Debit Interchange Fee Study Act of 2011

Madam President, I rise to speak about the issue of swipe fees. Most people do not know what a swipe fee is, but it is almost part of your daily life. The next time you reach into your wallet or purse and pull out a piece of plastic to pay for something--such as my debit card--and present it at a retailer or a restaurant or a hotel or a gas station, understand what is happening in that transaction. There are several things that are not even visible.

What is happening in that transaction is, you are paying that merchant and your bank is going to honor that payment from your account on your debit card, but then the bank and credit card company are going to charge the merchant for the transaction.

In days gone by, if we paid in cash, obviously, there was no fee involved. If we paid with a check--which was done for a long time and is done less and less now--there were pennies charged to process the check. Whether the face amount of the check was $1 or $100--pennies to process the piece of paper through the system.

A much more efficient system is being used with debit cards, where we actually are withdrawing money from our own account to the credit of the restaurant or the retailer. Unfortunately, there is a fee involved charged to the merchant or retailer called the swipe fee--accurately called the swipe fee because what has happened is, these major companies--Visa and MasterCard and the banks that issue their cards-- have established how much each transaction will pay in this swipe fee or interchange fee.

The Federal Reserve recently did an analysis and found something interesting: They found that the average swipe fee across America is 44 cents for each transaction. Then they said: Well, what does it actually cost to process this debit account movement of money from one place to another? The answer was: 10 cents or less.

So there is a substantial charge involved in the hundreds, thousands, tens of thousands, millions of transactions that go on every single day, and it has a direct impact on the places where we do business. It means there is an added cost to the retailer or merchant that we are doing business with for the use of the debit card that goes beyond the actual cost to the bank involved.

You say to yourself: Well, that is business, isn't it? If you are going to take these cards, and you want the convenience of using these cards, you have obviously negotiated 44 cents and that is the way it goes. Wrong. There is no negotiation involved. The retailers and merchants literally have no bargaining power in what that fee will be, and over the years, that swipe fee, or interchange fee, has been creeping higher and higher. For many businesses across America, it is the second or third most expensive item in doing business. That is right. Beyond the cost of personnel and workers and beyond the rental and utilities paid or health insurance comes the swipe fee--the fees charged by credit card companies for the use of debit cards and credit cards.

What we said last year, while we were debating financial reform, was, this price fixing by the credit card companies--and there are two giants, Visa and MasterCard, that control 80 percent of the card transactions in America--this swipe fee that is being charged by them should be reasonable and proportional to the actual cost of the transaction. They should not be able to force feed and price fix an excessive swipe fee, or interchange fee, on retailers and merchants across America.

We said to the Federal Reserve: Take a look at this and try to figure out a way to establish a reasonable, proportional fee since the credit card companies and the big banks are not going to negotiate. The Fed is in the process of doing it.

We also said any bank or credit union with less than $10 billion in assets will not be affected by this. Our object was to make sure the hometown banks, the local banks, the local credit unions, could continue to receive interchange fees without any type of oversight by the Federal Government. Some people said: Why didn't you include them? Well, we tried to give them an opportunity to continue to do business because, frankly, those who are closest in the communities are the ones we ought to be mindful of and protective of.

Perhaps I have a little prejudice involved too. The biggest banks in America--the top 1 percent of banks in America--are the ones that do almost 60 percent of this card business. I am talking about the same Wall Street banks that ended up getting a bailout from the Federal Government, to the tune of hundreds of billions of dollars. I do not have a lot of sympathy for them. They made some stupid mistakes and the taxpayers came to their rescue. From my point of view, we should not be subsidizing them or creating an opportunity for them to fix prices when it comes to merchants and retailers across America.

This passed last year with a strong bipartisan vote of 64 Senators, and the biggest banks in America and the biggest credit card companies in America have been working nonstop ever since to stop this from going into effect. They have poured more resources into this effort than I have ever seen, and I have been around this place for a while. They want to stop this because they hate swipe fee reform like the devil hates holy water. For them, it is a dramatic loss of money. How much? Each month--each month in America--these debit swipe fees generate $1.3 billion--$1.3 billion--for the banks at the expense of merchants and small businesses and large businesses, too, for that matter, across America. But not just at their expense. These swipe fees are being paid every time a person uses a debit card or a credit card to pay the government, to pay a university, to make a charitable contribution. That is a reality, and $1.3 billion a month--most of it going to the biggest banks in America--they believe is worth fighting for.

So the fight has been joined, and Senators have come to the floor and submitted an amendment to postpone this swipe fee reform for 2 years--2 years--to study it. Let me see, 24 months times $1.3 billion--over $30 billion they want in a handout to the biggest banks and credit card companies in America. I do not think that is fair. It is sure not fair to the small businesses that had asked me to introduce this and ask me to continue to fight for it. It is not fair to these businesses or their customers.

You see, our reform efforts are not just supported by the businesses. They are supported by the Consumer Federation of America, the largest consumer advocacy group in the United States. They understand that if you are dealing with a competitive business--let's assume you have gas stations across the street from one another and you make more profitability at one gas station, they can lower prices and be more competitive with the gas station across the street. The same is not true when it comes to big banks and credit cards. When it comes to credit cards, we have not a monopoly but a duopoly--two monopolistic companies, very little competition between them. There is a lot of competition in small town America and Main Street America.

Some people ask me why I tackle some of these issues that involve the big banks and credit card companies and others. They say: Don't you understand these operations you are fighting are pretty large in terms of their resources and their political might? There is truth in that. The banks are a $13 trillion industry in America, according to the American Bankers Association--$13 trillion--and last year the banking industry in America made over $87 billion in profits.

Visa and MasterCard were spun off from big banks a few years ago and now are multibillion-dollar companies that control nearly 80 percent of the payment card market.

People tell me these financial industry giants have unlimited resources,

and they are going to fight when there is $1 billion a month on the table.

Well I do not think the people of Illinois sent me--or sent from their own States other Senators--to hand the keys of this country over to big banks and credit card companies. They sent me to make sure Wall Street banks follow the same rules of the road that Main Street businesses follow every single day.

There is nothing wrong with fees charged for services provided, as long as those fees are transparent and are set in a competitive market environment. Don't tell me you are for a free market and then say but Visa and MasterCard can fix prices. Don't tell me you are for a free market and then say those prices they fix have to be concealed and hidden from the public.

When markets are characterized by transparency, competition, and choice, consumers benefit. But consumers do not benefit when fees are hidden, changed without warning or set by agreement between competitors. Sadly, that describes many of the fees banks and card companies have charged in recent years.

We passed the Credit CARD Act of 2009 and then the Dodd-Frank Wall Street Reform Act last year and the Consumer Financial Protection Act was also included. We targeted many of the hidden fees consumers pay in America. If we do not do it, ladies and gentlemen, if the Senate does not do it, I would say to my colleagues: It will not be done.

These powerful economic business entities in America need to be watched closely. Do not take my word for it. Take the word of those who analyze the recession which we are dealing with. Left to their own devices, these entities will go to extremes when it comes to profit taking, and that is what is happening when it comes to these big banks and credit card companies today. If we do not stand for consumers and small businesses on the floor of the Senate, shame on us. Who else is going to do it?

By making fees transparent and helping to inform consumers, our laws will help the financial services market work better for all Americans.

This swipe fee, or interchange fee, reform amendment I added to the Dodd-Frank bill also addressed an anticompetitive market failure in the debit card system. For years, the banking industry has engaged in a collusive practice. The banks that issue the cards have let Visa and MasterCard fix the interchange fee rates banks receive from merchants every time a debit card is swiped. The banks get the fees, but they do not set the fees. Their friends at Visa and MasterCard set the fees that will be charged. This is price fixing, purely and simply, by Visa and MasterCard on behalf of thousands of banks, and this price fixing is currently unregulated.

Of course, every bank in the country is going to tell us the interchange system is working just fine, Senator. That is because with centrally fixed interchange rates, banks do not have to worry about competition. Each bank knows the bank down the street is getting the same fee they are. But there are two fundamental problems with Visa's and MasterCard's fixing of these interchange rates and swipe fees.

First, centralized rate fixing gives the card-issuing banks no incentive to manage their operational and fraud costs efficiently. All banks in the Visa network are guaranteed the same Visa price-fixed interchange rate whether they are efficient or not. There is no competition and the fees literally subsidize inefficiency.

Second, because Visa and MasterCard, the credit card giants, control nearly 80 percent of the debit card market and merchants can't realistically refuse to accept them, Visa and MasterCard have the incentive to constantly raise interchange rates to encourage banks to issue more of their cards. So fee rates keep going up and the merchants are helpless to do anything about it.

I have heard so many speeches on the floor of the Senate about how we love our small business, and we should. It is the backbone of the economy of America. This interchange fee goes to the basic survival of small businesses across America. If this Senate is going to decide that it is more important to protect the big banks and credit card companies than small businesses, shame on us. We should accept the reality that it means these small businesses will struggle, will not be as profitable, will not hire as many people. Can that make us a better country? Can that help us out of the recession?

Merchants can't say no to Visa and MasterCard because of the market power of these two credit card giants and because swipe fee rates are fixed by the networks. A merchant doesn't even have the option of negotiating a better deal, so merchants are stuck with whatever the increase is in swipe fees, which is then passed along to consumers in the form of higher prices for gasoline and groceries. Consumers, and particularly low-income and unbanked consumers, pay for the debit interchange system to the tune of $16 billion a year.

Incidentally, do my colleagues know what the interchange fee is in Canada charged by Visa and MasterCard--the same fee I have been talking about here--through the banks in Canada? Zero. There is no interchange fee. Do my colleagues know what it is in Europe? A fraction of what it is in the United States. Why is that the case? Why would these credit card giants say they can't survive oversight of their interchange fees in the United States and charge zero in Canada and pennies in Europe? Because the Canadian Government came to them and said, We are not going to let you rip off our small businesses. We will regulate you. They said, Never mind, we won't charge an interchange fee in Canada. In Europe, the same thing happened. If we are silent, exactly the opposite will occur. The credit card companies will continue to increase these fees at the expense of American consumers and small businesses and large businesses alike.

Some people out there apparently trust Visa and MasterCard to price fix in a fair and benevolent way. They don't see the need for reform. If you believe the giant credit card networks can be trusted to fix interchange prices in a way that is fair for banks, merchants, and consumers, then you should be fine with the status quo and have no problem prolonging it for years.

That is exactly what the amendment coming before us will do. It will postpone for 2 years and put in a study of this issue. Well, we should study things before we act on them, that is for sure. But let's look at the record. We have had nine different congressional hearings on this issue and three separate studies already. We have studied this one to death. What the banks and credit card companies want us to do is to keep on studying so they can collect $1.3 billion every single month. That is their strategy.

I don't place my trust in Visa and MasterCard, and I am not alone. Last year, a strong bipartisan majority in Congress said we better stand up for small business and retailers and consumers, and we passed this law. The banks and credit card companies are pulling out all the stops. I learned yesterday that Chase, which is one of the major issuers of these debit cards across America, sent a letter to their customers in a number of States and said, If you don't repeal the Durbin amendment, we are going to end up in a position where we won't be able to give you all of the rewards which we are offering you on your debit and credit card.

