Floor Statements

Mr. President, I ask unanimous consent that when the Senate resumes consideration of S. 181, the Lilly Ledbetter Fair Pay Act, on Thursday, January 22, there be up to 60 minutes of debate equally divided between Senator Hutchison and Senator Mikulski or their designees on the Hutchison amendment No. 25 prior to a vote in relation to the amendment; further, that no amendment be in order to the Hutchison amendment prior to the vote.

Mr. President, I ask unanimous consent that when the Senate completes its business today, it stand in adjournment until 9:30 a.m., Thursday, January 22; that following the prayer and pledge, the Journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day, and there then be a period for the transaction of morning business for up to 1 hour, with Senators permitted to speak for up to 10 minutes each, with Republicans controlling the first 30 minutes and the majority controlling the final 30 minutes; that following morning business, the Senate resume consideration of S. 181, the Lilly Ledbetter Fair Pay Act, as under the previous order.

Mr. President, the first vote of the day will begin around 11:30 a.m. That vote will be in relation to the Hutchison amendment.

Mr. President, if there is no further business to come before the Senate, I ask unanimous consent that it stand adjourned under the previous order.

Madam President, I have an amendment at the desk, and I ask for its immediate consideration.

Madam President, I ask unanimous consent that the reading of the amendment be dispensed with.

Madam President, let me be very frank. While the bailout package we are dealing with tonight is far better than the absurd proposal that was originally presented to us by the Bush administration--which, if you can believe it, would have given the Secretary of the Treasury a blank check to spend $700 billion in any way he wanted, without any transparency, without any oversight, and without any judicial review--this bill, far better than that, is still short of where we should be. And I want to thank Senator Dodd and others for their very hard work in improving this legislation. But in my view, this bill is still not good enough. It should be rejected by the Senate, unless an amendment I am about to offer is passed.

This country faces many serious problems in the financial market, in the stock market, and in our economy. We must act, but we must act in a way that improves the situation. We can do better than the legislation we are dealing with tonight.

This bill does not effectively address the issue of what the taxpayers of our country will actually own after they invest hundreds of billions of dollars in toxic assets.

This bill does not effectively address the issue of oversight, because the oversight board members were hand picked from the Bush administration.

This bill does not effectively deal with the issue of foreclosures, and addressing that very serious issue which is impacting millions of low- and moderate-income Americans in the aggressive, effective kind of way we should be.

This bill does not effectively deal with the issue of executive compensation and golden parachutes. Under this bill, the CEOs and the Wall Street insiders will still, with a little bit of imagination, continue to make out like bandits.

This bill does not deal at all with how we got into this crisis in the first place and the need to undo the deregulation fervor which created trillions of dollars in complicated and unregulated financial instruments, such as credit default swaps and hedge funds.

This bill does not address the issue that has taken us to where we are today, the concept of ``too big to fail,'' the need for taxpayers to bail out institutions which are so large that they will cause systemic damage to our entire economy if they go bankrupt. In fact, within the last several weeks we have sat idly by and watched gigantic financial institutions such as the Bank of America swallow other gigantic financial institutions such as Countrywide and Merrill Lynch.

Who is going to bail out the Bank of America if it begins to totter? Not one word about the issue of too big to fail in this legislation, at a time when that problem is, in fact, becoming even more serious. This bill does not deal with the absurdity of having the fox guarding the henhouse. Maybe I am the only person in America who thinks so, but I have a hard time understanding why we are giving $700 billion to the Secretary of the Treasury, who is the former CEO of Goldman Sachs, which, along with other financial institutions, actually got us into this problem. Maybe I am the only person in America who thinks that is a little bit weird, but that is what I think.

This bill does not address the major economic crises we face--growing unemployment, low wages, and the need to create decent-paying jobs, rebuilding our infrastructure, and moving us

to energy efficiency and sustainable energy.

On top of all that, there is one issue that is even more profound and more basic than everything else that I have mentioned, and that is, if a bailout is needed, if taxpayer money must be placed at risk, whose money should it be? In other words, who should be paying for this bailout which has been caused by the greed and recklessness of Wall Street operatives who have made billions in recent years? That is what my amendment is all about. It is an issue that we have to bring to the floor of the Senate because that is what the American people want to hear discussed.

The American people are bitter, they are angry, and they are confused. Over the last 7 years since George W. Bush has been President, 6 million Americans have slipped out of the middle class and are in poverty. Today, working families are lining up at emergency food shelves in order to get the food they need to feed their families. Since President Bush has been in office, median family income for working-age families has declined by over $2,000; 7 million Americans have lost their health insurance; 4 million have lost their pensions; consumer debt has more than doubled; and foreclosures are the highest on record.

Meanwhile, the cost of energy, food, health care, college, and other basic necessities has soared. While the middle class has declined under President Bush's reckless economic policies, the people on top have never had it so good. For the first 7 years of Bush's tenure, the wealthiest 400 individuals in our country saw a $670 billion increase in their wealth. At the end of 2007 they owned over $1.5 trillion in wealth. That is just 400 families--$670 billion increase in wealth since Bush has been in office.

In our country today we have the most unequal distribution of income and wealth of any major country on Earth, with the top 1 percent earning more income than the bottom 50 percent, and the top 1 percent owning more wealth than the bottom 90 percent. We are living at a time when we have seen a massive transfer of wealth from the middle class to the very wealthiest people in this country; when, among others, CEO's of Wall Street firms receive unbelievable amounts in bonuses, including $39 billion in bonuses in the year 2007 alone for just the five major investment houses.

We have seen the incredible greed of the financial service industry manifested in the hundreds of millions of dollars they have spent on campaign contributions and lobbyists in order to deregulate their industry so hedge funds and other unregulated financial institutions could flourish. We have seen them play with trillions and trillions of dollars in esoteric financial instruments in unregulated industries which no more than a handful of people even understand.

We have seen the financial services industry charge 30 percent interest rates on credit card loans and tack on outrageous late fees and other costs to unsuspecting customers. We have seen them engaged in despicable predatory lending practices, taking advantage of the vulnerable and the uneducated. We have seen them send out billions of deceptive solicitations to almost every mailbox in America.

I used to think that my home was the only one that was receiving them. It turns out that billions of other solicitations went out to probably every home in America. What they hoped to do was to gain new customers for credit card companies and then, through the very small print on the back of the solicitation, have the opportunity, have the ability to monkey around with interest rates so when people thought they were getting zero interest or 2 percent, it turns out that a few months later they were paying very high interest rates.

Most important, of course, we have seen the financial services industry lure people into mortgages they could not afford to pay, which is one of the basic reasons we are tonight in the midst of all of this. We have a bailout package today which says to the middle class that you are being asked to place at risk $700 billion, which is $2,200 for every man, woman, and child in this country. You are being asked to do that in order to undo the damage caused by this excessive Wall Street greed. In other words, the ``Masters of the Universe,'' those brilliant Wall Street insiders who have made more money than the average American can even dream of, have brought our financial system to the brink of collapse, and now, as the American and world financial systems teeter on the edge of a meltdown, these multimillionaires are demanding that the middle class, which has already suffered under Bush's disastrous economic policies, pick up the pieces they broke.

That is wrong and that is something I will not support. The major point I want to make this evening is, if we are going to bail out Wall Street, it should be those people who have caused the problem, those people who have benefited from Bush's tax breaks for millionaires and billionaires, those people who have taken advantage of deregulation-- those people are the people who should pick up the tab and not ordinary working people.

I have introduced an amendment which gives the Senate a very clear choice. We can pay for this bailout of Wall Street by asking people all across this country, small businesses on Main Street, homeowners on Maple Street, elderly couples on Oak Street, college students on Campus Avenue, working families on Sunrise Lane--we can ask them to pay for this bailout. That is one way we can go or we can ask the people who have gained the most from the spasm of greed, the people whose incomes have been soaring under President Bush, to pick up the tab. They threw the party, they became drunk on greed, and now I believe they should foot the bill. What my amendment proposes is quite simple. It proposes to raise the tax rate on any individual earning $500,000 a year or more, or any family earning $1 million a year or more, by 10 percent. That 10-percent increase in the tax rate from 35 percent to 45 percent will raise over $300 billion in the next 5 years; $300 billion is almost half the cost of the bailout.

