half of his pension pay. This legislation ensures that service members have at least 90 days notice before recoupment begins.

Finally, the legislation would also give the Secretary of Defense the flexibility to ensure that no veteran will be left destitute from this recoupment. We need to recognize that financial circumstances change over time. If recouping the benefit would cause a severe financial hardship, the Secretary of Defense should be able to waive that amount.

This legislation is critical. Each month, over 1,000 veterans face circumstances similar to Sgt. Merritt's. Undersecretary Robert Hale told me that while he sympathizes with these veterans, he has no legal recourse to change the amount it recoups every month. This legislation provides DOD with the flexibility it needs to ensure that we do not punish veterans who have made the courageous decision to serve their country again.

I'm glad that this effort has the support of DOD, as well as veterans organizations like the Veterans of Foreign Wars, VFW, and the Military Officers Association of America, MOAA.

I want to thank Senator Gregg for his support of this important, common sense legislation. I also want to thank my fellow New Hampshire delegation member, Carol Shea-Porter, for introducing companion legislation in the House. I urge my colleagues to join me in addressing these important issues.

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

Mr. President, I rise to express my strong support for the Weapons System Acquisition Reform Act, introduced by the two leading military experts in the U.S. Senate today--Senators Carl Levin and John McCain. This rapid passage, after years of delay and inaction, has occurred in part because of the strong support demonstrated by President Obama. The President, in public remarks recently on this issue, reaffirmed his strong commitment to be a wise steward of the American taxpayer's dollars. That commitment to fiscal prudence and wise budgeting must apply equally to the Pentagon as it does any other Cabinet Department. Those who argue that it is acceptable to tolerate some waste

and inefficiency in our military budgets because we are talking about our national security have it wrong. It is precisely because our security is at stake that we must ensure, as Secretary Gates has said, every dollar wasted on cost overruns or inefficient contracting is a dollar that cannot be spent on our men and women in service and making sure they have the right tools to succeed.

Defense acquisition reform is one of those perennial Washington issues that everyone talks about, but nobody ever seems to get around to solving. Many of my colleagues, in the debate over the past 2 days, have cited the GAO report last year chronicling $296 billion in cumulative cost overruns in the 96 major acquisition programs currently maintained by the Pentagon. But I would like to quote from another report:

public confidence in the effectiveness of the defense

acquisition system has been shaken by a spate of ``horror

stories''--overpriced spare parts, test deficiencies, and

cost and schedule overruns. Unwelcome at any time, such

stories are particularly unsettling when the Administration

and Congress are seeking ways to deal with record budget

deficits.

This other report was not published this year or last year. I am quoting from the legendary Packard Report, published in 1986, which offered a scathing indictment of the defense acquisition process. Unfortunately, little seems to have changed in the intervening 23 years, and in some respects, our procurement system has only deteriorated.

Year after year, we hear of cost overruns and schedule delays that cost the American taxpayer billions of dollars. Yet we never seem to muster the political will to tackle the problem and crack down on the systemic flaws that produce these chronic poor results. So I am very pleased that this legislation has moved from introduction to committee markup to final Senate passage in a matter of months--after years of reports and blue ribbon commission of studies emphasizing the need for fundamental reform of the process by which the Pentagon purchases the weapons systems used every day by our brave men and women.

The Levin-McCain bill on the floor today seeks to address key deficiencies in the early stages of the acquisition process for a weapons system, where many of the problems first materialize. The legislation would support the Pentagon's efforts to rebuild its procurement workforce, which has been dismantled over the past fifteen years and contracted out. It would establish an independent office in the Pentagon to assess initial cost estimates provided for weapons systems, to ensure that rose-colored cost predictions are no longer permitted to pass muster. Finally, the bill reinforces so-called Nunn- McCurdy provisions to ensure that programs that go seriously off track are terminated unless there is a compelling reason not to do so.