First, this relates to debit cards which don't carry the big reward programs. Secondly, this kind of veiled threat from these credit card companies should not be taken seriously by any consumer across America.

The last time we had credit card reform, we unfortunately waited months before it became law. The credit card companies saw it coming. So what did they do? They dramatically raised their interest rates on consumers across America during that period of time. Don't expect any favors from this industry. If we do not regulate the credit card industry and the banks that issue these cards, trust me, the consumers will continue to lose time and time again.

As for Chase, I don't think there are going to be any poppy flowers sold on their behalf on street corners. If I recall correctly, their last earnings report showed a 48-percent increase in profits over their previous year. They are doing quite well. Now it is time for

them to give small businesses and consumers across America a break when it comes to the fees they are charging.

Congress said that if banks are going to let Visa and MasterCard fix the interchange rates that merchants pay banks, then the rates fixed on behalf of the biggest 1 percent of banks must be reasonable and proportional--reasonable and proportional. This is a narrowly targeted reform through the Federal Reserve. The new law will provide a constraint on ever-rising interchange fees that the current broken market does not provide.

We have given this job to the Federal Reserve. They have put out draft rulemaking and they are soliciting comments across the country. Chairman Bernanke called me a couple of days ago and said they needed an additional few weeks to come up with the rule that will still go into effect in July of this year. I understand that. I want him to do his best. I want him to follow what this law says--exempting credit unions and community banks with less than $10 billion in assets.

The Fed has taken this job seriously, and I am glad they have. The Fed knows that many small banks are concerned the reform might affect them even though the law clearly exempts them. Last week Chairman Bernanke told all those small banks at a meeting that he understands their concerns and will work with them to make sure the final rule addresses them.

I urge my colleagues to stand up for the reasonable reform Congress passed last year. We don't need another study. A study is an excuse for the credit card companies and the biggest banks in America to take $1.3 billion a month out of the economy and away from small businesses.

I want my colleagues to know there is broad support for debit interchange reform. I have received many letters in recent days from individuals, small businesses, and organizations that support reform. I will readily concede that the big box retailers are also benefitted by this. I am not trying to hide that. That is a fact. But the simple fact of the matter is this has been generated by a lot of local people and a lot of local businesses.

Let me tell my colleagues, this is hardball as far as the big banks and credit card companies are concerned. I happened to mention that I was brought to this issue 4 or 5 years ago by a good friend of mine, a very conservative gentleman who has been very successful in downstate Illinois, named Rich Niemann from Quincy, IL. He owns a bunch of grocery stores and has expanded all across the Midwest. He is a hard- working guy the like of which is hard to find. He and I disagree on a lot of things, but I always turn to him when I have a business issue because I know he will give me an honest analysis. When Rich told me that he started accepting plastic at his grocery stores, it went from just a small number of transactions to now almost half of the transactions at his grocery stores are with plastic and he says, They are killing me with this interchange fee. The credit card companies and debit card companies are charging him this fee and he has no voice or bargain in the process. They charge whatever they want to charge and he pays it. He is a man who is trying to create jobs in small-town America. I thought he had the right approach to this. They should be able to recover their reasonable, proportional costs for using a debit card, but why should they be able to penalize a business such as Rich Niemann's grocery stores? I said this publicly a couple of days ago and, not surprisingly, some folks on the other side decided to go after and attack Rich Niemann as a businessman. I will stand with him. From my point of view, he is a good man. I don't think he votes for a lot of Democrats. I hope once in a while he might vote for me, but notwithstanding that, I respect him so much and I am sorry he had to take this beating in the press from the other side. He can take it, though. He has been a tough guy who has stood up for his family and his business all his life.

Incidentally, on March 18 I received a letter from the American Council on Education and nine other national associations representing colleges and universities and here is what they said:

Debit card swipe fees have been a hidden expense for

students and families paying for college for which they

receive no benefit. As a result of the law enacted last year

and the Federal Reserve's proposed rule, we believe colleges

and universities will see reduced debit card costs which they

will be able to pass on to students through lower costs as

well as increased resources for institutional grant aid and

student services.

We don't think about that. We think about gas stations. But the fact is students use plastic for everything, and the universities and colleges end up paying these swipe fees to the big banks and the credit card companies and debit card companies as a result.

On March 15 I got a letter from the Consumer Federation of America. Some of the folks on the other side said this will never help consumers. These businesses are going to take all the savings that would otherwise go to the big banks and credit card companies and they are going to take those and go home. Well, I disagree, and so does the Consumer Federation of America, the leading consumer advocate in this country. Here is what they said on March 15:

The current interchange system is uncompetitive,

nontransparent, and harmful to consumers . . . CFA does not

support delaying implementation of the new law.

That is what the amendment on the floor today suggests.

On March 15 I received a letter from the consumer groups Public Citizen and U.S. PIRG, and here is what they said:

The Durbin amendment was designed to curb anticompetitive

practices in the payment card market . . . we do not support

legislation calling for delay of the Durbin swipe fee

amendment.

Yesterday I received a letter from Americans for Financial Reform, a coalition of over 250 national, State, and local groups, including consumer, civil rights, investor, retiree, labor, religious, and business groups. Here is what they said:

From a consumer point of view, the current interchange

system is not defensible. Feeble competition in the payment

card marketplace has led to unjustifiably high debit

interchange fees that the poorest Americans, generally cash

customers, are required to subsidize at the store and at the

pump. . . . We oppose efforts to delay the implementation of

the Durbin amendment through Congressional action.

Make no mistake, the big banks and card companies want to stop this rule before it is issued, because they are afraid that once it is issued and once people realize the savings to business and consumers across America, they will never go back. So they are pouring it on to try to move this amendment as quickly as possible to stop the Federal Reserve from issuing the rule which the law requires them to issue.

On March 17, the Hispanic Institute sent me a letter and here is what they said:

Sixteen countries and the European Union regulate swipe

fees and their experience demonstrates that regulation

benefits consumers in lower fees and lower cost of goods.

There is no evidence that swipe fee regulation will lead to

an increase in other consumer fees.

The National Small Business Association--as I said, we spend more time on the Senate floor venerating small businesses than almost anything other than our troops. Here is what the National Small Business Association said in a statement on March 23:

The Durbin amendment and the proposed Fed rule are

beneficial to America's small businesses. Further delay,

equivocation, and another big-bank handout are not.

I also received a letter from 185 national and State merchant trade associations representing 2.7 million stores and 50 million employees.

Let me say at the outset, the coalition I am representing is not nearly as powerful or as large politically as the big banks and the credit card companies. They can't match them in terms of their political power, the number of lobbyists they hire, the number of letters they send, and all the rest. For the most part, they represent a lot of small businesses that are trying their best to get fair treatment. Here is what they say:

We have repeatedly sought to negotiate with the card

companies to reform this broken market and bring savings to

our customers. Fifteen years later, we have concluded that

normal market forces cannot and do not work in a broken

market with price-fixing among banks controlled by a duopoly.

They mean Visa and MasterCard.

They urged Congress to oppose any efforts to delay swipe fee reform.

The United Food and Commercial Workers, a union which I used to belong to when I was growing up, said:

Delaying swipe fee reform will also delay the creation of

thousands of jobs each year that will result in reduced

interchange fees. This reform is long overdue for working

Americans everywhere.

The National Community Pharmacists Association and the National Association of Chain Drug Stores sent me a letter and said:

We request any assistance you can provide in ensuring the

timely completion of the final regulations and enforcement of

the Durbin amendment.

The National Association of College Stores and 20 State associations wrote and said:

Credit and debit purchases account for more than $100

million annually in interchange fees paid by college

bookstores and their student and parent customers.

Let me repeat: $100 million a year paid by college bookstores and their student and parent customers in interchange fees to the banks and credit card companies.

They go on to say:

Excessive swipe fees that would otherwise be returned to

students through lower prices, grants, and student services

are being misdirected toward credit card companies and large

banks. . . . Every month of delay means higher costs for

students and parents at a time when schools are being asked

to do more with less funding.

I ask unanimous consent that these letters be printed in the Record.

In closing, I know what I am up against. Don't take on Chase and all the big banks of America--the ones that have the lion's share of these debit cards--and Visa and MasterCard and not get suited up for battle. This is a darn important battle. It will test beyond the wisdom or justice of this proposal; it is going to test who owns the United States Senate. Is this a Senate that is willing to stand up for small business across America? Is this a Senate that is willing to say we will fight for consumers even at the expense of the profits of the banks and credit card companies?

I think consumers across America know on which side we should be. I hope we will be. We were last year, with 64 Senators, Democrats and Republicans, joining to stand up for small businesses and large businesses alike, retailers and merchants. I know the big banks and credit card companies have enormous resources, and they have a reach in every direction. I know they are running commercials and sending an army of lobbyists to Capitol Hill. They also have allies in the Senate. They will pull out all the stops to roll back any effort to curb their abusive practices.

I want my colleagues to know I think Main Street is worth standing up for--certainly, when it comes to their fights with Wall Street. Small businesses, consumers, universities, labor unions, and merchants are sick and tired of the banking industry's tricks, traps, and hidden fees. They want fees they can see, and they want them set up in competition, not fixed by credit card companies. They want the Wall Street banks to play by the same rules of the road that the Main Street businesses play by every day, and I want that too. I hope the Senate does as well.

I urge my colleagues not to let the big banks and credit card companies avoid accountability for 2 more years. In the name of a study, do not give a $30 billion handout to the biggest banks and credit card companies in America. That is exactly what the amendment filed on the Senate floor will do. Do not delay interchange reform. Do not delay swipe fee reform. Don't give those banks another multibillion-dollar handout with no strings attached.

I urge my colleagues to let the Federal Reserve do the job that was sent their way. Let them move forward with the important process of swipe fee reform.

On behalf of businesses and merchants all across America, they are counting on the Senate to be on their side to help them in reaching profitability and making sure their savings are passed along to consumers and in being the No. 1 engine for the creation of new jobs in America. Our question

is, Whose side are you on? I am on the side of small business and Main Street. I hope my colleagues will be as well.

I yield the floor.

Madam President, I will yield to the Senator from Rhode Island, and then I will make my statement.

Madam President, well, I want to thank Senator Reed for his comments. Senator Reed is one of the leaders on the Banking Committee. I appreciate his comments.

I do want to set the record straight on a couple of things though. It is not a 12-month delay plus a 6-month study. It is a 6-month study and then implementation of the rules.

The Senator said Chairman Bernanke had plenty of information. The problem is he does not have much information from community banks and credit unions, and that is what this amendment is about.

The exemption that is in the amendment that we passed last year, called the Durbin amendment, every regulator at the Federal and State level has said they cannot make the exemption work because market forces will determine where the customers flow.

I am glad we are here to vote on the amendment that Senator Corker and Senator Hagan, Senator Crapo, Senator Bennet, and I have worked so hard on. This afternoon we are finally going to have an opportunity to vote for an amendment that has been crafted in the right way.