If what all the supporters of this legislation are saying is correct, that the Government will get back some of its money when the market calms down and the Government sells some of the assets it has purchased, this amount of $300 billion should be sufficient to make sure 99.7 percent of taxpayers do not have to pay one nickel for this bailout.

Most of my constituents did not earn a $38 million bonus in 2005 or make over $100 million in total compensation in 3 years, as did Mr. Henry Paulson, current Secretary of the Treasury and former CEO of Goldman Sachs. Most of my constituents did not make $354 million in total compensation over the past 5 years as did Richard Fuld, the CEO of Lehman Brothers.

Most of my constituents did not cash out $650 million in stock after a $29 billion bailout for Bear Stearns, after that failing company was bought out by JPMorgan Chase. Most of my constituents did not get a $161 million severance package as E. Stanley O'Neil, former CEO of Merrill Lynch, did.

Last week, I placed on my Web site, sanders.senate.gov, a letter to Secretary Paulson in support of the content of my amendment--which was pretty simple. It said that it should be those people best able to pay for this bailout, those people who have made out like bandits in recent years--they should be asked to pay for this bailout. It should not be the middle class.

To my amazement, and I am a Senator from a small State--to my amazement some 48,000 people--and here they are, these are their names, and I will not read them all off, 48,000 people have already cosigned this petition, and the names keep coming in and the message is very simple: We had nothing to do with causing this bailout. We are already under economic duress. Go to those people who have made out like bandits. Go to those people who have caused this crisis and ask them to pay for the bailout.

The time has come to assure our constituents in Vermont and all over this country that we are listening and understand their anger and their frustration. The time has come to say that we have the courage to stand up to all of the powerful financial institution lobbyists who are running amok, all over this building--from the Chamber of Commerce to the American Bankers Association to the Business Roundtable--all of these groups who make huge campaign contributions, spend all

kinds of money on lobbyists--they are here, loudly and clearly. They don't want to pay for this bailout. They want Middle America to pay for it.

So this is a moment of truth. I hope very much that this Senate will support the amendment I have offered.

Madam President, I reserve the remainder of my time.

Mr. President, this bailout, caused by Wall Street's greed and irresponsibility, may cost as much as $700 billion. The simple question is: Who is going to be paying for it?

Today, in America, the top 1 percent earn more income than the bottom 50 percent. The top 1 percent have more wealth than the bottom 90 percent. Since President Bush has been in office, the middle class has seen a significant decline in their standard of living while the top 400 individuals have seen a $670 billion increase in their wealth.

What this amendment does is impose a 10-percent surtax on a household that makes $1 million a year, which raises over $300 billion in 5 years. Under this amendment, the bottom 99.7 percent of Americans will not pay 1 penny for this bailout.

The middle class has had nothing to do with causing this crisis. They should not have to pay for it, and I ask for a ``yes'' vote on this amendment.

Mr. President, earlier this week I placed on my Web site--

sanders.senate.gov--a letter to Secretary Paulson, and I asked people who shared the sentiments of that letter to sign a petition. Essentially, kind of boiling it down, what the petition says is that at a time when the middle class is shrinking, and millions of working people are struggling to keep their heads above water; at a time when Bush's economic policies have done so much harm to so many people--6 million people have left the middle class and gone into poverty; over 6 million people have lost their health insurance, millions have lost their pensions--it does not make a lot of sense for the middle-class and working families, who had nothing to do with causing this financial meltdown, to be asked to go substantially more in debt--to the tune of $2,200 per person or $9,000 for a family of four. It is not fair; and that, in fact, if a bailout is necessary, it should be the people who have caused the bailout, the people who have benefitted from Bush's economic policies, who should put their money at risk and not the middle class.

As you well know, since President Bush has been in office, there has been a massive transfer of wealth from the middle class to the top 1 percent. We have a situation where the top 400 individuals in America today, since Bush has been in office, have seen an increase in their wealth of $670 billion at a time when the middle class is shrinking. What the petition says in so many words is those are the people, not working families, who should pay the costs of the bailout.

I was amazed at the kind of response we received. As of now, we have over 37,000 signatures on a petition to Secretary Paulson and President Bush which says: Your friends, the people who have made out like bandits under your reckless economic policies, should pay for this bailout, not working families.

What I would like to do now is--in addition to these 37,000 signatures on the petition, my office has received thousands of e-mails and phone calls, mostly from Vermont but sometimes from other States as well. What I think would be appropriate and refreshing here in the Senate is, rather than people hearing my point of view, I think it would be a good idea just to read a few of the e-mails I have been receiving from the State of Vermont as to how ordinary people are responding to President Bush's bailout proposal.

Let me start with an e-mail I received from a small town in northern Vermont, Fairfield, VT:

Dear Senator Sanders, this e-mail and words themselves

cannot express the dismay and disbelief I feel about the

current Wall Street crisis and proposed bailout. After

pulling down 6, 7, and 8-figure bonuses for flying their

respective companies into the ground, these Wall Street

geniuses then pulled their golden parachutes and leave it up

to the taxpayers to clean up the mess and pay their bills.

Unbelievable, just unbelievable.

And to make a bad situation tragic, due to the ever-

escalating Federal deficit, the bill will be paid by my

children and grandchildren.

I wish I had a solution to offer you but I don't. All my

life I have strived to live within my means and pay my debts.

I guess the joke is on me--except I feel more like crying,

than laughing. Unbelievable.

This is from Springfield, VT, a town in southern Vermont:

Hold fast, Bernie. It took a long time for the banking

crisis to develop; don't be pressured into capitulating to a

half-baked solution. I'm among the Americans outraged at the

undisciplined, arrogant, reckless nature of the markets. Many

of us have been quietly toiling away on our workaday jobs and

now our wages--our fiscal support of the Federal Government--

are all that's between Wall Street and economic free fall.

Keep reminding them of who is finally paying the price for

that avarice.

This is from Chester, VT:

I may not always agree with you on every topic, but I most

certainly agree with you on opposing the current (or any

future) bailout for private corporations.

If I could ask you to share a message with your peers, it

would be this: You do not have my permission to take any--

any--not so much as a single near worthless penny--of my

hard-earned money to reward the people who have mismanaged

their businesses.

Senator Sanders, thank you for opposing this bailout

package.

From Rupert, VT:

We are absolutely sickened by the prospect that honest,

hard-working, fiscally responsible middle class Americans

will have to foot the bill for the Wall Street bailout. While

we realize that something must be done to prevent further

damage, we have a problem knowing that the very people who

caused the problem will literally sail off into the sunset on

their yachts. Some type of strictly defined framework must be

established to protect our tax dollars from being further

pilfered by the greedy denizens that are at the center of

this crisis. Also, what about some accountability for what

has already been done? What about being forced to pay back

the obscene bonuses and salaries earned in the course of this

unprecedented example of unscrupulous pillaging.

So many Vermonters are struggling to provide their families

with the basics right now. It's hard to imagine how something

as far-reaching as this crisis could have happened. Yeah,

let's hand over the Social Security next.

Please do what you can to insist that the bailout be done

with strict oversight.

Waterbury, VT:

Senator Sanders, you and I may seem to be very different.

You are the only one who calls himself a socialist in the

Senate. I am in favor of free markets and capitalism.

However, we can agree on one thing. The privatization of

profits and the socialization of losses is immoral and wrong.

To bail out the well-connected on Wall Street, those who

thrive on government regulations and monetary policy, is

unconscionable. I urge you to reject the bailout of Wall

Street that Bush, Paulson and Bernanke propose.

From Richmond, VT:

Dear Bernie, my wife and I are both 65 years of age. We

both retired this past January. For the past 8 years we have

lived under one of the worst administrations in U.S. history.

This administration is now asking Congress, just a few weeks

shy of one of our most important national elections, to

approve a massive financial bailout without strong

protections for the American people.

As two people who have worked hard all of our lives and who

have saved for our retirement, we strongly urge you not to

get caught up in this panic attack and to ensure that you

give taxpayers strong protections before approving Henry

Paulson's bailout.

As always, we appreciate your support.

Newport, VT, right near, on the Canadian border:

Dear Bernie, thanks for all you do for Vermonters and the

Nation. I am sure that you know that if this bailout plan is

rushed through, it will make it that much more difficult for

the next administration to address our already dire problems,

such as education and health care.

