A bill to prohibit the provision of Federal funds to State and local governments for payment of obligations, to prohibit the Board of Governors of the Federal Reserve System from financially assisting State and local governments, and for other purposes.

Mr. President, I stand today to discuss and strongly support my bill, S. 101, the State and Local Government Bailout Prevention Act. I urge all of us to unite to pass this bill

expeditiously. Let me briefly explain what it is about.

I first introduced this bill in early 2011, February 2011, because two things were happening. First of all, several significant State and local entities were teetering on the verge of bankruptcy. At the same time, the Federal Government--things in Washington--was in a horrible state fiscally, such that we could clearly not afford to take on more spending, more debt, more responsibility. I wanted to pass legislation that would make it crystal clear that neither we, the Congress, nor the Treasury Department, nor the Federal Reserve, nor any other Federal entity was going to bail out State or local governments that had acted irresponsibly and tipped into bankruptcy.

Things have not gotten better since then. In fact, in many ways things have gotten worse, and very recently, just in the last few weeks, the city of Detroit filed for bankruptcy--the largest municipal bankruptcy in U.S. history. Other large States and local communities are teetering on the verge of bankruptcy. Many States are in a horrible fiscal situation, such as California and Illinois.

Meanwhile, we are not in a fundamentally more sound place here in Washington at the Federal level. Even if we stick to the Budget Control Act numbers--and that is very much up in the air, but even if we stick to those numbers, Congress will spend $967 billion in discretionary money this year, and that will result in a $810 billion deficit--almost a $1 trillion deficit this year.

This Nation, total, is almost $17 trillion in debt. The balance sheet of the Federal Reserve has swollen from $800 billion in August of 2007 to over $3.5 trillion today.

Now more than ever, S. 101, the State and Local Government Bailout Prevention Act, is appropriate, is needed. That is why I come to the floor today to urge expeditious passage of S. 101. This bill is very simple, basic, straightforward, but important. It would simply do four things: First, it would prohibit the use of Federal funds to bail out State and local government budgets. Second, it would prevent the Federal Reserve from providing assistance to or creating a facility to help, again, State and local governments in a bailout situation. Third, it would prevent Congress and the Treasury Department from bailing out State and local governments. Fourth, there is specific language so we do not create any confusion that this is not intended to stop or deter or interfere with appropriate assistance in declared disaster areas.

That is the sum and substance of S. 101, the State and Local Government Bailout Prevention Act. When you look at situations such as Detroit--the largest ever municipal bankruptcy--and when you look at our fiscal situation in Washington at the Federal level, this clear bar of the Fed bailing out State and local governments is very much needed.

I ask unanimous consent that the Committee on Banking, Housing, and Urban Development be discharged from further consideration of S. 101 and the Senate proceed to its immediate consideration and that the bill be read a third time and passed and the motion to reconsider be considered made and laid upon the table.

Mr. President, I appreciate the two Senators from Michigan being the only ones on the floor right now objecting and saying this has nothing to do with Detroit, but, of course, it does.

I am very sorry to hear this objection. There is no objection on the Republican side. Of course there would be an objection if, in fact, this legislation would bar normal Federal grants and normal Federal loans unrelated to a bailout of a State or a municipality in bankruptcy mode, but it doesn't do that.

The legislation is very specific and very targeted. It is about a bailout of a State or locality in bankruptcy mode, and that is what it is about. It is not about normal routine Federal funding, and that is why there is no Republican objection.

One of the distinguished Senators from Michigan makes the point that Detroit has not formally asked for a bailout. That is true so far. But when the mayor talked to the Wall Street Journal about this, he ``left the door open for a Federal bailout after the city's bankruptcy filing.'' When asked directly whether Detroit would seek a Federal bailout, Mayor Bing said, ``Not yet.''

Similarly, the Governor of Michigan Rick Snyder didn't support a bailout but said on CBS's ``Face the Nation:'' ``If the Federal Government wants to do that, that's their option.'' That is not exactly not opening the door and considering that opportunity.