Senators Hagan and Crapo and Bennet came to Senator Corker and I about a month ago to share their interests in fixing the unintended consequences of that amendment that was passed in the Senate about a year ago. The amendment directed the Federal Reserve to issue regulations limiting the cost that banks can charge retailers when consumers use their debit cards to buy things. Based on the law, the Fed intends to limit those costs to 12 cents, even though the actual costs of these transactions may be higher.

The big Wall Street banks can handle that. They are not happy about it, but they can live with it. They have plenty of tools that will help them make up the difference. The Main Street community banks and credit unions are a different story. These small guys, who had nothing to do with the financial crisis, do not have that same flexibility the Wall Street banks have. These are the banks in Montana. These are the folks I want to make sure have a fair shake. So folks from both parties came together and said: How can I fix this to make this protect the local banks and credit unions since the original amendment does not?

Senator Corker and I suggested initially a 2-year delay, a study, and then more legislating to fix any problems that were identified in the study. The Senators who are here today with me thought we could do better, and we could, and we did. After talking with our colleagues, we worked together to reduce the study period down to, as I said earlier, 6 months.

At that point the Fed and other regulators will decide if the rules can adequately prevent the small banks from getting hurt. I do not know what the study is going to find, and I do not think anybody knows. If the agencies find that the rules consider all costs, that consumers would not be harmed, and that the small issuer exemption--those that apply to credit unions and community banks--if that exemption will work, then the pending rules would move forward as passed. I would be the first person in line to tell Senator Durbin that he was right about the two-tiered system.

But if the Fed and the other regulators find that the changes must be made to ensure that current rules do not include all costs or that small banks and credit unions and consumers might be harmed, then they will have to issue new rules within 6 months, and every 2 years the Fed would have to tell us in Congress whether these rules are still working for the small banks and credit unions.

That is all we are asking. Before the Fed's new rules get implemented, let's make sure we have them correct. Yesterday the good Senator from Illinois said this was not truly a compromise. But when you sit down with folks who think you are on the wrong track and you work together to find the middle ground, well, to me that is the definition of compromise.

Some other charges have been made about this amendment, and I would like to take a moment to discuss those. Some say it is a favor to the big banks. Well, it is not. In fact, this amendment corrects a very big problem that only affects the community banks and credit unions. The good Senator from Illinois said yesterday that he crafted this amendment with awareness that a major reduction in interchange fees would kill small banks and credit unions.

No one denies that small banks and credit unions would be deeply harmed if they are forced into a system where they can only charge 12 cents per transaction. No one denies that. This is why Senator Durbin tried to establish a two-tiered system. Under his proposal, big banks, the Wall Street banks, could charge one rate, 12 cents per transaction.

The small banks, the community banks, credit unions, could continue to charge a percentage of a transaction, 44 cents on average. But there is a big flaw in the plan. The two-tiered system simply will not work. Let me repeat that. The two-tiered system simply will not work. I did not make that up. Here is what the Chairman of the Federal Reserve said:

It is possible that the merchants will reject the more

expensive cards from smaller institutions, or because

networks will not be willing to differentiate the interchange

fee for issuers of different size. It is possible that the

exemption will not be effective in the marketplace.

That was Ben Bernanke saying that. He went on to say that because the exemption will not be effective, small banks could be hurt or even fail. Here is what the head of the FDIC said:

The likelihood of this hurting community banks and

requiring them to increase the fees that they charge for

accounts is much greater than any tiny benefit that the

retail customer may get.

Again, everyone agrees if the Fed's rules go into effect, the small banks and credit unions will suffer because the exemption simply will not work. So today we can stop and doublecheck to make sure that does not happen or we can just flip a coin and hope for the best and watch as more small banks and credit unions fail, reducing consumer choice and reducing banking options, especially as they currently exist in rural America.

These small banks and credit unions are the ones that make the loans to small businesses in rural America. They are in places where folks are still willing to put their money. They are the ones that folks in Montana still trust. They do not trust the big Wall Street banks. We probably will not lose too many banks in Washington, DC, or Chicago, IL, but we will in rural America. I do not want to see that happen.

Another good one that I have heard this week is the argument that the amendment will allow banks and credit unions to factor executive compensation into the cost of interchange fees. It will not. In fact, the amendment specifically states that the Federal Reserve and other banking regulators must look at the costs associated with debit card transactions and program operations.

We also know how dangerous it is to set a price for a product without understanding all of the costs that go into that product.

Home Depot would never allow the Federal Government to set the price of garden hoses simply by looking at the cost of manufacturing a garden hose.

No, Home Depot charges us for the cost of manufacturing it, shipping it, keeping it in stock, having someone tell you what aisle it is in, and on and on.

Likewise, if we are going to be regulating debit interchange fees, we need to understand all of the costs associated with debit transactions and debit programs.

When we voted on this amendment last year, we thought we were voting to allow the Federal Reserve to consider all costs. However, the reality is that last year's interchange amendment limited the costs that could be included. Some fraud costs were allowed to be included but not others. Some technology costs were included but not others. If we are going to be regulating this market, we need to be fair about it.

So the amendment directs the Fed to determine what is ``reasonable and proportional'' but it gives the Fed the discretion to look at all of the costs associated with debit transactions.

That does not mean executive pay. That does not mean a special rewards program.

All costs will still need to be justified, and if they cannot be justified they will not be considered. The Fed has been very clear with me--no executive pay, no bells and whistles.

But the decisions about the cost of routing networks, the costs of fraud and other technical details are much better left to the Fed than decided by the U.S. Senate.

Finally, Madam President, some have said that this amendment hurts consumers. It does not.

As someone who voted against the Wall Street bailout, who wrote part of the credit card reform act, and who voted for the Wall Street reform bill, I can tell you that if this amendment was somehow bad for consumers, I would not offer it.

In fact, the amendment requires the regulators to certify that the Fed's rules address consumer concerns.

The current law does not require anyone to look at the impact of interchange fee regulation on consumers. They are out of the picture.

I am not aware of any specific plans by any retailers to lower prices or provide customer rebates if interchange fees are lowered. I know that one large big box store held an earnings call at the beginning of the year where a company executive called the proposal to lower interchange fees a ``$35 million windfall.''

If I were a shareholder, that would have sounded pretty good to me. But as a customer, it is not clear how I benefit.

I understand that there are some folks who wish the amendment could go further to include additional consumer-oriented agencies such as the Federal Trade Commission as agencies that will conduct the study.

I would be happy to work with those Senators to see how we best protect consumers in this process. But the only way to make that happen is to get this amendment adopted; otherwise, the Fed's rules go into effect on July 21 regardless of what any consumers think.

I am looking forward to today's debate because we have an opportunity to address the unintended consequences of the Durbin amendment. Make no mistake, those unintended consequences will be felt all over rural America--and not for the better.

For the folks who think the two-tiered system will work, there is not a regulator out there who will tell you that it will. Some folks will tell you the Durbin amendment has an exemption for community banks under $10 billion and for credit unions under $10 billion. If they think that will work, there is not a regulator out there who will tell you that they can implement it and it will work because the free market system will drive it to the lower price. That is the way it is.

I am saying, let's slow down a little bit and make sure we get it right.

If we are going to create regulations, we are doing it in a way that is fair and consistent with the intent. Let's not try to solve one problem and create three others.

And let's not take shots at the folks in my neck of the woods who were not part of the financial meltdown.

That's all I am asking, and I urge my colleagues to support this amendment.

I yield the floor and ask unanimous consent that the time during the quorum calls until the vote be divided equally.

With that, I suggest the absence of a quorum.

Mr. President, let me take a moment here to clarify for my colleagues the intent of this amendment. Not surprisingly, a number of groups have made a number of claims about what this amendment ``is'' and ``is not.''

In drafting any regulations required by the amendment, any agencies involved are required to not only abide by the letter of the law but also the congressional intent of its authors.

Let me take a minute to try to make crystal clear what exactly the intent of this amendment is.

First of all, let me address some of the claims that have been made about the implementation date of debit interchange regulations. My amendment would direct the Fed to implement these provisions on a date of their determination.

Why was this language included in this way? The intent of this language is to provide the Fed with the discretion to implement these regulations as quickly as is practically possible for merchants, issuers and networks to prepare for such new regulations.

The hope with this language would be to avoid the situation we are in right now where parties impacted by these changes would likely have less than a month to implement significant changes to the debit interchange system.

To be clear, the Fed may not disregard implementation of debit interchange regulation, as some have articulated. They also may not arbitrarily decide to implement these rules 5 years from now. Any delay in implementation beyond a reasonable timeline of a few months would need to be justified by the Fed.

Let me also take a minute to address concerns that have been raised about the language we have used to describe what considerations the Federal Reserve must make if a determination is made in this amendment and the Federal Reserve is directed to rewrite the debit interchange rules.

The language states that the Federal Reserve shall ``consider''-- again, shall ``consider''--all fixed and incremental costs in determining what is a reasonable and proportional interchange fee. Let me say this again. The Fed shall ``consider''--not include, not calculate, but shall consider--all fixed and incremental costs. That word is important because ``consider'' provides the Fed with the discretion to consider and determine, using their judgment, what is reasonable and proportional, meaning any costs considered would need to be justified to the Fed.

To further clarify, the language directs the Fed to consider ``all fixed and incremental costs associated with debit card transactions and program operations and allow incentives for a more innovative, efficient and secure payment card network.''

Why did we include all fixed and incremental costs? That is because the original statute limited the costs the Federal Reserve could consider to only those costs associated with the ``authorization, clearance or settlement of a particular electronic debit transaction.'' This language severely limits the costs to issuers that the Fed may consider in calculating reasonable and proportional rates and is in large measure why the Federal Reserve's proposed rule is currently at 12 cents.

There are a number of fixed costs associated with debit transactions, chief among them fraud costs, which are also arbitrarily limited in the original statute. The fraud language states that the Federal Reserve may--not must but may--allow for a fraud adjustment for costs associated with fraud prevention. Now, the Federal Reserve draft proposal did not include any fraud adjustment, and we have no idea what an adjustment might look like or whether the final rule would include one. But if it did, it could only include an adjustment related to fraud prevention but not the actual costs or losses associated with fraud.

Take for example the recent data breach by Michaels stores--a breach, by the way, which was the fault of the retailer, which had their debit kiosks compromised. What were the costs to the issuer of the cards that were compromised? They were significant.

First of all, it was a community bank in Illinois that had a fraud- monitoring program that identified the threat and alerted the retailer their kiosks had been compromised. Then there were the costs to these issuers of making their customers whole again for the losses they sustained by criminals removing funds directly from their bank accounts--$500 at a time. Additionally, issuers had to foot the costs associated with reissuing the cards and opening new accounts for customers with compromised accounts. But none of those costs--those associated with fraud and losses assumed by the issuers--could be calculated in the fraud adjustment under the current statute. That is why we included language directing the Federal Reserve to consider all fixed and incremental costs associated with debit card transactions and program operations to capture those costs. Fraud losses in monitoring programs are not associated with individual transactions, nor is the creation or reissuance of physical cards, account maintenance, or cardholder servicing.