I was also proud to serve as a cosponsor on a series of important amendments offered by my colleague from Missouri, Senator McCaskill. I applaud the Senator's single-minded determination to root out waste, fraud and abuse in our procurement and contracting systems, and I am very pleased to collaborate with her on these important amendments, all of which have been accepted by voice vote. Briefly, the amendments ensure that our war fighters in the field, as represented by the Combatant Commanders, provide input to the weapons acquisition process; offer an opportunity for the key Pentagon civilian official in charge of acquisition to sign off on all acquisition program decisions made something that oddly does not yet occur on a regular basis; and strengthen safeguards to ensure competitive prototyping for all major weapons systems before final purchase decisions are made.

What matters, at the end of the day, is not just the dollars we save. All of us have a fiduciary responsibility to safeguard the interests of our young men and women who serve our nation. We cannot continue paying excess dollars on out of control weapons acquisition programs while we shortchange our troops on time at home from extended deployments and the full range of benefits they and their families deserve. That is at the heart of why the Levin-McCain acquisition reform legislation must be enacted into law by Memorial Day, as called for by the 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, first of all, let me relay my appreciation to both the chairman and the ranking member for this bill. It does a lot of things that needed to be done for a long time. I would also say it will not do anything unless the President puts in the right person who has the right character; that is, mean as all get out, thorough, and comprehensive in what they are going to do and plans on staying there for a long time.

The other points I wanted to make, and I will be brief--really there are two. I have listened to all of this debate, not necessarily here but from my office. There is one thing that is missing in the debate. We have had the problem with contractors, and there is a problem with the Pentagon. But not once did I hear there is a problem with us.

The real reason we have gotten into trouble to the degree we have is because we have not done the oversight. We have not done our job. So we are seeing a great response now by the leadership of the Armed Services Committee to do some of the right things. But had we been doing our job, much of what we see in terms of failed major procurement systems, lack of transparency, we could have had that transparency had we been doing the oversight.

I will give you an example. Senator Carper and I did the transparency on the C-5 retrofit, and we had a supposed Nunn-McCurdy breach when, in fact, there was not a Nunn-McCurdy breach. The people wanted there to be a Nunn-McCurdy breach. The fact is, we could in fact cut down costs, create transparency, not just with the effects of what this bill is going to do, but if we are much more aggressive.

The last point I will make is that there is no question that the earmarking process hampers us far more than it helps us in the Pentagon. When we see the amount of time that is spent on most projects versus oversight, the American taxpayers are getting shortchanged. They are just getting shortchanged.

I hope people will recognize that although sometimes earmarks turn out to be fantastic, the vast majority of times they do not, and we spend staff time doing that rather than managing what is happening there today.

Our No. 1 charge under the Constitution is the defense of this country, and we do not just spend $500 billion on that or $600 billion. When we add up everything we spend, it comes--if we count nuclear weapons maintenance and we count the research for nuclear warheads, if we count everything that goes through, we are about at $1 trillion. When we add everything else, that comes to that. And we are highly inefficient.

I am very appreciative with what is happening within this bill. But I think the American public ought to recognize that the earmarking process in Congress has hurt the Defense Department because it has taken away from us doing our regular job.

No. 2, Congress has hurt our procurement and our ability to defend ourselves because we are not doing the work we need to be doing, the oversight on a monthly basis on major programs. We cannot depend on IGs and the GAO. We have to ask them: Are you on time? Are you meeting the schedule we need to do this because we are putting one-third of our assets that we expend every year into defense? It is rich. And when we pay out $7, $8 billion for performance contracts that the performance contractor did not make, did not meet the requirements, but we pay it anyhow, we are the ones who allow that to happen.

Finally, the last point I will make: Until we address the revolving door of working in the Pentagon and going to work for a contractor and how that impacts what people do in terms of procurement and major decisions, we are not going to solve this problem. Whether it is an ethical constraint or a positive statement of principles, somehow we have to address that issue because we cannot blame the people who are looking for their next job to be less than perfectly independent in this job if, in fact, it is going to affect their future.

So we have not addressed that in this bill, but that is still one of the things that has to be addressed because it is problematic not only in terms of how well we do but what we get for what we actually pay out.

Again, I thank the chairman and ranking member. I appreciate their work. I appreciate them taking our amendment. My hope is that when we combine what we have put forward with a--I cannot use the word I want to use on the Senate floor--but someone of significantly tough demeanor to ramrod this through there, that, in fact, we will see great savings, better performance, and better procurement for the American taxpayers.