Again, I didn't file this bill in the last 2 weeks. I originally filed this bill in February of 2011. Unfortunately, Detroit isn't the only municipal or State bankruptcy on the maps. States can't formally file bankruptcy, but in laymen's terms they can essentially go bankrupt. Detroit is not the only issue on the map. Many States face a horrible fiscal situation as well, such as California and Illinois. There is a real danger of these States and localities seeking a Federal bailout. This bill is about that. It is not about normal Federal funding. It is not about the safe and secure rural schools program. It is not about any of that routine stuff. It is about a bailout of a State. It is about a bailout of the municipality or other local jurisdiction. Of course, Detroit, unfortunately, is the most obvious example after its historic bankruptcy filing very recently.

Again, I am sorry to hear their objection. I am sorry the two Senators from Michigan are here on the floor about this. I don't think that is a coincidence because this is a bill about bailouts. I think we should pass it, and be very crystal clear at the Federal level that we are not going to take on that bailout role and responsibility.

I yield the floor.

Mr. President, I support the nomination of Raymond T. Chen, to be United States Circuit Judge for the Federal circuit. This is the 29th judicial confirmation this year. With today's confirmation, the Senate will have confirmed 200 lower court nominees; we have defeated two. That's 200 to 2. That is an outstanding record. That's a success rate of 99 percent.

We have been doing that at a fast pace. During the last Congress, we confirmed more judges than any Congress since the 103rd Congress, which was 1993 to 1994.

So far this year, the first of President Obama's second term, we've already confirmed more judges than were confirmed in the entire first year of President Bush's second term. At a similar stage in President Bush's second term, only 10 judicial nominees had been confirmed. We are now at a 29-to-10 comparison with President Obama clearly ahead of where President Bush was. And, as I said, we have already confirmed more nominees this year--29--than we did during the entirety of 2005, the first year of President Bush's second term, when 21 lower court judges were confirmed.

With regard to hearings, the record shows that President Obama is being treated much better than President Bush during his second term.

Last week we held the 11th judicial nominations hearing this year. In those hearings we we have considered a total of 33 judicial nominees. Compare this favorable treatment of President Obama during the beginning of his second term versus the first year of President Bush's second term. At this stage in President Bush's second term, the Committee had held not 11 hearings with 33 judicial nominees, but only 3 hearings for 5 nominees, and all of those were hold-overs from the previous Congress.

In fact, for the entire year of 2005, Senate Democrats only allowed 7 hearings for a grand total of 18 judicial nominees.

It is hard to believe, but no nomination hearings on judicial nominees were held during April, May, June, or July. Four months with no judicial nomination hearings. Yet, we recently rushed through hearings on nominees to the DC Circuit Court of Appeals, plus a number of District nominations. In fact, in just the last few weeks, we have held hearings for 14 judicial nominees. That's not very far behind the entire output of 2005--7 hearings, 18 nominees.

Again, we have already exceeded that number--11 hearings and 33 judicial nominees. The bottom line is that the Senate is processing the President's nominees exceptionally fairly.

President Obama certainly is being treated more fairly in the first year of his second term than Senate Democrats treated President Bush in 2005. It is not clear to me how allowing more votes and more hearings than President Bush got in an entire year amounts to ``unprecedented delays and obstruction.'' Yet, that is the complaint we hear over and over from the other side. So I just wanted to set the record straight-- again--before we vote on this nomination.

Raymond T. Chen is nominated to be United States Circuit Judge for the Federal circuit. He received his B.S. from the University of California, Los Angeles, in 1990 and his J.D. from New York University School of Law in 1994. Upon graduation, Mr. Chen worked at Knobbe, Martens, Olson & Bear in California from 1994 to 1996. As an associate, he drafted district court briefs and legal memoranda on specific patent and trademark issues as well as several patent applications spanning various technologies.

In 1996, Mr. Chen joined the senior technical assistant's office at the Federal circuit in Washington as one of three technical assistants. There, he researched and wrote memoranda, commenting on drafts of court opinions for both legal and technical accuracy as well as identification of conflicting legal precedent, occasionally writing for individual judges.

From 1998 to 2008, Mr. Chen served as an associate solicitor in the Office of the Solicitor at the United States Patent and Trademark Office. During that time, he was first or second chair on several dozen Federal Circuit briefs defending the agency's patent and trademark decisions, and he presented approximately 20 arguments in the Federal Circuit.

He regularly appeared in district court defending the agency against lawsuits brought under the Administrative Procedure Act. He was also a legal advisor on several patent policy and legal issues within the agency, occasionally prosecuting patent attorneys in administrative proceedings for violating the agency's code of professional responsibility.