Brattleboro, VT, which is the other end of the State, down in the south:

Please vote against any bailout of these investment

concerns that have made risky, unwise actions and now expect

us to cover their mistakes. The Bush administration began

with the Enron debacle and it now seems that scheme to

deprive hard-working Americans of their money is being

applied to the country as a whole.

Congress has already given away sizable authority to the

executive branch via the PATRIOT Act in the wake of 9/11. It

has no right to give the White House and its Secretary of the

Treasury the power to transfer the people's money to the

richest bankers in the country. Vote no on the bailout

legislation.

Burlington, VT, the largest city in the State, where I live:

We know that you are a leader in this and are very

appreciative. We are very concerned about the Bush

administration's proposed bailout legislation. We don't

believe that extremely wealthy investment bankers who engaged

in irresponsible, risky behavior deserve to be bailed out. We

would like to see you craft the support legislation that

provides relief to homeowners facing foreclosure and middle

class people about to retire, for example. Please do not

force middle class folks in general to pay for the efforts of

the wealthiest people among us to further enrich themselves.

We hope Congress will not rush to pass legislation that it

and the American people will regret for a generation.

St. Albans, VT, in the northern part of the State:

Senator Sanders, I know you are busy, but I just wanted to

express my opposition to the latest bailout of the mortgage

industry. While I don't want to see the economy crash and

burn, I also don't want to see the banks and bankers

responsible just be able to wash their hands and walk away

while leaving generations of Americans paying for their mess.

I feel if we need to purchase these bad debts, we should do

so in true venture capitalist fashion and offer pennies on

the dollar, just enough so that the banks don't fail but not

enough for them to show any type of profit. In addition,

there should be a proviso denying any officer of any of the

banks that accept this bailout any sort of bonus.

Mr. President, these are just a handful of the e-mails my office has received. I know my office is not alone. I don't know how many hundreds of thousands of these e-mails have come to Capitol Hill, but the number is enormous. I think what most of them are saying--what the vast majority of them are saying--is that after 8 years of Bush's economic policies which have benefited the wealthy and the powerful at the expense of the middle class, it

would be immoral, it would be absurd to ask the middle class to have to pay for this bailout.

I hope Members of the Congress will be listening to their constituents, will show the courage to stand up to the wealthy financial campaign contributors who have so much influence over what we do here and to say to the upper 1 percent: You are the people who have benefited from Bush's policies. You are the people who are going to have to pay for this bailout, not the middle class.

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

Mr. President, I wish to say a few words on the crisis about which everyone in America is talking. My phones, both in Vermont and here in Washington, have been bouncing off the hook with people who are outraged about the prospect of the middle class bailing out Wall Street. They are telling me: No way; we should not be doing that.

The current financial crisis facing our country should, in fact, put an end to almost any support for the extreme rightwing economic policies President Bush has been pursuing for the last 8 years and that, in fact, were pursued even before that.

These policies include, of course, huge tax breaks for the very rich under the guise that that money will trickle on down to ordinary people and create a prosperous nation. That certainly has not been the case.

Those policies include unfettered free trade, which says it is a good thing for corporate America to be able to throw American workers out on the street, move to China, and bring those products back into this country and run up what is now over a $600 billion-a-year trade deficit.

Last but not least, and pertinent to the great financial crisis we are facing right now--a crisis which many people believe is the most serious financial problem this country has had since the Great Depression of 1929--is the whole of deregulation, not only of financial services but of energy and many other sectors in our economy, under the guise that we should have great faith in large financial institutions, that they will do the right thing and that they will benefit the people of our country and, in fact, the world.

We have learned tax breaks for the rich do not filter down but make the rich richer. We have learned unfettered free trade costs us millions of good-paying jobs. We have learned that massive deregulation, allowing large financial institutions to do whatever they want to do under the radar screen, will only hurt our economy and maybe drive it to ruin.

In the midst of all this, it is important to understand what has been going on for ordinary people in this country. Since President Bush has been in office, nearly 6 million Americans have

slipped out of the middle class and into poverty all over this country. In Vermont, as I suspect in Rhode Island, working people are working two jobs; husbands and wives who were working are now reduced to going to emergency food shelves in order to buy groceries they need to take care of their families. Since George Bush has been President, the median family income for working Americans has declined by more than $2,000, a huge decrease in the income for the middle class. Since President Bush has been in office, more than 6 million Americans have lost their health insurance, over 4 million have lost their pensions, foreclosures are at an alltime high, consumer debt has more than doubled, and today we have a national debt which is almost $10 trillion, a debt we are going to be leaving to our kids and our grandchildren. That is what is happening to the middle class under these extreme rightwing economic policies.

But in terms of this debate about what we do with regard to the current financial crisis we are facing, it is also important to understand not only what is happening to the middle class and the decline of the middle class, it is also important to understand what is happening to the people on top, the wealthiest people in this country. The top one-tenth of 1 percent now earns more income than the bottom 50 percent of the American people: One-tenth of 1 percent, bottom 50 percent. The top 1 percent now owns more wealth than the bottom 90 percent. This country has the most unequal distribution of wealth and income than since just before the Great Depression in the 1920s.

Mr. President, the wealthiest 400 people in our country, since President Bush has been in office, have seen their wealth increase by $670 billion. Let me repeat that in case people are kind of scratching their heads because this is such an extraordinary number. The wealthiest 400 people--that is not a whole lot of people--in our country have seen their wealth increase by $670 billion since President Bush has been in office.

In the midst of all of that, while the rich become phenomenally richer, President Bush lowered taxes on the very wealthy so they are now paying lower income tax rates than teachers, nurses, policemen, firemen, than people in the middle class.

I raise that issue for a very simple reason. Secretary Paulson, representing the Bush administration, which year after year until a few months ago was telling us how robust and strong the economy was--I remember, as a member of the Budget Committee, having Secretary Paulson in front of us not very long ago telling us the economy was marvelous. Marvelous.

In late July of this year, President Bush himself said the foundations of the economy were strong. That was on July 31. So after having told us what most middle-class Americans knew instinctively to be wrong, having told us over and over again how strong the economy was, how robust the economy was, last week the Secretary of the Treasury basically said in so many words: I guess we made a slight mistake. The fundamentals are really not very strong. In fact, if we do not act on the largest bailout in the history of our country, and you in Congress can take a few days to respond, but if you do not act, there will be a financial meltdown not only in America but all over the world.

So year after year, until very recently, either because of incompetence and not understanding what was going on in the economy or perhaps dishonesty and not wanting to let the American people know what was going on in the economy, we were told everything was going well. Then they say: Oops, we made a slight mistake. Actually, we are on the verge of a major financial meltdown and we want Congress to accept a $700 billion bailout, and we do not want the Congress to discuss it very much. We do not want the Congress to change it very much. It has to act immediately because if it doesn't, terrible things will happen.

Well, when we talk about the reasons for the possible need of a bailout, we cannot minimize the incredible greed, the ugly greed we have seen among many of the wealthiest people in this country in the last few years, not least of all the people on Wall Street.

Let me give you some examples. In 2005, Henry Paulson, our now Secretary of the Treasury, was then the CEO of Goldman Sachs. He received, in 2005, a $38 million bonus. At that time, that was the largest bonus ever given to a Wall Street CEO.

In December of 2006, John Mack, the CEO of Morgan Stanley, broke Mr. Paulson's record by receiving a $40 million bonus--a bonus. This is on top of other forms of compensation.

Not to be outdone, Lloyd Blankfein, the new CEO of Goldman Sachs, received a $53 million bonus later that month. In 2007, 1 year ago, Mr. Blankfein, the CEO of Goldman Sachs shattered his own record by receiving a $68 million bonus.

In October of 2007, E. Stanley O'Neal, the former chief executive of Merrill Lynch--I think we all know what has happened to Merrill Lynch very recently--collected a severance package worth an estimated $161 million.

Angelo Mozilo, the former CEO of Countrywide--we know what happened to Countrywide--received a severance package of about $110 million. That was on top of $140 million in Countrywide stock that he sold off during 2006 and 2007. Mozilo was also paid $48 million in 2006.

In 2007, here is perhaps--when we talk about Wall Street greed and when we talk about Wall Street bonuses--the most outrageous fact out there, which is that in 2007 Wall Street's five biggest firms--Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley--paid out $39 billion in bonuses to themselves.