I yield the floor.

Mr. President, today I introduce the Immunization Improvement Act of 2009. The recent outbreak of H1N1 influenza makes this legislation timelier than ever before. While a vaccine has not yet been developed to protect us against this flu strain, one is currently in the works. This outbreak is a reminder of the important role that immunizations provide in protecting us against harmful or even deadly viruses, like the measles, polio, and seasonal human influenza.

Vaccinations have been proven to be clinically effective in improving health, and providing population-based immunity. Routine childhood immunizations, for example, prevent over 14 million individual cases of disease and over 33,500 deaths over the lifetime of children born in any given year.

However, significant and persistent gaps in public and private health insurance coverage of immunizations remain. Approximately 11 percent of young children and 21 percent of adolescents are underinsured for immunizations. Nearly 2/3 of adults are underinsured for immunizations--17 percent are uninsured. Each year, vaccine-preventable diseases cause the deaths of more than 42,000 people and hundreds of thousands of cases of illness.

Congress will soon embark upon meaningful health care reform. This debate will provide the opportunity for us to eliminate the obstacles-- lack of insurance and high cost-sharing--to accessing routine immunizations. We must shift to a system that will make routine preventive care, like immunizations, affordable.

In fact, it is in the best interest of Government and society to ensure coverage of routine vaccinations, as these preventive vaccinations currently result in an annual cost savings of $10 billion in direct medical costs and over $40 billion in indirect societal costs.

Expanding immunization coverage will enhance these savings over the long term.

The Immunization Improvement Act would remove barriers to immunization. First, it would enable states to access routine vaccinations for adults at a discount negotiated by the Federal Government. Currently, 36 States and New York City are able to buy vaccines using the Federal discount, but these contracts are about to expire. The Immunization Improvement Act would ensure that states can continue to purchase adult vaccines under CDC contracts. It would also provide for Medicaid coverage of adult immunizations that are recommended for routine use and prohibit any cost-sharing for them.

There are a host of routinely recommended vaccinations for the Medicare population, as well. Unfortunately, Medicare Part B only covers influenza, pneumonia, and hepatitis B vaccines. Medicare beneficiaries are eligible for additional vaccines that are covered by Part D, but few of these vaccines are covered by prescription drug plans. Moreover, physicians have difficulties billing plans for the incurred costs. As such, the Medicare Payment Advisory Commission, MedPAC, has recommended that all immunizations recommended for routine use among the Medicare population be covered under Part B. The Immunization Improvement Act would codify that recommendation.

Inadequate reimbursement for administering immunizations also prevents children, adolescents, and adults from receiving necessary vaccinations. According to the National Vaccine Advisory Committee, the Centers for Medicare and Medicaid Services, CMS, and CDC should review and update the maximum allowable fees for administering routine vaccinations, and publish and update the actual fees for vaccination administration paid by each State--in an effort to encourage consistency across state lines. This legislation would also reimburse providers for administering vaccines to children who are eligible for vaccination through the Vaccines for Children program, but not Medicaid. This would enable both uninsured and underinsured children to become vaccinated in an effort to get all children vaccinated.

Finally, as we look to reform our health care system, we must also hold private health insurers accountable for covering vaccinations recommended for routine use--without any cost-sharing. The Immunization Improvement Act would require this coverage upon the enactment of health reform.

Given the current circumstances, it is evident that vaccinations can and truly do eradicate the spread of preventable diseases. However, we must do more to ensure comprehensive coverage of immunizations. It is my hope that my colleagues will join me in supporting this legislation.

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

Mr. President, S. 454, the Weapon Systems Acquisition Reform Act of 2009, is important legislation to improve the organization and procedures of the Department of Defense for the acquisition of major weapons systems and other major defense systems. Chairman Levin and

Ranking Member McCain are to be congratulated for reporting this bill from their committee with strong bipartisan support.

As my colleagues know, many of our most important, and costly, national intelligence programs are acquired by intelligence community agencies that are found within the Department of Defense. Like the Senate Armed Services Committee, the Select Committee on Intelligence, where the chairman and ranking member of the Armed Services Committee sit as ex officio members, has been concerned for many years about the need to improve the intelligence acquisition process and its oversight in order to ensure we are making maximum best use of intelligence resources.