In 2008, Mr. Chen became the Deputy General Counsel of Intellectual Property Law and Solicitor. There he supervises other lawyers in the Solicitor's Office and has presented oral arguments in some of the seminal patent cases before the Federal circuit.

In addition, Mr. Chen deals with higher-level patent and trademark policy issues within the agency. He also coordinates the determination of what positions the United States should take as an amicus in intellectual property cases before both the Supreme Court and the Federal circuit.

Lastly, Mr. Chen is responsible for the review and clearance of all new regulations and amendments to existing regulations for the Office of the Solicitor.

The ABA Standing Committee on the Federal Judiciary gave him a unanimous ``well qualified'' rating.

I ask my colleagues to vote for this nomination.

Mr. President, I too object to the unanimous consent request. While the sponsor says it is aimed at bailouts, no one I know of is seeking a bailout from the communities that would be impacted. Despite the stated intention, the effect of this bill is to endanger the financial health of hundreds of cities and counties in every corner of this country. It would weaken the safety and security of countless Americans who call those communities home. I don't know of anyone seeking a bailout. Yet bailout is the word that is used frequently here by the sponsor of this legislation.

What is the definition? Communities at risk of defaulting. Hundreds and hundreds of communities are ``at risk of defaulting.'' It is unclear what that means. But the strains on local governments in the last few years--particularly following the financial crisis we had--are real. To say that any community, city, or State, for that matter, that is at risk of defaulting is to be challenged in terms of getting regular support from the Federal Government.

This is not limited to loans. This bill affects grants as well as loans. In the words of the bill, ``grants and aid'' would be prevented. All sorts of Federal funding, in other words, besides those kind of actions of the Federal Government involving credit or reliance on credit of the donor or for repayment.

The Congressional Research Service says this, again, applies not just to loans but to grants as well. Why in Heaven's name would struggling communities--whether it is my hometown of Detroit or any other community in this country--be denied the ability to seek grants is beyond me. It is not limited to loans but grants as well. This bill goes way beyond the bailouts that no one is seeking and would have a severe impact on cities and towns across the country.

Standard & Poor's lists more than 250 securities offered by Louisiana municipalities that are below investment grade. One State has 250 communities with securities below investment grade, which presumably means there is a significant credit risk in those communities. Under this bill, are those communities not eligible to seek regular grants? I am afraid so, and that is not just me saying that. Again, that is from the CRS.

Finally, Senator Stabenow has made reference to a letter that we received from the National League of Cities, National Association of Counties, the United States Conference of Mayors, and others, opposing this legislation because it goes way beyond its stated purpose of preventing bailouts.

Again, my town--and I don't know of any town that has--has not asked for a bailout. I am proud to have been living in Detroit all of my life. It doesn't need this kind of legislation poking at it to stop something from going to Detroit, which it has not applied for.

I know this legislation was introduced before this recent bankruptcy application on the part of the city of Detroit, but nonetheless to seek a unanimous consent in this context and in this moment to pass legislation--apparently without even a hearing--seems to me to be beyond the pale.

As a lifelong resident of Detroit, I oppose this proposal. I oppose it because thousands of municipalities that have suffered in the aftermath of the recent recession would be negatively affected. Our residents, their residents, our employees, their employees, and retirees around the country deserve better.

I yield the floor.

On line 7, page 1: ``Notwithstanding any other provision of law''--and then after talking about Federal funds not being used to purchase or guarantee obligations, it then says:

no Federal funds may be used . . . or provide direct or

indirect grants-and-aid, to any State government, municipal

government, local government, or county government which, on

or after January 26, 2011, has defaulted on its obligations.

It is very clear. It is line 7, page 1, and lines 1 and 2 on page 2: ``direct or indirect grants-and-aid to'' may not be provided to any city which has defaulted on its obligations. This is the language of the bill.

It also says on line 12 of page 2 that the funds of the United States may not be used ``to assist such government entity.'' ``Assist any such government entity.''

Hundreds of governments would be covered by this legislation. It is no coincidence that the Senators from Michigan are here on the floor because we are the most current victims of this language if it were ever passed. There are hundreds of others who would be victimized by this language because of its breadth, and that is what the Senator from Oregon was very dramatically pointing out.

Mr. President, I ask unanimous consent that the language from the bill be printed in the Record at this time.