Let me also say what we do not believe is included in any reasonable and proportional fixed and incremental costs associated with program operations. As a result of our conversations and consultation with the Feds, we do not believe rewards programs or miles would be nor should be considered as permissible costs, nor would or should any executive compensation, nor should the costs of maintaining ATM machines.

Why did we include the language allowing the Federal Reserve, in setting reasonable and proportional rates, to ``allow incentives for a more innovative, efficient and secure payment card network''? We added it because, in conversations with the Federal Reserve about what sorts of costs would be included in reasonable and proportional costs, they indicated that right now they do not have the ability to incentivize savings by issuers to make processing more efficient or secure. It seemed like a pretty good idea to Senator Corker and me that we should give the Federal Reserve this kind of discretion and that issuers should be incentivized to lower costs below whatever the Federal Reserve determines to be reasonable and proportional; otherwise, the fee would likely stay the same for years to come as there would be no incentive to lower costs.

In addition to the flexibility provided to the Federal Reserve to set the rates, the amendment also intends to provide discretion to the Federal Reserve to include additional factors in the study, such as the overall impact of regulating interchange fees on small businesses and the economy, as well as discretion in the agencies the Federal Reserve may consult when drafting the study.

In addition, it is intended that the findings must be made public and that the Federal Reserve is not required to start from square one. The intent is for the Federal Reserve to be able to build upon the information and insights which they have gathered already and which are a part of the current record.

Finally, this amendment doesn't undermine or inhibit the Federal Reserve's ability to implement the routing and network exclusivity provisions in the underlying statute. In fact, it does quite the opposite. We sought to preserve this language and these provisions as they were originally included in the statute.

In the last couple of days, several Senators have suggested additional changes that would improve the consumer-related aspects of the study proposed by my amendment. I very much appreciate their concerns and their interest on this critically important point, and the changes they have suggested are certainly ones I and other cosponsors are open to. Unfortunately, the Senator from Illinois filed a second- degree amendment which essentially closed off any chance to make additional changes to the amendment once it was filed.

I am more than willing to work with my colleagues to find ways to continue to improve this amendment and to ensure that consumers, small businesses, small banks, and credit unions get a fair deal as we move to a regulated interchange marketplace. And that is what we will get out of this amendment--the same idea of regulation that 64 Members of this body supported last year.

The difference between my amendment and the current law is that we will ensure that the Fed's regulations do not set the price below the cost of doing business. The current law prevented the Fed from looking at any number of elements of the cost of interchange. Some fraud costs were allowed to be included but not others. Some technology costs were included but not others. Why? Because the Senate made those arbitrary decisions. The result is a proposed Fed rule that sets the debit interchange rate at 7 or 12 cents for all transactions--a level most folks agree is too low. Let's allow the Fed to find the actual correct number. As a farmer, I can tell you that if it costs me $3 to produce a bushel of wheat, it won't matter if I sell it for $2 or $1 or 50 cents, I will still go out of business because it is below my cost of doing business. And that is precisely what will happen to our smaller banks and credit unions.

With that, Mr. President, I yield the floor, and I suggest the absence of a quorum.

Mr. President, I too echo the thoughts of the good Senator from Illinois. Senator Durbin and I are friends. We may not sound like it today, but we are. We just happen to disagree on this particular piece of policy.

There is one premise that I think is being taken as a given that is not a given at all. It was in the original Durbin amendment. It said we were going to exempt banks of $10 billion and less and credit unions of $10 billion and less--so we are going to do that. A lot of folks voted for this amendment because they knew the small banks couldn't distribute their costs, and it would have undue harmful effects on the small banks, small credit unions, and community banks.

But the facts have borne out something different since the last year. They have not been borne out by stuff that I have made up. It comes from the regulators themselves.

I have said many times on this floor that every regulator I have talked to, State or Federal, has said the exemption for small banks and credit unions will not work. It will not work. We voted on something 1 year ago that we thought we had and it does not work. Let me read the quotes:

Fed Chairman Ben Bernanke:

We're still not sure whether it will work. There are market

forces that would work against the exemption.

He said it May 12 of this year.

Another quote by Chairman Bernanke:

It is going to affect the revenues of small issuers and

could result in some of the smaller banks being less

profitable or even failing.

Once again, in the banking area, by FDIC Chairwoman Bair:

I do think this is going to reduce the revenues.

Let me say that again:

I do think this is going to reduce the revenues at a number

of smaller banks and they will have to pass it on to their

customers in terms of higher fees.

What does that mean? Checking, time getting the loan, fees, all that stuff. Money doesn't grow out of air. You have to have it, and if you don't have it and you are doing business, under the cost of doing business you have to make it up somewhere.

Another quote from Ben Bernanke, and it is about the two-tiered system that is unlikely to maintain--to protect smaller institutions. This is a quote:

A number of networks have expressed their interest or

willingness to maintain a tiered interchange fee system, but

of course it is not required.

Chairwoman Bair again:

If the Federal Reserve's view is there is no legal

authority to require that, it does become more problematic.

The fact is, the two-tiered system is not going to work. Every regulator said it is not going to work. Its impacts are going to be on small community banks, not the Wall Street boys. They are fine. We agree on that. But the community banks and credit unions are going to have incredible impacts on our small businesses that we are trying to help get us out of this recession we are in.

This is not a bailout. This will ensure a regulated debit interchange system. By the way, I do not believe in bailouts. I didn't believe in the TARP bailout. I voted against it. I voted against the auto dealers' bailout. Right or wrong or indifferent, I do not believe in bailouts. I would not be supporting this if there were a bailout. I would not be offering it.

Wall Street banks are going to be just fine regardless of what happens, but the fact is, the exemption for banks under $10 billion will not work. That is why I am here. It is as simple as that.

I wish to close for now with a statement made by the ``Frank'' in Dodd-Frank, whom this bill is named after, Barney Frank, who worked with Chris Dodd to craft this bill in the House and Senate. Here is what Barney Frank says. Is today the 8th, by the way? He said it today, the 8th of June, speaking of the Tester-Corker-Hagan-Crapo-Bennet amendment, this amendment:

This is a good, balanced, compromised approach. I support

it and I hope it will pass.

The author of this bill from the House thinks this is a good policy change to make Dodd-Frank better.

I yield the floor.

Mr. President, just to clarify, I have 2 minutes, Senator Durbin has 2 minutes, and then we vote?

God bless the U.S.A.

Mr. President, let me say this, first of all, to the folks in the gallery and the Members who are still in their offices. Look at me. Do I look like a banker? Senator Corker and I drew up this amendment. The banks did not draw up this amendment. We drew it up with the help of Senators Hagan, Crapo, and Bennet.

As is usual, Senator Durbin and I agree on 90 percent, and there is 10 percent on which we disagree. Do I think swipe fees need to be regulated? Of course. But the problem with his amendment is that the exemption on community banks and credit unions under $10 billion does not work. It doesn't work. I have read all the quotes from Bernanke and Bair and the head of the OCC and the NCUA and all of them. They have said that they don't know how to make a two-tiered system work because the free market system will overrule it, and that is the way it ought to be in this country.

So the bottom line is, I look at this from a rural perspective and the impact the Federal Government has on rural America, and while we are trying to solve one problem, we are creating two or three others. I could care less about the Wall Street banks. They are going to do fine. But I will tell my colleagues, if we lose the banks in our small towns in Montana or Wyoming or Tennessee, then we can put another nail in the coffin of rural America.

With that, I yield the floor to the good Senator from Tennessee.

I ask for the yeas and nays.

Madam President, this afternoon there will be a critical vote that will take place on the Senate floor. It is one of the most controversial, business-oriented votes that we have faced. Leading up to this vote has been one of the most heated debates and exchanges that many of us in the Senate have seen in our time. It relates to an issue that affects almost every American family, and certainly all American businesses, and the financial community. It is a basic question that needs to be resolved on the Senate floor.

My friend and colleague from Montana, Senator Jon Tester, is offering an amendment, which I oppose. I have the highest respect for Jon. We have discussed this, and our friendship remains strong throughout this debate.

We just see this differently. Whatever the outcome of the vote, I certainly am going to continue my strong friendship with Jon and be a fan of what he brings to the Senate and what he does for the State of Montana.

Joining him in this amendment is Senator Bob Corker of Tennessee. I have the same high regard for Senator Corker, and any remarks that I make today are no reflection on them at all. I think they are both honorable people who are standing tall for their point of view, with which I happen to disagree. But I want to make it clear that I think this is a historic vote, a threshold vote in terms of whether the Senate, the Congress, and the Government of the United States will step into a situation that has created a fundamental unfairness. And this is the unfairness.

When we use debit cards, or plastic, to pay for a transaction, there is a fee that is collected. It is a fee that is paid to banks and, of course, paid to the issuing credit card network. The merchant or retailer that accepts that plastic, that debit card, has no voice in determining what that fee will be, and it is invisible.

Just one floor below us in the Capitol is a carryout. I went there this morning to pick up a little breakfast, and there was a young lady--a Capitol Hill policewoman--in front of me. She took a package of chewing gum and put it on the counter and handed her debit card to the cashier. The chewing gum cost $1.20. The average fee paid by the merchant--in this case, the proprietor of the carryout--is 44 cents on that transaction, more than one-third of the cost of the pack of chewing gum. The owner of the carryout had no voice in that fee. It is a fee that has been imposed on that merchant by the credit card network that issued the debit card.

A year ago, we took up this issue and asked, Is it fair or reasonable? The reason I think we need to take a look at this is, in the United States of America the so-called swipe fee is dramatically greater than in virtually any other country in the world. The same networks, Visa and MasterCard, charge, on average, 1.14 percent on every transaction using a debit card. If one goes to the European Union, the average debit interchange fee is .2 percent, less than one- fifth of what is charged in the United States by the same credit card network. Then, of course, take a look at Canada, just north of the United States, where there is no--zero--interchange fee charged on debit card transactions.

Why is the United States, through its consumers, small businesses, and large retailers alike, paying so much more? These credit card networks, through their issuing banks, are charging this because they can. There is no restraint whatsoever--at least there wasn't until last year.

We had a debate on the floor of the Senate, and we asked--on behalf of consumers, small businesses, retailers, and merchants all across America--should we establish a reasonable fee for the use of a debit card? We voted, with 64 votes, to do that. The fee is to be established by the Federal Reserve.

Most everyone would concede two things. First, the Federal Reserve is not partisan. It is going to make this judgment based on the economics of the marketplace, in terms of what the fee should be. Second, if there is any bias at the Federal Reserve, it is not toward consumers. This is not a consumer protection agency. No one has ever called it that. It is an agency which, by and large, is more comfortable in the boardrooms of major banks. So we gave them this responsibility.

What the Federal Reserve came up with, after 5 or 6 months of investigation, was a startling discovery; and that was the interchange fee being charged on debit card transactions in the United States, on average, was 44 cents--that is what the 1.14 percent translates into, 44 cents a transaction--and the actual cost to the debit card network issuing banks was in the range of 12 cents.