Wall Street investment bank bonuses are larger, just their bonuses, than the gross domestic products of Sri Lanka, Lebanon, or Bulgaria, and the average bonus--average--of $219,000 is more than four times higher than the median U.S. household income.

Why do I raise those issues and give those facts? I do that for a very simple reason; that is, I regard it as an outrage for anyone to suggest the middle class of this country, whose standard of living is going down, should be forced to bail out Wall Street when people on Wall Street have made huge amounts of money in recent years and, in general, as a result of Bush's reckless and irresponsible economic policies.

The wealthiest people have also done extraordinarily well. What President Bush would have us do is to say to the middle class that is sinking, you pay for the bailout caused by Wall Street's irresponsibility, and we do not have to ask them to do anything. They pay no price at all.

I regard that as an absolutely unacceptable outrage, something we must not allow to happen. I am open to other ideas on this issue, but for me, the bottom line on this bailout is that the middle class should not be paying. There are a number of ways we can go forward to protect the middle class. I have suggested a 5-year, 10-percent tax on incomes over $1 million a year for couples, and $500,000 for single taxpayers. That would raise more than $300 billion in revenue.

That begins the process of saying to the wealthiest people who have benefitted from Bush's reckless policies: You have to step to the plate, and this is not going to be on the middle class to provide the money for the bailout--this money, by the way, which is $2,200 for every woman, man, and child in this country and, a family of four, close to $9,000.

In addition, we have to ensure that assets purchased from banks are realistically discounted so companies are not rewarded for their risky behavior and taxpayers can recover the amount they pay for them.

Thirdly, we must require that the taxpayers receive equity stakes in the bailed-out companies so the assumption of risk is rewarded when a company's stock goes up. We are going to buy this stuff, and as stocks go up we should benefit from that. In addition, at a time when the middle class has so many serious problems; when people in my State and in the State of the Senator from Rhode Island are worried about how they are going to be able to heat their homes this winter; when millions of middle-class families are worried about how they are going to be able to send their kids to college; at a time when our infrastructure is collapsing, and we have the potential to create millions of jobs rebuilding our bridges, our roads, our rail systems; at

a time when we must move from fossil fuels to energy efficiency and sustainable energy and create large numbers of jobs in that area as well; we need a major economic recovery program which puts millions of Americans to work dealing with the many unmet needs facing our country.

In addition, to my mind, any serious piece of legislation dealing with this bailout must include language which undoes the damage caused by excessive deregulation. That means reinstalling regulatory firewalls that were ripped down in 1999. And, lastly--not lastly because I think many other people have other good ideas as well, but the last point that I want to make tonight is a very important point.

We are where we are today because of the doctrine of ``too big to fail.'' The assumption is that if we allow these huge institutions to fail, they take down the entire economy and virtually all of our people suffer.

I would respond to that in the future by saying that if an institution is too big to fail, that institution is too big to exist. I should tell you that I have serious concerns right now about the Bank of America swallowing up Countrywide, swallowing up Merrill Lynch. If they were to be teetering, does anyone have any doubt that there would have to be a massive bailout for that bank? But it is not only the Bank of America. I think we have to take a very hard look at these huge institutions, which, if they fail, could impact the entire economy. I think we need to start doing something that was talked about in the early part of the 20th century about breaking up these huge institutions.

There is a lot of work that has to be done in the near future. But for me, the bottom line is that at a time when the wealthiest people made out like bandits under Bush's reckless economic policies, while at the same time the middle class declined, it would be absolutely grotesque to ask the middle class of this country to pay for this bailout.

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

Madam President, I would like to focus on three aspects of the current economic and financial crisis that is wreaking havoc on tens of millions of working families throughout our country and, in fact, people throughout the world. I think the questions we have to deal with are, No. 1, how did this crisis develop; No. 2, what can we do in the short term to address it and to protect middle-class families--people who are scared to death all over our country about losing their 401(k)s, people who are worried about losing their jobs, people who can't afford health insurance today--and, No. 3, what can we do long term to learn from the mistakes of today so that we create an economy where this crisis never erupts again.

I think those are the areas we might want to be focusing on right now.

Madam President, we are here today in the midst of the most serious financial and economic crisis that our country has faced since the Great Depression of the 1930s primarily--primarily--because of one reason; and that is, over the last many years, especially in the last 8 years of President George W. Bush, government policy, government ideology has been dominated by an extreme rightwing position that tells us--and we have heard it over and over and over again on the floor of the Senate--that government is bad, government is evil, government has to get out of the way so we can allow large multinational corporations and the wealthiest people in this country to do all of the wonderful things they will do to create prosperity for all Americans.

Now, among specific policies, what President Bush and others of that view have said is it is important for us to give huge tax breaks-- trillions of dollars in tax breaks--to the wealthiest people and largest corporations in our country so they will then invest in America, create good-paying jobs, and their wealth will trickle on down. That is the trickle-on-down theory of economics.

In fact, my friend, Senator Kyl, who just spoke a moment ago, is the lead advocate, along with Senator McCain and many other Republicans, of the repeal of the estate tax that would provides $1 trillion in tax breaks over a 20-year period to the wealthiest three-tenths of 1 percent. Three-tenths of 1 percent receive $1 trillion in tax breaks. That is part of that ideology.

Further, what they have said is, we need to not worry about manufacturing in America because what we should establish is a policy of unfettered free trade. We don't need tariffs. What we need is to allow corporate America the freedom to throw American workers out on the street--people who are making 15, 20, 25 bucks an hour, health care, pensions--because somehow we are going to create wealth in America and good-paying jobs in America as we shut down plants, we move to China, and corporations there pay workers 20, 30 cents an hour, and we bring the products back into this country. Anyone who goes shopping in a mall knows how difficult it is today to find a product made in America, but that is a plus.

I have to say, in that regard, the champion--and he is honest on this one. Senator McCain has been criticized recently for not being the most honest candidate we have seen in terms of his answers and so forth, but he has been honest on this one. He has been the lead advocate of unfettered free trade. This is an important part of this rightwing ideology: that it is good for America that corporations can go to China and bring products back into this country. But the third pillar of this rightwing ideology that I want to discuss this afternoon, and perhaps the most pertinent to the crisis we are now facing, is over and over again what we have heard from President Bush, what we have heard from Senator McCain, what we have heard from many of our Republican friends is, deregulate, deregulate, deregulate; that the government has to get out of the way so that ExxonMobil and the other large multinational corporations can do all of the wonderful things they will do to create wealth in America.

I will just give one example. It is not a major example but a humorous example. All over this country, Madam President, parents who have little kids who play with toys have been worrying about the toys and the quality of the toys coming into this country. It was recently learned that at the Consumer Product Safety Commission, because of that ideology of deregulation, there was one guy, one person whose job it was to test all of the toys, thousands of different types of toys coming in from China and every other country in the world--many of them unhealthy, many of them having toxic ingredients in them. Because of deregulation, because we have great faith in these companies bringing toys in from China, we didn't even have to have a strong regulatory system. I am happy we have moved in that direction in the last few months, but that was the case.

The deregulation mantra goes obviously a lot deeper than toys. Let me focus for a moment on this issue of deregulation because it is at the heart of the current financial crisis we are facing. I want to say a word about the

former Senator who, it turned out, was the chief economic adviser to Senator McCain and who actually was the leader on deregulation.

I know in politics things change from yesterday to today. I have not heard Senator McCain's last pronouncement. I guess he wants to regulate everything today. But yesterday and in the rest of his career he was a champion of deregulation and his major economic adviser was a gentleman named Senator Phil Gramm, formally the Senator from Texas.

To review a little bit of what Senator Gramm's role was in pushing us toward this deregulatory society, as chairman of the Senate Banking Committee in 1999, Senator Gramm spearheaded legislation that bears his name. It is not a great secret, it is his legislation, the so-called *Gramm-Leach-Bliley bill, and that broke down critical regulatory safeguards the Government had put in place after the Great Depression to prevent--what? To prevent exactly what we are seeing today. Senator Gramm spearheaded that effort and broke down those firewalls.