The Congress looks to the Director of National Intelligence to manage and be accountable for major systems acquisitions funded by the National Intelligence Program, NIP, even though these acquisitions are executed in other departments and agencies of the Federal Government. While many of us have had concerns about the implementation of the Intelligence Reform and Terrorism Prevention Act, IRPTA, of 2004, the creation of the Office of the Director of National Intelligence, DNI, and the establishment of the roles and responsibilities of that office were important accomplishments that we on the Intelligence Committee wish to see strengthened through robust implementation of the provisions of that act.

The Intelligence Reform and Terrorism Prevention Act gave the DNI broad acquisition authorities over the NIP, but for NIP programs conducted within the DOD, the act required that the DNI and the Secretary of Defense share these authorities. Specifically, the act required: ``For each intelligence program within the National Intelligence Program for the acquisition of a major system, the Director of National Intelligence shall . . . serve as exclusive milestone decision authority, except that with respect to the Department of Defense programs the Director shall serve as milestone decision authority jointly with the Secretary of Defense or the designee of the Secretary.''

Subsequently, Director of National Intelligence Michael McConnell and Secretary of Defense Robert Gates agreed in a memorandum of agreement, MOA, signed in March 2008 that this joint milestone decision authority would be extended to majority NIP-funded acquisition programs as well. They agreed that wholly and majority NIP-funded acquisition programs would be executed according to intelligence community acquisition policy. The MOA states that its purpose is to provide for ``a single acquisition process'' for programs covered by it. I am sure that we will all agree, as the DNI and the Secretary of Defense have done, that it is vitally important that these important intelligence acquisitions be governed by a clear process with clear lines of responsibility as provided for by the MOA.

The MOA of the DNI and Secretary of Defense was later implemented in DOD Instruction No. 5000.2 on December 8, 2008.

It should also be pointed out that in fact wholly and majority NIP- funded major system acquisitions executed in accordance with intelligence community acquisition policies are now usually deemed to be ``highly sensitive classified programs'' under title 10 U.S.C. 2430

Because S. 454 would cover all ``major defense acquisition programs'' within the meaning of title 10 U.S.C. 2430, not just major weapons systems, I appreciate Chairman Levin agreeing to this colloquy to clarify the impact of the legislation on NIP-funded acquisition programs executed within the Department of Defense.

Mr. Chairman, is it the case that S. 454 would not extend DOD's jurisdiction to any programs over which it does not already have authority and that to the extent that NIP programs are outside the DOD acquisition system today, they would not be brought into the DOD acquisition system by this bill?

Mr. Chairman, do you further agree that this bill is not intended to change the DNI's roles and responsibilities under the Intelligence Reform and Terrorism Protection Act of 2004 or to require revision of the March 2008 memorandum of agreement between the DNI and Secretary of Defense concerning NIP-funded acquisition programs?

I thank the distinguished chairman of the Armed Services Committee and manager of this bill.

Madam President, I voted in favor of the Weapon Systems Acquisition Reform Act of 2009 but I am disappointed that it does not include key reforms of our defense procurement system. While President Obama and leaders in Congress deserve credit for beginning to address the longstanding problem of wasteful and abusive defense contracting, we need to go further.

Secretary Gates has stated that we ``must consistently demonstrate the commitment and leadership to stop programs that significantly exceed their budget or which spend limited tax dollars to buy more capability than the nation needs.'' Unfortunately, this bill falls short in this regard. It permits programs to continue even if they have experienced cost growth of over 25 percent. GAO has found that 42 percent of our programs have experienced cost growth and that, due in part to such cost overruns, we have scaled back the number of weapons we are buying in 10 major programs by 30 percent. Congress's failure to make tough choices and restructure troubled programs is therefore having a direct impact on our ability to deliver sufficient quantities to our fighting forces.

Secretary Gates has also stated that ``we must ensure that requirements are reasonable and technology is adequately mature to allow the department to successfully execute the programs.'' This bill encourages such reforms, but unfortunately does not require them. For example, it requires additional reporting on the Department's reliance on immature, risky technologies but does not prohibit the Department from purchasing such equipment. GAO reported this year that of 40 programs that it has reviewed, the Department will decide to move to the production of nearly a fourth of them without requiring realistic testing of their critical technologies.