What is being charged to consumers and small businesses all across America is more than three times the reasonable and proportional cost of the transaction. At that point, the Federal Reserve said: We are going to sit down as instructed by this law passed by Congress and signed by the President and come up with a reasonable interchange fee. They confessed--Chairman Bernanke and others said it was a challenge, and it is. But they said they were going to do it, and do it right, and they needed more time. Chairman Bernanke called me and said: I need an additional 6 to 8 weeks to do that. I said I was sorry to hear that.

They had more than 11,000 comments posted to the Federal Reserve about what this debit fee should be, what is a reasonable fee. They are about to announce, before the end of this month, what it is going to be. I don't know what their report will say. I suspect it will be somewhere between 12 cents and 44 cents, with many other provisos included. That is where we stand.

Under the law passed last year, this new debit card interchange fee rule would go into effect July 21. Well, needless to say, it has generated a lot of controversy, particularly among the card networks, Visa and MasterCard, and the issuing banks that issue these debit cards. They don't like this at all.

As Senator Dale Bumpers of Arkansas--who used to sit right back there--used to say: They hate this interchange fee regulation ``like the devil hates holy water.'' They have done everything in their power to stop the Federal Reserve from issuing a rule that would bring down this 44-cent charge on every swipe of our plastic debit cards. Of course, they want to do it before the Federal Reserve issues their rule.

Today on the Senate floor, at 2 o'clock this afternoon, the banks and credit card companies get their chance to stop the Federal Reserve from coming forward with this new approach to the interchange fees.

As you can imagine, it is a titanic struggle because of all the retailers and merchants in the United States. From Walmart, on down to the corner bodega in Manhattan, or the corner store in Chicago, they are all involved. When I get into the car that picks me up at O'Hare to take me to my apartment in Chicago, my driver says: We are pulling for you. Every time somebody gives us a debit card, we end up paying more and more because of it.

I think the reach of these charges may surprise a lot of people. Here is a letter that we received yesterday from Tom Gordy, president of the Armed Forces Marketing Council. He writes and says:

On behalf of the member companies of the Armed Forces

Marketing Council, I want to offer our sincere appreciation

for your efforts to curb the skyrocketing costs to retail

business through debit card fees.

Our particular concern about debit card fees is the adverse

impact the fees are having on the pocketbooks and the quality

of life of military families through the military exchange

systems.

As you are aware, the military exchanges provide a non-pay

compensation benefit to military families and support

military families' financial readiness by offering name brand

products at an average savings of over 20

percent. Additionally, the profits generated by the

military exchanges are given back to the military

community through dividends that support quality of life

programs on military bases, including childcare centers,

movie theaters, gyms and swimming pools, to name a few.

Let's bring it back to the Senate floor now, and here is what he writes:

Currently, the three military exchange systems--Army-Air

Force Exchange System, Navy Exchange Command and the Marine

Corps Exchange--are having to pay well over $100 million per

year combined in interchange fees and interchange fees are

the fastest growing uncontrollable expense to the military

exchange system.

As interchange fees continue to increase, the military

exchange systems must either absorb the costs, thus reducing

the dividends that support essential military quality of life

programs, or they must pass the cost of the fees on to the

military family by raising prices. Either way, military

families lose because of interchange fees.

That is just one example, but an example that should hit close to home to us because it is an example that reflects on the quality of life of people we care for very much--military families--who sacrifice for this Nation. A system which is designed to help them is paying over $100 million a year to the issuing banks for the Visa and MasterCard debit fees. Is $100 million reasonable? If next year it is twice that, is that amount reasonable?

Most people would argue, if you believe in a free market system, you believe in two things: transparency, so people know what the rules of the game are--the actual prices and cost--

and competition. The honest answer is there is no competition here. Visa and MasterCard literally dictate these fees that are collected. What choice does a merchant have? Could you stay in business today and not take plastic? I guess some people do, but not many. The reality is more and more people are using plastic to buy things as basic as a pack of chewing gum for $1.20, which I saw this morning.

That is what this debate comes down to. The question is whether we will let the Federal Reserve issue this rule, take a close look at it, watch its implementation, and then respond, if needed. I don't know if their rule will be excellent or need help. I am prepared to stay the course with it. If we need to address it in any aspect with further legislation, I want to do that.

I particularly want to address my friends--at least those friends I have left--in the banking community. I am not going to stand here in defense of Wall Street. I think they have had quite a bit of friendship and love thrown their way by this Congress over the last few years. I am going to say, though, when it comes to community banks and credit unions, I think they deserve an exemption. It was included in the law. If we need to provide any other reassurances after the rule is issued, I will be there. I believe I can speak for the merchants and retailers, that they will be there as well. They have never disputed this issue of the community banks and credit unions being treated differently than the big banks.

But I do want to make it clear what is going on here in terms of the biggest banks that issue these debit cards. There is $1.3 billion a month collected in debit card interchange fees--$1.3 billion--which is more than $15 billion a year. Three banks--Bank of America, Chase, and Wells Fargo--control 50 percent of the debit card market, and they will collect nearly $7 billion in fees this year off of these debit cards. As I mentioned, the merchants and retailers have no voice in this. They pay what they are told they have to pay and they collect it from consumers.

Jamie Dimon is a person I have known. He is the CEO of Chase Bank. I worked with him when he was in Chicago. I had many conversations with him when he moved back to New York. I respect him for his business acumen. But he has been particularly pointed in going after this regulation of interchange fees. He has called it idiotic, in letters to shareholders and his customers. Chase has written to all of their debit card customers across the United States and said this so-called Durbin amendment--incidentally, it isn't an amendment anymore, it is a law-- will mean that Chase will have to raise fees on the people holding debit cards because they will collect less from debit card interchange fees.

That seems to make sense, doesn't it? If less revenue is coming in, they will have to make it up some way. But I want to call to the attention of those who are following this debate to this fact: The bonuses distributed by the banks on Wall Street last year amounted to $20.8 billion. If they lost every nickel in interchange fees on debit cards, it wouldn't even get close to the amount they paid out in bonuses to their executives.

So before Mr.--before the Chase Bank--I don't want to be personal about this--threatens its customers about increased fees and reduced benefits, let them be honest with their customers about the bonuses that are being paid. That bank--Chase--if I am not mistaken, had an increase in annual earnings of 48 percent this year. They are doing quite well, thank you.

And for the record, let me remind those who are following this debate that the taxpayers of America were asked to stand by these banks in one of their darkest hours when we faced this recession. Many of us believe it was brought on by some awful practices on Wall Street and among other banks, insurance companies, and financial institutions around the world. But in their darkest hour, when things were toughest, where did they turn for help? Not the good old free market system, but the Treasury of the United States of America. So in the end we gave--we gave--$25 billion to the Chase Bank. We gave $45 billion to Bank of America and $25 billion to Wells Fargo to help them through their time of need.

Oh, sure, they survived and they paid us back. But what was their gratitude? How was it reflected? It was reflected by these banks, after receiving taxpayer money to get them out of the hole they dug for themselves, turning around and awarding bonuses to their executives right and left. That is not an expression of gratitude where I come from. Now they come to us and say, we want you to continue this interchange fee subsidy, 50 percent of which goes to the three largest banks in the United States of America.

I think it is time for us to say no. I think it is time to stand for consumers and small businesses across America who have no voice, no power, and deserve our help in making this system fairer, more transparent, and more competitive.

The amendment before us is one I want to address specifically. Because instead of letting the Federal Reserve issue their rule at the end of this month--measuring whether its impact is as we had planned, responding, if needed, to changes--what the banking community and the credit card networks want to do is to kill this rule literally in the cradle before it has a chance to be issued, before it has a chance to be implemented. I think that is plain wrong.

Right now, I hear my colleagues who come to the floor offering this amendment--both Senator Corker and Senator Tester--saying this is a compromise. This is a compromise.

This is not a compromise. A compromise involves sides with differing views sitting down together and working out their differences. I wasn't invited to any meeting to come up with this so-called compromise. The merchants and retailers and businesses across America were not invited--not at all. There were no representatives of consumers in these meetings for this grand compromise. This was a compromise between the biggest banks, the medium-sized banks, and the small banks. So it is a bankers' compromise for bankers' benefit. That is what it comes down to.

In the last 2 days alone, letters opposing this amendment have been sent by consumer groups--military exchanges, as I mentioned, 11 colleges and university associations--because, incidentally, our kids at college bookstores, using debit cards, are actually paying more for their books because of these fees as well--308 national and State merchant trade associations and 6,500 small businesses. They are all opposing this so-called compromise amendment, though it isn't a compromise.

Secondly, this amendment is described as a 1-year delay of the interchange rulemaking. Actually, it is an open-ended delay. The bankers who wrote this very carefully crafted it. The amendment requires the Federal Reserve's rules to be rewritten in 1 year, but it doesn't set an effective date for the revised rules. There is no telling when, if ever, these rules will go into effect. This delay could be significant, and from the banks' point of view, the longer the delay, the better, because it is worth $1.3 billion a month for every month they can delay it. And how long would they like to delay it? Forever.

Then there is this idea of needing a study after the Federal Reserve put 12 months into reviewing this issue, considering thousands of comments to promulgate this rule. The amendment sets up a study of the interchange system that only takes into account the views of the banking regulators. Search the amendment--the Tester-Corker amendment-- for one indication there will be anyone sitting in the room representing the consumers or small businesses of America for this study. They are not invited. Not welcome. Not part of the conversation. Is this another compromise--a compromise that just involves banking regulators sitting down to decide what is in the best interest of consumers? Would you want your fate left to their hands as a consumer? Not me.

The study, incidentally, is loaded--the so-called triggers in the study, if you take a look at them. If the bank regulators deem that any of the triggers are met, they have to throw out what the Federal Reserve has done and start over. Well, guess what, the triggers are written in a way that this is a foregone conclusion. These triggers will be met. As each trigger mirrors public statements the public regulators have already made about the Fed's

draft rules, this is loaded. There is nothing objective or unbiased about this whatsoever.

The amendment essentially mandates a complete rewrite of the Federal rules by the banking regulators for the banking industry in favor of the banks.

Let me mention something else I think is outrageous about this. What the banks have said is, we don't want to measure the reasonable and proportional cost of a debit transaction to establish the fee we are going to impose. We want to include every variable and incremental cost we can consider. This amendment goes on for more than a page with all the possibilities.

The amendment provides the Fed must rewrite the rules under a very different standard than the law which currently exists. The new standard is one the big banks have been begging for. The Durbin amendment says the fee set by Visa and MasterCard, on behalf of the big issuing banks, has to be reasonable and proportional to the costs incurred that are ``specific to a particular electronic debit transaction.'' The Tester-Corker amendment would require the Fed to let Visa and MasterCard fix fee rates to cover bank costs that are not specific to any debit transaction. The Tester-Corker amendment requires the Fed to allow interchange fees to cover ``all fixed and incremental costs associated with debit card transaction and program operations, including incentives.''