Having laid the groundwork for our crisis in the financial sector, the very next year Senator Phil Gramm is credited--and I do not think there is a lot of debate about this--with slipping into a large unrelated bill legislation that deregulated the electronic energy markets, including, of course, oil. There are leading energy economists--who have testified over and over again just this week, among other committee hearings before Congress--who are telling us that as a result of the deregulation of the energy futures market, 50 percent of the cost of oil, when it was at its peak of $147 a barrel-- 50 percent of that was due to speculation and that speculation was allowed to take place because of the deregulation of the energy futures market spearheaded by Senator Gramm.

We are seeing what deregulation did to the financial institutions, what it has done to energy prices, but that is not enough. Senator Gramm was a very aggressive and a very effective, if I might say so, Senator. As we all know, the Federal Government is in the process of nationalizing AIG and bailing them out to the tune of $85 billion. AIG, as we all know, is the world's largest insurance company.

It also turns out that the AIG situation is closely tied to the same extremist ideology that has been pushing us toward economic disaster. A key part of the responsibility for AIG's collapse lies once again with this same key Member of the Senate, Senator Phil Gramm, and his rightwing ideology. It turns out that Senator Gramm slipped a 262-page amendment--I always find it amusing how you can ``slip'' a 262-page amendment--into a larger bill that was instrumental in creating, and I know this number is a little bit difficult for anybody in the world to digest, a $62 trillion market for very risky, unregulated financial investments called credit default swaps, that are central to AIG's meltdown.

This is extremely complicated. Very few people understand anything about it. But we are talking about an unregulated $62 trillion market for credit default swaps, which played a major role in the collapse of AIG and the fact that the Federal Government is now in the process of bailing that company out.

As an online article from Time Magazine explains, AIG's traditional insurance business was doing well. In other words, when they were in the business that they had historically been in, actually they did quite well. But what AIG got involved in was more than traditional insurance. They got involved in risky derivative schemes called credit default swaps, or CDSs, that allowed big companies to guarantee each other's risky lending practices. The point here in this whole complicated scheme of things is that all of this is deregulated primarily because of the efforts of Senator Gramm. The big, bad Federal Government no longer can protect consumers, can protect our economy because we are going to trust all of these guys who are playing in a $60-plus trillion business.

In order to give the American people a full understanding of the risks posed by these unregulated credit default swaps, I wish to quote briefly from a September 15 article by Professor Peter Cohen, a graduate of the Wharton School, that details the full scope of the problem we face and the role Senator Gramm had in its creation. Let me quote from Professor Cohen.

Lurking in the background of this collapse of two of Wall

Street's biggest names, is a $62 billion segment of the $450

trillion market for derivatives that grew huge thanks to John

McCain's chief economic advisor, Phil . . . Gramm. That's

because in December 2000, Gramm, while a U.S. Senator, snuck

in a 262-page amendment to a government reauthorization bill

that created what is now the $62 trillion market for credit

default swaps. I realize it is painful to read about yet

another Wall Street acronym, but this is important because it

will help us understand why the global financial markets are

collapsing. . . . CDSs are like insurance policies for

bondholders. In exchange for a premium, the bondholders get

insurance in case the bondholder can't pay. . . . In the case

of the $1.4 trillion worth of Fannie Mae and Freddie Mac

bonds, the Government's nationalization last Sunday triggered

the CDSs on those bonds. The people who received the CDS

premiums are now obligated to deliver those bonds to the ones

who paid the premiums.

Professor Cohen continues:

Gramm's 262-page amendment, dubbed the ``Commodity Futures

Modernization Act,'' according to the Texas Observer, freed

financial institutions from oversight of their CDS

transactions. Prior to its passage, they say, banks

underwrote mortgages and were responsible for the risks

involved. Now through the use of CDSs--which in theory insure

the banks against bad debts--those risks are passed along to

insurance companies and others . . .

wrote the Texas Observer. I will not go on.

The bottom line is Gramm, who is McCain's leading financial adviser, spearheaded the effort to deregulate financial services that opened up this huge unregulated market. The result of that has played a significant role in placing us where we are right now.

We can go on and on. This is complicated stuff and I am sure there are people who can talk about this for many hours. In my view, the time for hand wringing is over. What we have to understand is the efforts of President Bush to ``deregulate, deregulate,'' and those of Senator Gramm, Senator McCain and many others, was wrong. It largely contributed to where we are today.

It seems to me that Congress right now needs to put an end to this radical deregulation. We need to put the safety walls back up in the financial services market.

I was a member of the Banking Committee in the House in 1999 when this whole issue was discussed. Many of us then--a minority, but some of us then--saw exactly what was in line to occur. Some of us at least voted against it.

What we have to do now is understand that we need to reregulate the electronics energy markets, we need to end the unregulated credit default swaps. Unfortunately, the response we have been hearing from the administration and from Wall Street is not to do that but in fact to move us in another direction, which is to push for further consolidation in the financial services sector.

I have a very simple question. Do I hope I am wrong on this one, but I fear I may not be. That question is: What happens when these now even bigger entities, these multi-multi-multibillion dollar corporations-- what happens when they run into trouble in the future? None of us hope that happens, but what happens if that does occur? Once again, clearly, it will be the American people who will be on the hook.

This country can no longer afford companies that are too big to fail. If a company is so large that its failure would cause systemic harm to our economy, if it is too big to fail, then it is too big to exist. What we need to do right now is to assess which companies fall into this category.

For a start, I don't think you need to be a Ph.D. in economics to understand this. I think Bank of America, if I may be allowed to say so, is certainly one of those companies. Let's take a look at Bank of America. It is the largest depository institution in our country. It has assets of $1.7 trillion; $711 billion of that money comes from bank deposits representing over 10 percent of all bank deposits in the entire country--one bank, 10 percent of all bank deposits.

In August, the Bank of America bought Countrywide, the largest mortgage lender in the country. And then last week it bought Merrill Lynch, the largest brokerage firm in America. There is so much concentration of wealth in the Bank of America that clearly, if it were to fall in the future,

what do you think the U.S. Government is going to say? You can absolutely expect that the President or the Congress will say: My God, we can't allow Bank of America to fall. Because if they fall, it will impact the entire national economy, the entire world economy. The taxpayers of this country are going to have to bail out Bank of America.

My suggestion is before we allow ourselves to be in that position, maybe we make certain the Bank of America never is allowed to have that kind of power.

In my view, we should not be making Bank of America bigger; we should be breaking it up. We should start that process today and we should be breaking up other large financial institutions that are ``too big to fail.''

Finally, in terms of dealing with this unfolding disaster, we need to make certain that working Americans, the middle class of this country, are not asked to foot the bill for the current economic crisis that was brought to us by these large multinationals. If the economic calamity requires a Federal bailout, it should be paid for by those people who actually benefited from the reckless behavior of people empowered by the extreme economic views of Senator Gramm, President Bush, and Senator McCain.

Right now, today, the wealthiest one-tenth of 1 percent earns more income than the bottom 50 percent. That gap between the very rich and everybody else is growing wider. We have the dubious distinction of having by far the most unequal distribution of income in the world, and on top of that the richest 1 percent owns more wealth than the bottom 90 percent.

The wealthiest 400 Americans--this is a startling figure that for obvious reasons people don't talk about too much, but this is amazing. The wealthiest 400 Americans in this country have not only seen their incomes double, but their net worth has increased by $670 billion since President Bush has been in office. Four hundred families have seen their net worth double and increase by $670 billion since President Bush has been in office.

Amazingly, the wealthiest 400 families in our country are now worth over $1.5 trillion--400 families. On average they earn over $214 million a year. As a result of President Bush's policies and the policies of our Republican colleague, the tax rate for these families has been cut almost in half, to 18 percent.

Amazingly--and this is a clearly a national disgrace--the wealthiest 400 families pay a much lower tax rate than most police officers do, than nurses do, than teachers do, than firefighters do.

Now, what does this say about us as a nation or about our politics, or the power of the wealthy over Government, when the middle class is paying a greater percentage of their income, a middle class which is in decline, a middle class where millions of workers have seen a reduction in their wages, and yet they are paying a higher percentage of their income in taxes than the very richest people in America?

It is this very small segment of our population which has made out like bandits, frankly, during the Bush administration. In my view, we need an emergency tax on those at the very top to pay for any losses the Federal Government suffers as a result of efforts to shore up the economy.

In other words, before we ask the middle class to pay more in taxes, before we ask working families to pay more in taxes, it is obvious to me that it is simply fair and right to go to those groups, that group of people who have benefited most out of Bush's policies, who have seen their incomes and their wealth soar. Let's ask them to help us bail out the economy rather than the working families who had nothing, nothing to do with this crisis, and, in fact, who have suffered under the 8 years of President Bush.