Mr. President, I too join with our colleague from Oregon in raising great concern about what this proposal would do. This is a proposal--we have seen, actually, three of them now--that would cut all Federal funding for any community that has either defaulted or, more important, is at risk, has problems financially. What does that mean? It means that any city, any county, any local unit of government that is struggling with a tight budget could potentially lose all Federal funding. We are not talking about a bailout here. We are talking about the same Federal funds that go to every community--no funding for emergency services such as police departments and fire departments; no funding for transportation, for roads and bridges; cutting off funding for special education and for our schools; no funding for economic development to help these communities that are challenged because of, possibly, economic circumstances such as a shifting manufacturing base or other economic issues beyond their control.

This is extremely broad. According to some legal definitions, ``default'' could mean anything--late payments on any kind of an obligation. It makes absolutely no sense.

Let me also indicate that one of the real concerning problems here is that it would exempt emergency spending for a natural disaster. I appreciate that the Senator from Louisiana would want to do that given the fact that we had Hurricane Katrina hit in New Orleans and our whole country came together. People in Detroit raised money to help with Hurricane Katrina. But I suggest that for the 41 cities and counties that filed bankruptcy over the last 20 years or the hundreds from Texas, to Kentucky, to Alabama, and beyond who now have troubled bond ratings and are considered at risk--this is really a slap in the face to every city and community across our country.

This is not about stopping a bailout for Detroit. We are working hard. People are coming together. This is a community that is coming back thanks to a tremendous amount of grit, hard work, and leadership from the business community, religious community, community leaders, and so on. This is about whether we are going to support communities that need some help.

Think about this: If a city is doing well and has a wealthy tax base and an upper middle-income community with high-powered lobbyists, then they should get Federal money--taxpayer money? Children with disabilities can get special education. We are going to help build roads and bridges in communities. But if a community is having some financial difficulty, then, unfortunately, we would say we would not allow the same ordinary Federal funding every community gets to be available for that community. That is not the right values for America.

That is why the International City/County Management Association, the National Association of Counties, the National League of Cities, the U.S. Conference of Mayors, the Government

Finance Officers Association strongly oppose this effort.

I have one final statement to make before turning to our distinguished senior Senator from Michigan.

When we are looking at what is happening right now in Detroit and around the country, once again we are seeing workers and retirees on the frontline who have lost their pensions and their wages. In the auto rescue, we saw Delphi retiree pensions were not protected. Now in the city of Detroit, police, fire, and city workers are not protected. So when we talk about the middle class of this country--people working hard every day--we need to put them first. We need to make sure nobody loses their pension. We need to make sure we stand as a country with cities that are in distress and working hard to become vibrant and strong again.

I yield the floor.

Mr. President, I object.

Mr. President, I will be very clear. First, I say to my colleague from Louisiana, he and I have worked together often on a whole host of issues. He is on Environment and Public Works; I chair Energy. I want him to know I am happy to continue working with him on this and other issues. The reason I have to object at this time is that the language as it is written would deal a huge body blow to more than 700 rural and heavily forested counties across the country in more than 40 of our States. It, in effect, could prohibit payments under the Secure Rural Schools and Community Self-Determination Act.

This legislation, which was a bipartisan bill--Senator Larry Craig and I authored this legislation--is a lifeline for these hard-hit rural communities that are walking on a tightrope. They are trying to balance, for example, how they are going to keep the schools open and how they are going to have law enforcement in their communities. Declining revenues from Federal forests spurred the creation of this program to compensate for the loss of receipts from the Federal forests. Suffice it to say that without this legislation we could have school perhaps 3 days a week in a big chunk of rural America. I mentioned law enforcement. The question of how you maintain 24-hour law enforcement in a lot of these areas has been drawn into question. I think that without this assistance we might have some counties facing bankruptcy.

Given the fact that this language does not clarify the status of the Secure Rural Schools Program, I have to object. I am going to continue to object until the legislation does clarify that it will not prohibit payments under that legislation, which is a lifeline for rural America.

We have had a number of recorded votes on that particular legislation here in the Senate. It has received overwhelming bipartisan support. It was authorized on a bipartisan basis.

I am going to yield the floor. I know colleagues want to speak on this issue. I want it understood how concerned I am about the legislation in its present form. That is why I have to object at this time.

I yield the floor.