This is a truck-size loophole the banks are begging for, because they know they can get up to 44 cents and beyond if they can add everything in from the cost of an ATM machine to executive compensation and executive bonuses. So honestly, are we going to stand here and say we cannot protect small businesses across America, struggling to survive, from outrageous price-fixing by the credit card companies so we can reward the issuing banks with bonuses? Is that what this is about? If it is, it is a pretty stark choice.

This amendment is a big bank windfall. The amendment has been described as an effort to help small banks, but it would undoubtedly be a windfall for the Nation's largest banks. It would give them a free pass to continue their anticompetitive practices for at least another year, and then it would require the Fed to write rules in a way that would enable big banks to justify the fees they are charging today. It is a no-change amendment.

If you believe, as a Member of the Senate, the current system is fair to businesses across America and we shouldn't change it, then voting for this amendment will guarantee your position will be enshrined in law. This proposed amendment is a gift to the big banks that will keep on giving and deny swipe fee relief to small businesses and consumers who desperately need it.

Madam President, I ask unanimous consent to have printed in the Record these three letters I have received from the Armed Forces Marketing Council, the American Council on Education, and Public Citizen U.S. PIRG.

Madam President, the groups that stand behind me on this effort know what we are up against. When we take a look at the most powerful special interest groups in Washington, we have to put the banking industry near the top, if not on the top, of the ladder. Throughout my career I have tackled them on the floor. I can recall many years ago, brandnew to the Senate, when I said we ought to change the banking laws so we would put an end to the so-called subprime mortgages. I was in a debate with Phil Gramm of Texas, who said at that time that if the Durbin amendment passed, it would be the end of the subprime mortgage business. I lost by one vote. If I would have prevailed, history might have been a little different. The subprime mortgage mess created an economic downturn from which we still suffer.

I stood up as well when it came to this foreclosure crisis and said that at some point these banks have to be reasonable. You just can't take homes away from people, board them up, and watch them deteriorate into nothing. You have to give people a fighting chance to stay in their homes. I said at the end the bankruptcy court should have the last word on that. The banking industry, the credit unions, the community banks opposed me. Take a look across America today at the foreclosed homes, in Chicago, in Aurora, in Springfield, all across my State, and across this Nation. The outcome, years after I lost that battle, certainly does not speak to a stronger America because of these foreclosures. The banking industry beat me on that.

Last year, fighting for these small businesses, retailers, I stood up and said: Somebody has to step up here and argue that there ought to be fairness in the fees they charge to businesses and consumers across America. We rallied 64 Senators--a bipartisan group--in support of that.

The banks want a second run at this. They want to take this game into overtime. They want to come back today and count their friends here and hope they can come up with 60 in the hopes that if the big banks and credit card companies can win this battle, we will leave them alone, we will not ask hard questions about the interchange fees that are charged. I am asking my colleagues in the Senate not to give the banks this overtime, extra-time victory. Give the victory to consumers. They have precious few on the floor of the Senate. Stand up for small businesses that do create jobs across America, and give them a chance to create jobs in this country by not being overcharged by the credit card networks and the biggest banks in America.

How many of us have come to the floor and said small business is the key to economic recovery? If you believe it, if you mean it, vote against the Tester-Corker amendment. That amendment is a blow to small and large businesses alike, large retailers and merchants alike, all across America. They stand in support of my effort to have a reasonable interchange fee on debit card transactions and to make sure they have a fighting chance to be profitable, to expand their businesses, and to hire more employees. That would be good for economic recovery. A vote for the Tester-Corker amendment unfortunately would be a win for the banks at the expense of an economy that desperately needs our help and support today.

I yield the floor.

Madam President, I thank my colleague from Wyoming. Our relationship and friendship has been growing over the years. I respect him so much as one of the real voices of retailers and small business. I had an opportunity to spend some time visiting China with him and his wife. We got to sit down and talk about their lives and what they have been through.

My colleague knows the small business side of this world better than anybody who sits in this Chamber. As I listened to him talking about the solution to this problem, I could not help but nod affirmatively. There is no reason we should have had to vote a year ago to establish this interchange fee. It reflected the fact that retailers, small businesses, merchants, hotels, restaurants, and shopkeepers across the board were literally given no seat at the table to discuss the fairness and propriety of these interchange fees. The point he made drives it home. The credit card networks, working through the banks, are charging our businesses in America the highest interchange fees--that is the fee charged every time someone swipes that plastic debit card--of any country in the world. The interchange fee in Canada is zero; in the United States, 44 cents on average on every transaction.

I could not agree with the Senator more. If the banks would come down out of their ivory towers on Wall Street and other places and sit down, roll up their sleeves with the folks running shoe stores and grocery stores and hotels and restaurants, and say all right, we are going to come up with a fairer system--if it is zero in Canada and it is 44 cents here, there is a number in between that can make sense to both sides. If that were the case, the Senator and I would be working on some other issues rather than this one.

But my colleague is so right. Today we have to defeat the Tester- Corker amendment; otherwise, we are sending a massive subsidy to the biggest banks on Wall Street, up to $8 billion a year that they collect in these debit card interchange fees at the expense of small businesses and consumers all across America.

I thank the Senator for his support. I know later this afternoon at 2 o'clock when we face this vote it is an important vote for every small business in his home State and mine as well. I thank the Senator for taking the floor.

I suggest the absence of a quorum.

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

Mr. President, I have high regard for the Senator from Montana. He is my friend, and he will be my friend whatever the outcome of the vote happens to be, which will happen in about 40 minutes. But I do disagree with him on this issue.

I would like to make it clear from the start that the law on the books today specifically exempts community banks and credit unions-- specifically those valued at $10 billion or less. That means 100 banks out of 7,000 in America are affected by this new law and 3 credit unions in all of America.

Now, the banks and credit unions have come here and said: Not enough protection because we can't be sure you will protect us from the credit card companies coming back on us and hurting us. OK, we can write in more protection, if necessary. But to argue that we are trying to save mom-and-pop banks here--from whom? We are trying to save them from the credit card giants that have created this price-fixing mess.

If you are an autograph seeker and you happen to want to meet CEOs of major corporations, you hit it rich today. Get over here and walk the halls of the Senate office buildings, and you will meet the CEOs of the biggest companies and banks in America. Why are they here today? Because of this 2 p.m. vote. Why is this 2 p.m. vote important to the three biggest banks in America--Chase, Bank of America, and Wells Fargo? Because right now what is at stake with the Tester-Corker amendment is $8 billion in fees they want to collect from consumers and businesses all across America--$8 billion.

When we got into the business of TARP--remember those days when the

banks had messed up the economy so badly that we had to come to their rescue with taxpayer money, and the average family across America watched the taxes they were paying this government going to the biggest banks on Wall Street? That was about $800 billion. The three biggest banks that will profit the most here from this amendment--Chase, Bank of America, and Wells Fargo--each was a beneficiary of that TARP money, that bailout money. Chase received $25 billion, $45 billion went to Bank of America, and $25 billion went to Wells Fargo. They did quite well. When we rescued them, they sent us a little thank-you card. Do you know what it was? It was a notice that they were giving their chief executives bonuses out of the tax money we were sending.

So the question is not whether we are going to do another TARP today but whether we are going to do a baby TARP. It is only $8 billion for these three big banks this time, but I think it is an outrage. It is an outrage to make consumers across America pay this. They pay it every time they use their debit cards, and the merchants and retailers that collect it have no voice in this process.

I wish some of the people who come to this floor and shed copious tears over community banks and credit unions that are already protected in this law would shed a few tears for the people who run the shops and businesses across America, the restaurants and the hotels. These are the people who are being hit by these debit card fees every single day. Where is the sympathy for small business on this floor? They are all over Illinois, they are all over America.

If we really believe the key to economic recovery is the strength of small business creating and expanding jobs across America, for goodness' sake, let's stand up for them. You can't vote at 2 p.m. for this pending amendment and say you are a friend of small business. No, you can't. Small business is lined up across America saying: For once, give us a break against these credit card companies and the big banks on Wall Street. Give us a break. Are we going to do it? I am afraid not, if we pass this amendment.

I look at this amendment and I think to myself, Why did the banks write it the way they did? They wrote it so they could include more costs into their calculation of the fee they charge on an interchange transaction with debit cards. I will tell you this: Based on the language that was just read to us, they will easily justify the 44 cents they are currently charging and more.

I respect my colleague from Montana when he says on the floor that he didn't mean to include certain things. I wish he had been specific. I think the language of this amendment is broad enough and wide enough to drive a truck through. The banks are going to come out quite well, thank you, at the end of the day. But don't they always? When it is all said and done, aren't they usually the winners around here?

Today, we have a chance to turn the tables, to really make the winners small businesses and consumers across America. That is why consumer groups support keeping the law as it is. That is why, when the banks wrote this, they said the four agencies that would decide what the fee was going to be would be four bank regulators. I am searching-- searching, searching--for any reference to consumers or small businesses. Sorry, the banks couldn't include those people. They couldn't include those people in that calculation.

To say ``We are for the little guy, and that is why we need to vote for this amendment'' is to ignore the amendment's wording as written. If you are for the small businesspeople across America, there is only one vote, and it is a ``no'' vote.

Let the Federal Reserve issue this rule. Don't let the banks stop them in their tracks. That is exactly what they want to do. Let them issue this rule. If more needs to be done, I am on board. But the notion that we cannot even trust the Federal Reserve to come up with a rule on this that may protect small businesses and consumers across America is just plain unfair. It is wrong and we ought to know better.

I reserve the remainder of my time.

How much time is remaining?

Is there any time remaining on the other side?

Mr. President, if Senator Tester returns to the floor and wants to speak before the vote, I will ask unanimous consent to each have 2 minutes for that purpose. Perhaps he is not going to, but I want to make this a matter of record here because I want to give him a chance to close.

Let me try to get down to basics. Have my colleagues ever pulled out one of these cards to pay for something? If you are my age, you don't pull it out as often as younger people. This morning, I was down in the carryout here, and a young woman who is a Capitol police officer bought a pack of chewing gum for $1.20 and handed over her debit card. The debit card was swiped. She took the chewing gum and walked away. The average amount that is charged by the issuing bank of her debit card is 44 cents for each transaction. How much money do we think the owner of the carryout made on that pack of gum this morning? The answer is nothing. Now repeat that over and over again across America.

What is happening is that the banks issuing these debit cards are imposing interchange fees, swipe fees, on these transactions, and the merchants and the retailers have no voice in the amount of that fee, no voice whatsoever.

The Federal Reserve did a study and asked: Well, how much does it actually cost them to process that debit transaction? The answer was 12 cents, in the range of 12 cents. The charge is 44 cents; the cost is 12 cents. Is there something wrong with this picture? It means every person buying goods at stores across America pays more to pay for this fee.

We have heard the plaintive cries of those offering this amendment of how we have to have some sympathy for these banks--these poor banks, struggling to survive. If they can't collect the maximum on their debit fee interchange fee, the swipe fee, what is going to happen to them? Well, we have already exempted, incidentally, all banks with values of $10 billion and less, so we are talking about the big boys, the big banks.