Before I finish, I wish to step back for a moment and examine this current crisis in the context of who our Government represents. What does it say about an administration that is prepared to put $85 billion at risk to bail out AIG but which has fought tooth and nail against programs that benefit working families all over this country? In my State of Vermont, people are worried about going cold this winter. And yet President Bush wanted to make hundreds of millions of dollars in cutbacks for the LIHEAP program that keeps people warm because we did not have enough money to do it.

We have enough money to provide hundreds of billions of tax breaks for the top 1 percent, we have enough money to spend $10 billion every month in Iraq, we have enough money to bail out AIG and Bear Stearns, but somehow we do not have enough money to keep people warm, to make sure that young people can go to college, to make sure that working people have affordable housing?

Since George W. Bush has been in office, nearly 6 million Americans have slipped out of the middle class and into poverty; over 7 million Americans have lost their health insurance; more than 4 million Americans have lost their pensions; over 3 million good-paying manufacturing jobs have been lost; total consumer debt has more than doubled; the median income for working-age Americans has gone down by over $2,000, after adjusting for inflation.

The interesting question to ask is, in the midst of that crisis facing tens of millions of working families, where has President Bush been? Where has his voice been in saying we have got to bail out working families who are seeing the decline in their standard of living and are falling into poverty? We have got to protect old people who are going to go cold this winter. We have to make sure that everyone in our country is able to get a decent education and can afford college. We have got to make sure that all Americans have health insurance. I have not heard the President say we need to bail out the middle class or working families, but he surely has been there to bail out large multinational corporations.

The American people deserve better. We need to reject the failed economic policies and priorities of President Bush and John McCain. We need a government that is not going to allow the wealthiest people and the largest corporations to loot our economy. We need a government that will put regulatory firewalls back in the financial sector and end the use of unregulated credit swaps. We need a government that is going to prevent speculators from stealing from them at the gas pump. We need a government that breaks up corporations that are too big to fail. We need a government that is going to view the problems of ordinary Americans as almost as important as they view the needs of large multinational corporations.

In other words, we need a government that represents the people of this country rather than just the wealthy and large multinationals.

I yield the floor.

On behalf of the leadership, I object. This bill, as I understand it, is part of a number of bills that are noncontroversial and are going to be included together.

Unanimous-Consent Request--S. 3297

Madam President, I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar No. 784, S. 3297; the bill be read a third time and passed; and the motion to reconsider be laid upon the table with no intervening action or debate.

On behalf of the leadership, I object. I understand that is contained within a group of other noncontroversial bills.

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

Mr. President, I wish to say a few words in thanking Senator Byrd, not only for his years of illustrious service to the American people but for reminding us about the importance of the Constitution. It is incredible that year after year he has come up here--and perhaps more than any other Member of the Congress--to instruct the American people about that great document and to urge people--children, old people, people from all over this country--to once again study what the Constitution is about.

I would hope, as a result of Senator Byrd's efforts, classrooms all over this country--our young people--will understand the importance of the Constitution.

So I say to Senator Byrd, thank you so much for your service in that regard.

Mr. President, as we observe Constitution Day today, we do not have to look very far to be reminded why it is important for us to reflect on the 221st birthday of the Constitution, which was signed by the Framers in Philadelphia on this date in 1787. I think the reason why it is so important to take a hard look at the Constitution today is because of what has happened over the last 8 years, because in many respects we have had a President who did not do as Senator Byrd urged us to do: Study the Constitution.

We all know that international terrorism is a very serious issue. We take it terribly seriously, and all of us are pledged to do everything we can to protect the American people from international terrorism. However, many of us believe we can do it within the context of the United States Constitution and the separation of powers----

Brought forth in that Constitution.

Unfortunately, over the last 8 years under the Bush administration, we have seen a tragic effort on the part of the executive branch to impose on the people of this country a vision of government where, instead of three coequal branches of government as laid out by our Constitution--the executive, the legislative, and the judicial branches--we have moved toward one dominant branch, that of the executive ruling under the theory of the unitary executive.

In my view, that is not what the Constitution of our great country is about, nor is it what the Framers wanted it to be. The theory of unitary executive states that since the Constitution inherently gives the President the power to do all kinds of things-- especially within the military and defense context beyond what is detailed in article II, then the President essentially can make up whatever he wants to justify for this or that action. In other words, he can say: We are threatened by international terrorism and I, as the President of the United States, can do anything I want to fight international terrorism. I don't have to worry about separation of powers. I don't have to worry about the laws of the land. I don't have to worry about the Constitution. I am the President. In my judgment, I can do what I want. I think the Senator from West Virginia would agree with me, that that is not what the Constitution of this country is about.

And that, unfortunately, we have a President who does not understand that.

In the last 8 years, sadly, we have seen a steady erosion of the fundamental rights and balance of power laid out in the Constitution and in our Bill of Rights. We have seen the President, the Vice President, and the administration carry out an unprecedented number of programs that insult our constitutional system and erode our standing around the world----

Because our Nation was founded as a nation of laws, not of individuals.

Let me list a few of the programs. I will not go on for too long, but I want the American people to get a glimpse of what has, in fact, gone on in the last 8 years under a President who neither understands the Constitution nor respects the Constitution. Let me enumerate some of those provisions:

Passage of the original PATRIOT Act and the PATRIOT Act Reauthorization.

Illegal and expanded use of national security letters by the FBI.

The NSA's warrantless wiretap program.

Using Presidential signing statements to ignore the intent of Congress's laws.

We have a President who says: Well, it is an interesting law. I will pick and choose which of the provisions I want to implement. That is not what the Constitution says. If you don't like the law, veto it.

But you cannot pick and choose. That is clearly not what the Constitution had in mind.

Furthermore, we have seen profiling of citizens engaged in constitutionally protected free speech and peaceful assembly. My view is, if you are an American, you have a right to protest, you have a right to engage in the political process without worrying that somebody is spying on you.

We have seen in recent years data mining of personal records.

We have seen, of course, the Abu Ghraib prison scandal.

We have seen a broad interpretation of congressional resolutions regarding use of military force as justification for unauthorized surveillance and other actions.

We have seen extraordinary renditions of detainees to countries that allow torture.

We have seen getting rid of the right of detainees to file habeas corpus petitions.

We have seen the condoning of the use of torture.

We have seen political firings of U.S. Attorneys.

We have seen destruction of CIA tapes.

The list goes on and on and on. Those are just some of the insults to the Constitution that we have seen over the last 8 years.

Mr. President, I also wish to take a few moments to highlight one of the more egregious examples of this abuse which was recently chronicled by the Washington Post.

This article describes the unprecedented use of executive authority which trampled on the rule of law and, in the process, Americans' basic civil liberties. Specifically, the article focuses on how a small group of people in the White House--the President, the Vice President, the Vice President's Chief of Staff, and a few others--decided through their own twisted interpretation of the Constitution that with the President's say-so alone, they had the power to perform warrantless surveillance on innocent Americans known as the NSA warrantless wiretapping program. They created a program almost completely outside of the authority of our laws based on the principle that because the President of the United States is the Commander in Chief, and it is his job to protect the country, anything they think of that protects this country--anything that fights terrorism--is justified under the Constitution. That, in my view, is dead wrong.

This view of the Constitution and the balance of power in our Government should make all Americans, no matter what political persuasion--and I do want to say there are a number of conservatives all over this country--and every honest conservative should be appalled by the constitutional abuse that has taken place by President Bush. No matter what your point of view is, you should be concerned, but especially for those citizens in our country who consider themselves conservatives and wish to limit the role of government.

I ask the Senator from West Virginia: How often have we heard conservatives talk about a limited role in government and then go out and say: Oh, the government can do anything they want; forget the Constitution.

I think that is absolutely hypocritical.

Even more amazingly, when a few members of the Department of Justice--the top law enforcement agency of our Government--including then-Attorney General John Ashcroft, FBI Director Robert Mueller, and Acting Attorney General James Comey, who learned of the program and refused to renew the program unless it was redrafted to fall within the confines of U.S. surveillance law, the President and his aides attempted to completely bypass these critics and decide that the President, and the President alone, could decide what is lawful or unlawful.