No company would buy a plane before they have flown it. I don't know why it should be any different for the U.S. Armed Forces. Indeed, given that our brave men and women in uniform are relying on these weapons systems, stricter standards should be enforced.

Unfortunately, these are not new issues. I first objected to inadequate testing of weapons systems in 1998 when the Navy sought to rush the F-18 through its tests, notwithstanding the fact that preliminary tests had discovered serious problems in the aircraft. I am disappointed that a decade has passed and we are still seeing the same problems over and over again.

I suggested that we should require higher level review of alternative acquisition strategies before purchasing systems that have not been tested in a realistic environment but was informed that this would be too strict of a requirement. While I am pleased that the committee at least accepted an amendment I cosponsored that will ensure that annual reports to the Congress identify programs moving into production without undergoing adequate testing, this is just a start.

Secretary Gates demonstrated his commitment to fixing these problems when he recommended the cancellation of several programs that were over budget, were behind schedule, relied on immature technologies and were designed to combat a military-peer that does not exist. GAO had been reporting that these systems were in trouble for several years. If these systems had been restructured when it first became obvious that they were unnecessary and unrealistic, it would have saved the government tens of billions of dollars and sped up our efforts to replace our aging weapons systems.

It is my hope that Congress will eventually forgo the parochial interests that have prevented it from making the tough choices that need to be made and stop repeating the same mistakes of the past. I will continue to work with my colleagues until we have achieved this goal.

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

The following Senator is necessarily absent: the Senator from Missouri (Mr. Bond).

Madam President, the bill we passed contains provisions that I support and others that I oppose. I want to indicate why I voted aye. In the end, I think it is critical for Congress to increase the FDIC's borrowing authority to reduce a costly special assessment that the FDIC intends to impose on distressed banks, and therefore I supported the bill.

Over the last 2 years the FDIC has had to take over 41 different failed depository institutions and in the process has depleted its insurance fund. At its current level, the FDIC is required by law to increase its insurance premiums on banks to recapitalize the fund. However, increasing banks' costs now would only worsen the current recession.

Congress can reduce the size of this assessment by 50 percent if it increases the FDIC's borrowing authority from $30 billion to $100 billion. Doing so will help banks hold onto capital that they can use to absorb future losses and make it through these difficult economic conditions.

Unfortunately, this bill would increase the FDIC's borrowing authority at the same time that it would expand the HOPE for Homeowners Program--a $300 billion program designed to allow up to 400,000 borrowers to refinance into an FHA-backed loan. The FHA mortgage program has exploded with the decline of the subprime industry as borrowers have flocked to the Government program. FHA loans are attractive due to the high loan limits--up to $729,250 in high cost areas--and only a 3.5-percent downpayment requirement. According to Inside Mortgage Finance, the FHA's market e jumped to nearly a third of all mortgages in the fourth quarter of 2008 from about 2 percent in early 2006.

At the same time, FHA mortgage defaults have increased sharply and are diminishing the FHA's reserve fund. Roughly 7.5 percent of FHA loans were seriously delinquent at the end of February, up from 6.2 percent a year earlier. The FHA's reserve fund fell to about 3 percent of its mortgage portfolio in fiscal year 2008, down from 6.4 percent in the previous year. By law, the reserve fund must remain above 2 percent. Recently, HUD Secretary Shaun Donovan told a Senate Appropriations subcommittee that he did not know whether the FHA would be able to continue to pay its obligations. Many believe that Congress will have to inject additional funding into the FHA.

The HOPE for Homeowners Program will sunset in 2011. I expect the Obama administration to do everything in its power to guarantee the solvency of the FHA mortgage program and will be watching how the Secretary of HUD implements HOPE the for Homeowners Program.

In the end, I believe the broader economy would benefit from an increase in the FDIC's borrowing authority. We cannot recover from this economic downturn until banks have the capital to lend freely to all borrowers. Therefore, I voted for S. 896 despite some reservations that I have with other provisions in the bill.