So let's ask a few basic questions.

How does the debit card interchange fee in America compare to other countries? Visa and MasterCard do business all around the world. Banks issue these all around the world. So how do we stack up? Where is the good old U.S. of A? Well, I will tell my colleagues where we stack up. We have the highest interchange fees charged by Visa and MasterCard anywhere in the world--the highest. Thank you. Can America express its gratitude any greater than to say thank you to the banks for charging us the most for using plastic?

So what do they charge in other countries? Debit interchange fees in the European Union are less than one-fifth the charge in the United States. So let's do the math: 9 cents a transaction in Europe, 44 cents here. We want to give a big, sloppy kiss to these big banks at 2 o'clock for the way they are going to treat us. But it gets better. When we go to Canada, the Visa and MasterCard debit interchange fee in Canada is zero. There is no interchange fee. Now we have people on the floor begging us to show some sympathy for these banks and give them an interchange fee, and they charge nothing in Canada--zero. That is the reality.

The biggest banks make the biggest money on this process, far and away--Chase, Bank of America, and Wells Fargo--to the tune of almost $8 billion a year. How long did they want to study interchange fees? If one is making $1.3 billion a month, one wants the study to go on for months, if not years. Get back to you later, we say to the banks. Yes, that is exactly what they want. At 2 o'clock, we will decide as a Senate whether we are going to give it to them.

This amendment, drawn up by the banks, compromises between the banks, gives to the banks exactly what they are looking for--a huge loophole to assess their interchange fees to justify what they are charging today and charge more. There is nothing in here--nothing--to protect consumers and businesses across America.

I got started in politics with a fellow named Paul Douglas. This goes back a few years. I was a college student. Douglas was a Ph.D. in economics--much smarter than I, for sure. He spent his whole life trying to pass something called truth in lending. All he wanted the banks to do was to tell their customers how much they were charging them and what interest rates. He spent 18 years battling that, and he left the Senate without getting it done. He couldn't finish it. Bill Proxmire of Wisconsin took up the battle and passed it. Paul Douglas fought those banks for 18 years.

It is a battle that has been going on a long time around here because, you see, there is a lot of power in this banking community, these financial institutions. When they come to the floor and say they want something, Congress decides, we better start talking. Rarely do they ever lose.

I guess we could say the Wall Street reform bill was a loss for them, but they deserved it. Look at the god-awful mess they put America into with their rotten practices, their stupidity and reckless conduct. We are still paying for that. We still have a lot of people out of work and businesses that failed. Many of the savings accounts of families across America are still suffering because those banks made those mistakes. And in the free market system, did they pay for their mistakes? No. The American taxpayers paid for their mistakes.

Giving credit where it is due to Senator Tester, he voted against the TARP bill. He said it, and I want it to be on the record. I voted for it. I did because I was told by Ben Bernanke of the Federal Reserve and Hank Paulson of the Department of the Treasury: If you don't help these banks and they fail, you will see a worse depression than 1929. I bought it. I voted for it. Almost $800 billion in bailouts to these banks. I was seething to think we were going to spend taxpayers' money to help these banks be rescued from their own stupidity and their own greed. We did it.

The three biggest banks involved here--some $95 billion we sent to them. Well, they are back. They are looking for the second installment on their payment, this time not from the taxpayers, this time from consumers and businesses across America. What they are asking us for, the biggest banks, the three biggest ones, is almost $8 billion a year in these interchange fees.

We have a chance now to try to bring some balance to this conversation. We have a chance to finally stand up for small businesses and merchants and consumers across America who have been victimized by the credit card companies and the big banks for too long. Can this Senate stand up once a year, once a decade for consumers across America against these financial institutions? That is what is at stake with this amendment. I know it is going to be a heated vote because my poor colleagues have been beaten to a pulp by both sides by those who feel very intensely about this issue.

I wish to credit my colleague from Montana because he told me at the outside--when I said, Jon, please don't do this, he said, I believe it. And, Jon, I admire you for doing it. I still do. Even though I disagree with you, I admire you for doing it. You are a man of conviction and principle and a great Senator.

But this is a historic moment in the Senate. It is a moment where we will decide whether for once the big banks are going to lose and the consumers are going to win; whether we are going to reduce the cost of these transactions and help consumers across America and small businesses across America make the profit they need.

Some people say: Well, this hasn't been studied enough. For 11 months now, the Federal Reserve has been studying this, the best economists, the best minds there. They have entertained 11,000 comments. They have heard everything under the Sun. They have heard it all. In a matter of days, they are set to issue a rule--a rule which no one has seen, a rule which the banks don't want anyone to see. They don't want this rule to see the light of day, and that is why they are here today--to stop the Federal Reserve from issuing a rule that may cost them in terms of their bottom line.

It is our choice now. It is our choice whether these banks are going to prevail. History will record the strength of consumers and small businesses across America against the Wall Street banks that take away more than half of the interchange fees on debit cards that are collected across America.

I hope my colleagues will stand by the decision we made a year ago. I hope they will give each of us an opportunity to see this rule come into effect and from that build on it a stronger, growing economy, one that is fair--an economy where interchange fees have been dictated by the big banks and credit card companies for too long.

I reserve the remainder of my time. How much time do I have remaining?

I mentioned on the floor earlier that I would like to give to my colleague 2 minutes, and then I will take 2 minutes, and that will be it. So I ask unanimous consent.

Mr. President, I understand I have 2 minutes?

Mr. President, if my colleagues are interested in smalltown America, they should be interested in the businesses that operate in smalltown America, and they are begging us to vote no on the Tester-Corker amendment.

I happen to live in a town of 120,000 people. It is a little bit larger than my colleague's hometown in Montana, but I can tell you what the businesses there are saying. I can tell you what Wendy Chronister is saying, who owns the Qik-n-EZ gas stations. She is saying to me: Give me a break. They are hitting us so hard with these debit interchange fees.

We have letters put in the Record from military base exchanges which say this is the fastest growing, uncontrollable cost they are facing. This is a problem which the credit card companies and the banks have wanted to ignore and now this amendment wants to delay for 6 months, a year, or longer.

In terms of trusting the regulators, I am afraid the banking interests that wrote this amendment did not trust them to even issue the rule. You had to call this debate before they issued the rule. You do not know what the number is going to be on the interchange fee, but you had to stop them in their tracks.

If you will go look in the corridors and rooms around Capitol Hill, you will not find a lot of small town bankers.

You will find the biggest banks in America waiting in the wings, praying, putting in a billion dollars' worth of prayers that this amendment is going to pass.

I do not question the intentions or motives of Senators Tester or Corker. I never will. But I can tell you, the effect of this amendment is going to be giving to those big banks and those credit card companies a windfall of profit they do not deserve.

If the interchange fee is zero in Canada, why is it 44 cents here? Can we stand up, representing the people of this country, and say that is fundamentally unfair; you have to treat our consumers and merchants fairly? If we cannot stand up and do that, why are we here? To do the bidding of the banks and the credit card companies? I hope not. I hope we are here to stand up for economic fairness and for consumers and small businesses across America begging us to defeat this amendment.

I yield the floor.

I suggest the absence of a quorum.

I object.

I announce that the Senator from Connecticut (Mr. Lieberman) is necessarily absent.

I Object.

Mr. President, let the games begin. That is what is going on here. I have full respect for my colleague, but you can tell from his tone and tenor that Senator Paul finds it amusing he is offering a clean debt ceiling increase that he is voting against. He is offering an amendment he is voting against, when we know we are in discussions with the President, and with the Vice President, and discussions with the Gang of Six to try to figure out a way that we can come together, not have ``gotcha'' votes on the Senate floor. It is outrageous.

I will tell you why it is outrageous. We have an underlying bill here that you have been very helpful with, Mr. President--S. 782--the Economic Development Revitalization Act of 2011, which will reauthorize a very important program that has been in place in this great Nation since 1965. It was last passed when George W. Bush was President. It passed this Senate unanimously, without all these amendments that are going nowhere.

There are 27 amendments as of last night--actually, it is probably many more now. We know this game because we played it before, when Senator Landrieu stood where I am and tried to get a small business bill through here, which would have created thousands of jobs in this Nation.

Well, here we are. We have a bill that came out of the Environment and Public Works Committee with a strong vote. We had one dissent. Senator Inhofe is my primary cosponsor. For 50 years, this EDA program, the Economic Development Administration, has created jobs and spurred growth in economically hard-hit communities.

We know the struggle we are having in coming out of the greatest recession since the Great Depression. I remind the people within the sound of my voice that when President Obama took over, this country was bleeding almost a million jobs a month. We are getting back on our feet. We got the auto industry back on its feet. We are getting manufacturing back on its feet, but it is too slow. We have to do more. Once in a while, we get an opportunity to work with small businesses, the private sector, local government, and attract funds from nonprofit organizations and bring jobs and important work to our communities. This is one way.

An arm of the Chamber of Commerce wrote me a letter yesterday saying how important this work is. The Business Civic Leadership Center said:

EDA has served as a valuable partner in many communities

that we have worked in including San Jose, California;

Seattle, Washington; Cedar Rapids, Iowa; Mobile, Alabama; New

Orleans, Louisiana; Atlanta, Georgia; Boca Raton, Florida;

Minneapolis, Minnesota; Newark, New Jersey, and many others.

It was signed by Stephen Jordan, executive director of the Business Civic Leadership Center of the U.S. Chamber of Commerce.

This is a bill everybody wants, but games are being played in the Senate--I guess just for the fun of it, to stop us from doing our job. What is our No. 1 job? To create jobs. What does the AFL-CIO say? You have business and labor. They say:

EDA has established an admirable track record in assisting

economically troubled low-income communities with limited job

opportunities by putting their investments to good use in

promoting needed job creation and industrial and commercial

development.

That is signed by William Samuel, director, Government Affairs Department, AFL-CIO, and that is dated yesterday.

Why is business and labor supporting this bill? Why do they want us to stop the games and pass this bill? Because they want jobs for businesses, and businesses want the work.

Now let's take a look at other people who were supportive in addition to the Chamber of Commerce and AFL-CIO: U.S. Conference of Mayors, American Public Works Association, National Association of Counties--I was a county supervisor and belonged to that organization many years ago. If you want bipartisanship, go to the National Association of Counties. There are Democrats, Republicans, Independents--people of every stripe, liberal, moderate, conservative. They all come together. Why? Because business and labor are together, and everybody wants jobs.

Why do we have to face an amendment by my friend Senator Olympia Snowe on deregulation--a bill that hasn't had one hearing in any committee and will, in many ways, eviscerate the important rules and regulations that protect public health and the environment? We should have a hearing on that bill. I am sure we can work together and make it a wonderful bill. Instead, it is offered on this bill.

Not at this time, but I will yield when I conclude.

We have a bill that will create tens of thousands of jobs, and we have the first amendment offered by my good friend, which has not had one hearing, and it repeals all kinds of protections for the public health.