During a debate about who had the final word on the warrantless wiretapping program, the Washington Post quotes President Bush as saying: ``I decide what the law is for the executive branch.''

I concur.

The President does not decide the law. It is the people of this country through the Congress who decide the law, and the President, as every other American citizen, obeys the law.

When we lose that understanding, we lose what our Constitution is about, we lose the essence of what the United States of America is about. Thankfully, thankfully--let's give credit where credit is due--by threatening their mass resignation, the top leaders of the Justice Department forced the President to revise his and the Vice President's legal justification for this wiretap program, making it only a bit less objectionable.

While I am opposed to the wiretapping program in its current form due to the fact that it does not have an adequate check on the power to monitor the conversations of innocent Americans, I do respect--and I hope we all respect--those individuals at the Department of Justice who, during this time in 2003 and 2004, stood up for the basic aspects of our legal system.

Mr. President, I ask unanimous consent that a copy of the Washington Post articles written by Barton Gellman and published on September 14 and 15 of this year be printed in the Record at the conclusion of my remarks.

Mr. President, I am not the only person with these concerns about the balance of power between the branches of Government. An August poll conducted by the Associated Press and the National Constitution Center found that:

Two-thirds of Americans oppose altering the balance of

power among the three branches of government to strengthen

the presidency, even when they thought that doing so would

improve the economy or national security.

This is not a partisan issue, no matter what administration, no matter what party. I am quite confident that whether it is a Democratic President or a Republican President, Senator Byrd will be there raising exactly the same issues.

Because he understands--and I hope all of us understand--that the Constitution is far deeper than partisan politics or who happens to sit in the White House in this or that year.

The secret creation of the warrantless wiretapping program outside the confines of law is only one example of a number of the ways the Constitution has been abused over the last 8 years.

I conclude by again congratulating Senator Byrd. Because the work he is doing here of trying to make sure that people from Maine to California study our Constitution--something that is not happening enough in our schools--

People should understand the Constitution and understand that the Constitution has laid out an extraordinary framework from the first day of this country. It is an extraordinary document, perhaps the greatest document ever written in the Western World.

We should be enormously proud. What we have to do regardless of our political views is we have to stand and defend and fight for the integrity of that Constitution.

So I thank Senator Byrd so much for what he has done in that regard to protect our constitutional rights.

With that, Mr. President, I yield the floor.

I suggest the absence of a quorum.

Mr. President, I ask unanimous consent to address the Senate.

Mr. President, let me begin by concurring with Senator Brown. He raised a very important issue, and that is: In the midst of a major economic crisis, when people today--especially senior citizens on fixed incomes--are wondering about how they are going to heat their homes, how they are going to purchase the food they need--I wonder about 3 years ago, had we listened to President Bush, if we had listened to John McCain, if we had listened to the Republican leadership and we had privatized Social Security--can one begin to imagine the anxiety that would be existing all over this country in terms of senior citizens wondering what kind of retirement they would have, what kind of funding would be there for their remaining years? So thank goodness we did not follow the advice of President Bush and John McCain and the Republican leadership; thank goodness we kept Social Security strong.

Yesterday I came to the floor to discuss the interconnection of the two great crises that are currently facing our country. The first, of course, is the financial crisis--the collapse of major Wall Street firms--and secondly is the very serious problem of high and volatile energy prices, whether it is $3.70 for a gallon of gas to put in your car, or whether it is very high oil prices this coming winter to heat your home. Both of these problems clearly are having a major impact on middle-income families from one end of this country to the other.

In terms of the financial crisis, the American people are finding it harder and harder to get a mortgage or a home equity line of credit. They are seeing the equity in their homes going down, and they are seeing the values of their savings, including their 401(k) savings, plummeting. What anxiety is existing all over this country. People have put money into their 401(k), the stock market is going down rapidly, and people are wondering what is going to take place for their economic future.

In terms of the energy crisis, the American people have been forced to pay tens of billions of dollars more in inflated energy prices because of the outrageous price levels caused by speculation occurring in unregulated energy markets. We have heard testimony from energy economists who are telling us that between 25 percent to 50 percent of the cost of a barrel of oil today has nothing to do with supply and demand, it has nothing to do with marketplace fundamentals; it has to do with speculation on the part of financial institutions that are driving oil prices higher, and now, by the way, with that money coming out of oil futures, driving prices down, creating a lot of volatility.

I laid out yesterday the connection between those two crises. Both of these crises are tied to the same extreme economic ideology--an ideology which says the Government should play no role--or a minimum role--in protecting consumers; that we should put all of our trust in the honesty and the integrity of the heads of large multinational corporations.

I should mention that both of these crises are also tied to the work of one former Member of the U.S. Senate, and that is the former chairman of the Senate Banking Committee, Phil Gramm of Texas. To a significant degree, a lot of what we are experiencing today is related to the disastrous changes to Federal law that deregulated both the energy industry and the financial industry, and that effort was led by former Senator Gramm.

To recap, as chairman of the Senate Banking Committee in 1999, then- Senator Phil Gramm, spearheaded legislation that bears his name, and that is the so-called Gramm-Leach-Bliley bill that broke down critical regulatory safeguards that the Government put in place after the Great Depression to prevent exactly what we are experiencing today. Having laid the groundwork for our crisis in the financial sector, the very next year, amazingly enough, Senator Gramm is credited with slipping legislation into a largely unrelated bill that deregulated the electronic energy market. Shockingly, when he slipped this measure into the law, a measure we now know as the Enron loophole, Senator Gramm's wife, Wendy Gramm, had recently been on the board of directors of--you guessed it--the Enron Corporation.

This deregulation of the energy markets has allowed speculators to drive up the price of a barrel of oil to as high as $147 and, as I mentioned earlier, there are many economists who believe the volatility and the high price of oil today is not supply and demand primarily, but it is because of speculation on the part of financial institutions and hedge funds.

Now, as bad as things were yesterday, last night they got even worse. Last night, the Bush administration nationalized the world's largest insurance company: AIG. The Bush administration claimed it had to put $85 billion of taxpayer money at risk because AIG's collapse would have brought down perhaps our entire economy--the entire economy of this country--and had a major impact on the entire world's economy. Let me ask the same question about AIG today that I asked yesterday about the energy and financial crises this country is facing, and that is: Is this bad luck? Why is this happening? We need to understand that, because the risks are enormous and the amount of money we are dealing with--trillions and trillions and trillions of dollars--is literally beyond comprehension. I think very few people can understand the scope and the magnitude of what we are dealing with.

Well, it turns out the AIG situation is closely tied to the same rightwing economic ideology that has been pushing us toward economic disaster, and the responsibility for AIG's near collapse lies, again, with that same philosophy which has been led by former Senator Phil Gramm.

As a very recent online article from Time magazine explains, AIG's traditional insurance business seems to be doing well in what they have been doing for many years. They are, in fact, making money. But what AIG got involved in was more than the traditional insurance business. They got involved in risky derivative schemes that about three people in the world understand called credit default swaps, or CDS's that allow big companies to guarantee each other's risky lending practices. This is extremely complicated stuff--a long way away from where we were 10 or 15 years ago.

Now in order to give the American people a full understanding of the risks posed by these unregulated credit default swaps--unregulated credit default swaps--I wish to read a short September 15 article by Professor Peter Cohen, a graduate of the Wharton School, that deals with the full scope of the problem we face and the role that Senator Gramm had in its creation. I apologize to anybody who is listening. What is following is technical, it is a bit boring, but when we are dealing with trillions of dollars, I think it is important that we try to understand this. This is what Professor Cohen writes:

Lurking in the background of this weekend's collapse of two

of Wall Street's biggest names is a $62 trillion segment of

the $450 trillion market for derivatives that grew huge

thanks to John McCain's chief economic advisor, Phil

``Americans are Whiners'' Gramm.

Let me just go through these numbers again, because these numbers are so huge. When the Presiding Officer and I represent our State, we fight for a few million dollars here and a few million dollars there, and that makes a lot of difference to the people of Colorado or the people of Vermont. What we are dealing with is so incomprehensible: It is a $62 trillion segment of the $450 trillion market for derivatives. Who can even understand what that means? A $450 trillion market, what does that mean?