I don't get it. There is only one thing that I can get, with all these amendments, we have amendments on the debt ceiling that have nothing to do with this bill. This bill will create income for taxpayers, because when jobs are created and people work, they pay their fair share of taxes. This bill does not deserve to be treated this way when it passed almost unanimously out of the committee and it is totally bipartisan and has been in place for almost 50 years. Yet that is where we are.

Every Senator has the right to do what he or she wants. They can play games. They can have fun. But I care about the people I represent, and they need jobs. I care about them whether they are in Kentucky, California, or Maryland--any State in this Union. We are United States Senators. We should care about the people, not get up here and play games.

EDA uses limited Federal dollars to leverage large amounts of private sector investment. It is the little spark that creates economic activity in areas that are distressed, and it creates these jobs all across the country. Every dollar of EDA investment attracts nearly $7.

Let me show some other charts. When we vote for this bill--and this is an authorization, by the way, not an

appropriation. We have authorized it at $500 million. Historically, in the last couple of years, it has been funded at about $300 million, $250 million. But every dollar attracts $7 from the private sector, and that is a fact. It was documented in congressional testimony made on March 3, 2011. So that is the history of this EDA.

People say, well, how much, Senator, do these jobs cost--each job? Well, here is what we know. One job is created for every $2,000 to $4,000 invested. So it is an average of somewhere around $3,000 a job. That is a good return on our investment. We know that between 220 and 500 jobs are created for every $1 million of EDA investment.

Here is what we know. Between 2005 and 2010, 450,000 jobs were created by these investments and 85,000 jobs were saved. Everybody in this Senate, I think--though I could be wrong--if asked what is the most important thing we have to do today, would answer it is to help spur job creation in the private sector. Most of these are in cooperation with the private sector. Sometimes they are sewer projects or water projects that are needed by the private sector.

Let me cite some examples of that. Since we are authorizing this, at this stage, at $500 million, one might ask, how many jobs would be created each year. It looks as if it would create nearly 200,000 jobs per year and between 430,000 and 1 million jobs over the life of the bill.

But let me use some examples, because this isn't rhetoric. This is a program that has been in place since 1965. The city of Dixon, in my home State, got $3 million for a water system that will increase the city's water supply and their storage capacity, which will eliminate a major impediment to planned development and expansion of the city's commercial industrial areas. When you don't have enough water, you can't expand. I learned that when I was a county supervisor. You need to make sure there is adequate water, adequate electricity, and adequate sewerage. You have to make sure there are adequate roads. All these things are necessary for development and job creation.

This project is expected to create 1,000 jobs and leverage $40 million in private investment. So we have a $3 million investment to improve the water system and it is going to leverage $40 million. I call that a good deal for our taxpayers and a great deal for the American people to see jobs created. So we have 1,000 jobs--good jobs-- created. That means 1,000 dads and moms bringing home paychecks for their families.

But what do we have here? The same thing Senator Landrieu had to put up with--amendment after amendment after amendment that has nothing to do with this bill. We even had an amendment from a Republican friend that would do away with this entire agency. Unbelievable.

The city of Shafter in my State, $2 million for sewer and water improvements to serve the East Shafter Logistical Center, which will allow development of an additional 600 acres to enable continued growth of the center and support a multimodal transportation hub. This project is expected to create 1,400 jobs and leverage $200 million in private investment. So that is a $2 million investment that is going to be leveraged, leveraged, leveraged.

We are going through a time when we have to cut spending, and I love when the Republicans lecture Democrats about that. Wait till you hear what goes on here. Guess which party was the only party that balanced the budget and created a surplus in recent memory. The Democrats, with Bill Clinton. So don't lecture us about how to balance budgets. We know how to do it. And guess what. We know how to do it while creating 23 million jobs. So I don't need to hear the lectures, because they are misplaced. Talk to yourself. You are the ones who didn't say a word when George Bush did a tax cut for billionaires and put it all on the credit card. Now you still want to extend those tax cuts and bleed the revenues.

I will not yield. I have stated that before, but thank you for asking.

Here is where we are. I have to reiterate so I don't lose my place. Under Bill Clinton, the Democrats balanced the budget, created surpluses and 23 million jobs. George Bush came in and he held a press conference--I saw a rerun of it last night--and said, we don't need surpluses. This money belongs to the American people. Well, he didn't say what he meant. He meant it belongs to rich people--superrich people who earn over a billion and over a million dollars. He gave away the store. Then he went to war--two wars--and put that on the credit card. My friends on the other side never once said, Gee, I can't raise the debt ceiling to pay the debt. They all voted to pay. Almost to a person, they all voted to raise the debt ceiling, and it was doubled from when Bill Clinton was in office. But now, after George Bush left a mess--a god-awful mess in the debt and the deficit, and he handed President Obama a $1.2 trillion deficit--all of a sudden they blame President Obama for all of this.

The American people get it. They do not buy that. They understand this. They are not happy where we are, and they shouldn't be, but they know where the problem started. You know why. Because you can't rewrite history. You could try, but those deficits and those debts--those numbers--are in the books. Unless you erase them, they will remain in the books. I don't care whether it is talking about Paul Revere's ride or the deficits, that is history.

Let me show the deficits we had when we were in control. We got it down to zero, and we got surpluses and created 23 million jobs. That all was erased when we entered a situation in the last couple of years of the Bush administration, where jobs were bleeding at 800,000 a month, 700,000 a month, credit was frozen, and the automobile industry was in the tank. President Obama took action, but this recovery is tough. It has been the worst recession since the Great Depression.

This is what I know. We can do this if we work together, dare I say it? We can adopt a framework that understands billionaires and millionaires don't need their tax cuts now. We can get some more revenues in here and cut the fat and cut the duplication and go after the people who don't pay the taxes they owe. We can end the war in Afghanistan and save $1 trillion over 10 years. I can come up with $4 trillion easily. Allow Medicare to negotiate with the drug companies for lower prices. How is that--$200 billion?

But, no, instead, there is demagoguery and there are attempts to bring down bills such as this--clean, nice bills that will do everything we know we need to do now--leverage our spare dollars, attract public investment, create jobs and create jobs. But, no, we are facing a host of amendments, and I don't find it funny. I find it sad that we cannot come together.

I have a city in California, a very fast-growing city in the Silicon Valley--San Jose. We got them, through this program, $3 million for the renovation and expansion of the Center for Employment Training. What do they do there? They teach skills so when there are certain job losses going on, we have people with these new skills. We increased that center's capacity by 860 students. We expanded access to a GED, so people who didn't finish high school could get their diploma. We taught them how to speak better, how to read better, and we taught them small business entrepreneurship. This is what we are expanding to new people.

This project is going to create 4,900 jobs and leverage $3 million in private investment. This project was one to one. It was $3 million in public investment, $3 million in private investment, with 4,900 new jobs predicted.

By the way, these are not earmarks. We have six regional offices and there are applications made for these grants. They are made by the EDA and it is under the Commerce Department.

On the west coast, in 2003--to prove some points here--EDA invested $1.8 million in the construction of a water and energy technology incubator in the Central Valley of California. For those who don't know the Central Valley, it is where you get a lot of your fruits and vegetables. They are struggling in this downturn. In 2003, according to EDA, the incubator has housed more than 15 entrepreneurs since it opened, and those entrepreneurs have obtained over $17 million in private capital and created jobs for the Central Valley. So

a $1.8 million investment in the construction of a more than 2,300 square foot incubator for a water and energy technology business, and look what happened. From that small investment, it attracted $17 million. That is a huge leverage--a huge leverage.

You all know Boeing Company. In order to help mitigate the Boeing Company's decision to reduce manufacturing jobs in Renton, WA, EDA invested $2 million in 2006 to help build infrastructure to serve the commercial redevelopment of a 42-acre former aircraft manufacturing site. The redevelopment has created a mixed-use campus used by businesses focusing on commercial services, high-tech and life sciences, and helped create 2,500 jobs.

In the Midwest--I talked about this yesterday--in the city of Duluth, MN, they did something terrific there. They gave a grant of $3.5 million, matched by a city grant of $2.3 million, and they set up this aviation business--the Duluth Aviation Business Incubator at the Duluth Airport. This investment helped a company named Cirrus Aircraft grow from a handful of employees to a thousand employees by 2008. This incubator is now leased to Cirrus Design Corporation, which has the largest share of the worldwide general aviation market.

What we are talking about here is planting a seed of economic development, and that seed attracts more seeds from the private sector, from the local people, from the nonprofits. At the end of the day, what have we done by that little seed? It has grown. And this has been happening since 1965 when this program was created.

By the way, you will be shocked to know it was authorized at the same amount of money in 1965--$500 million. So the fact is this isn't a program that has grown and grown; it has stayed the same. That means, if you put inflation into the equation, it has been dramatically cut to a tiny part of what it once was for the country, but it is a beautiful part of our economic growth.

What do we need today? Jobs. What is the second thing we need? Jobs. And what is the third thing we need? Jobs. I am not amused by 27, 28, 29, 30 amendments, some of which have nothing to do with what we are talking about.

One of my friends on the other side of the aisle has an amendment that is pending to repeal banking reform--everything we did and worked on. I guess he wants to go back to the days when the banks got bigger, bigger, gambled with our money, and we almost lost capitalism in this country. OK, that is his right. Why is he doing it on this bill, without a hearing?

Another colleague has an amendment to end the regulations, I say to my friend, that protect the health and safety of the people. Not one hearing on it.

I think the American people have to wake up, so I am saying: Wake up, America, today. Wake up and pay attention to what is happening.

We have a bill on the Senate floor that is meant to do one thing-- create jobs in areas that have been hard hit by this bad economy. Why are the Republicans stalling it, hurting it, putting forward amendments that have nothing to do with it? We have to ask that question. They voted for it under George Bush unanimously, the same program. They voted for it nearly unanimously out of our committee, I say to my friend who is a senior member and a great chairman of the subcommittee on our committee--they voted for it. Now they are delaying it and offering all these poison pill amendments to it.

This is the second time they have done it. America, you have to wake up. It is the second time they have done it. They did it to the small business bill. They hurt small business. They are doing it to this bill. They are hurting job creation, and they are hurting small business again, and they are hurting big business. I said before, one of the provisions helped Boeing.

Maytag, there is another company you know the name of. In 2007 the Maytag plant, headquartered in Newton, IA, which employed 1,800 factory workers, was closed. By 2008 the city identified two new manufacturing operations that could be located on the old site: TPI Composites, a wind turbine blade manufacturer, and Trinity Structural Towers, a manufacturer of massive steel towers for windmills.

Can I ask my friend if he would like some time on this? I am going to continue telling the Maytag story. When I finish, I am going to turn to a very important member of the committee, Senator Cardin, for some remarks.

EDA invested $580,000 in 2008 for grading, site preparation, and surfacing for a wind tower storage facility that was leased to Trinity. That $580,000 attracted $21 million in public investment. That same year we saw other investments in Iowa.

I am going to stop and yield the floor so my friend can ask unanimous consent that he be recognized.

Right now we are on the bill.