Now, all of this occurred, all of this deregulated activity, of which the Government plays no role, took place because in December of 2000, Senator Gramm snuck in--snuck in--a 262-page amendment. That is what goes on around here. We can sneak in 262-page amendments to a government reauthorization bill that created what is now the $62 trillion market for credit default swaps, or CDS's.

Continuing to quote:

I realize it is painful to read about yet another Wall

Street acronym, but this is important because it will help us

understand why the global financial markets are collapsing.

CDSs are like insurance policies for bondholders. In exchange

for a premium, the bondholders get insurance in case the

bondholder can't pay. . . . In the case of the 1.4 trillion dollars' worth of Fannie Mae and Freddie Mac bonds, the Government's nationalization last Sunday triggered the CDSs on those bonds. The people who received the CDS premiums are now obligated to deliver those bonds to the ones who paid the premiums.

Professor Cohen continues:

Gramm's 262-page amendment, dubbed ``The Commodity Futures

Modernization Act''--

We have heard that term--

``The Commodity Futures Modernization Act,'' according to

the Texas Observer, freed financial institutions from

oversight of their CDS transactions.

That is the important thing, they became deregulated. The Government no longer was able to see what was going on.

``Prior to its passage, they say, banks underwrote

mortgages and were responsible for the risks involved.''

You went to a bank, you got a mortgage, the bank took responsibility, they lost money, they made money, that was the transaction.

``Now, through the use of CDSs--which in theory insure the

banks against bad debts--those risks are passed along to

insurance companies and other investors,'' wrote the Texas

Observer.

Still, in Professor Cohen's article:

How does this relate to Lehman's bankruptcy? ``CDSs were a

key factor in encouraging lenders to feel they could make

loans without knowing the risks or whether the loan would be

paid back.''

When you and I were younger, Mr. President, banks knew the people to whom they made loans. They didn't give a loan to somebody they knew would not be able to pay it back. But that is no longer the case.

``The Commodity Futures Modernization Act freed them of

Federal oversight . . . '' And it was due to these CDSs that

Wall Street held an emergency session yesterday to try to

minimize the damage of Lehman's CDSs and other derivatives.

Unfortunately, the session did not produce much, thanks to

the built-in lack of knowledge of the risks in these

transactions that Gramm's legislation ensured. You are going

to be reading more and more about CDSs over the months ahead.

Professor Cohen continues:

It will become as familiar as the phrase subprime

mortgage--

Which, unfortunately, many of us now are familiar with--

was in the year 2007. Unfortunately--

Get this, this is quite amazing--

there were ``only'' $1.3 trillion worth of subprime mortgages

and the CDS market is 48 times bigger than that.

Forty-eight times bigger than the subprime market--

and more than four times bigger than the U.S. GDP. And since

nobody has ever had to deal with this volume of CDS

unwindings, it is impossible to calculate how much they will

cost.

In other words, what has happened as a result of Senator Gramm's legislation is, unbelievable amounts of money have been traded, accumulated without anybody really knowing what is going on. Now we are left trying to pick up the remains of those problems.

Professor Cohen's article is compelling because it tells us how huge this crisis is and why we have every reason to fear that AIG may well be just the first of many companies involved in risky investments that the American people will have to bail out.

The time for hand wringing is over. This Congress needs to put an end to the radical deregulation that was pushed by Senator Phil Gramm and many other Republicans, and there were Democrats who went along with that as well. We need to put the safety walls back up in the financial services sector. We need to regulate the electronic energy markets. We need to end the use of unregulated credit default swaps. In other words, what we need to do once again is have the U.S. Government play an important role in protecting the people of this country against the greed of large corporate interests.

Unfortunately, the response from the administration and Wall Street is not to do that but to push for further consolidation in the financial services sector. Here is just an amazing thing. The argument we are hearing over and over again is that AIG was too big to fail, and what we are now creating are institutions that are even larger than AIG. And 10 years from now, when these institutions are threatened with collapse, there will be people coming up saying: Oh my goodness, we can't allow those to fail; we have to bail those out as well.

This country can no longer afford companies that are too big to fail. If a company is so large that its failure would cause systemic harm to our economy, if it is too big to fail, then it is too big to exist. If it is too big to fail, it is too big to exist. We need, as a Congress, to assess which companies fall in this category. Bank of America is certainly one of them. Those companies need to be broken apart. We cannot have companies so huge that if they go under they take the world economy with them.

Then once we break them up, if a company wants to act in a risky manner, if they want to take risks in order to make some quick bucks, that is OK. If they want to take the risk and they want to lose money, that is OK. The American people should not have to, and would not be under those circumstances, be left to pick up the pieces.

Finally, in terms of dealing with this unfolding disaster, we need to make sure working Americans, the middle class, do not foot the bill. If the economic calamity requires a Federal bailout, it should be paid for by those people who actually benefited from the reckless behavior of people empowered by the extreme economic views of Senator Gramm, President Bush, Senator McCain, and many others.

In other words, the point I am making is that in the last 10 years, many of these people have made billions and billions of dollars. It is unfair to simply ask the middle-class working families who are trying to figure out how they are going to pay their fuel bills, how they are going to send their kids to college, to bail out these large institutions from which many people made huge amounts of profits.

We don't talk about this too often, but today the wealthiest one- tenth of 1 percent earns more income than the bottom 50 percent. The top 1 percent owns more wealth than the bottom 90 percent. And the wealthiest 400 Americans in this country have not only seen their incomes double, their net worth has increased by $640 billion since George W. Bush has been in office.

Can you believe that? Four hundred families, four hundred people, less than the Congress, have seen a $640 billion increase in their wealth since President Bush has been in office. And, amazingly, these 400 families are now worth over $1.5 trillion--400 families. On average, they earn over $214 million a year.

As a result of President Bush's policies, amazingly enough, their tax rates have been cut almost in half to only 18 percent on average. Amazingly, the wealthiest 400 Americans pay a lower tax rate than most police officers, teachers, firefighters, and nurses. So if you are one of the very wealthiest people in this country, if you are earning $214 million a year on average, you pay a lower tax rate than somebody who is a police officer, a teacher, a firefighter, or a nurse.

That may make sense to somebody; it does not make sense to me. What does it say about us as a nation when

the middle class pays a greater percentage of their income in taxes than the wealthiest 400 Americans?

It is this very small segment of our population that has made out like bandits--frankly, some of them are bandits--during the Bush administration. We have to recognize that when we talk about who is going to pay for the bailouts.

In my view, we need an emergency surtax on those at the very top in order to pay for any losses the Federal Government suffers as a result of efforts to shore up the economy. It should not be hard-working people who are trying to figure out how they are going to keep their families economically above water, people who are working longer hours for lower wages, people who have lost their health care, people who cannot afford to pay their fuel bills this winter. Those are not the

people who should be asked to pay for this bailout. If

there is a bailout that has to be paid for, it should be

the people, the segment of society that has benefited from

Bush's economic and tax policies over the last 8 years.

Before I complete my remarks, I would like to step back for a minute and examine this current crisis in the context of whom our Government represents.

What does it say about an administration that is prepared to put $85 billion at risk to bail out AIG but fights tooth and nail against dealing with the economic crises facing working families in this country? Mr. President, $85 billion at risk for AIG, some $30 billion for Bear Stearns, perhaps trillions for Fannie Mae and Freddie Mac. For those folks there seems to be an endless supply of money. Don't the American people deserve a Government that views their economic needs as being as important as the health of large corporations and Wall Street executives?

Since President Bush has been in office, nearly 6 million Americans have slipped out of the middle class and into poverty. What was the administration's response? Was there a bailout for those people who lost good-paying jobs and are now working for significantly lower wages? Did President Bush come and say we have to protect those kids in a society which has the highest rate of childhood poverty of any major country? Are we going to bail out those families? I didn't hear that from the White House.

Over 7 million Americans have lost their health insurance. More than 4 million Americans have lost their pensions. Over 3 million manufacturing jobs have been lost. Total consumer debt has more than doubled since President Bush has been in office. Median income for working-age Americans has gone down by over $2,000 after inflation. Where has the Bush administration been in bailing out those families? Where has the Bush administration been in saying we are going to provide health care to all Americans? I didn't hear them come forward.

But when it is AIG, when it is Bear Stearns, my goodness, how quickly they respond. If you are a CEO of a large insurance company, they are there for you. But if you are a working mother whose kid does not have any health insurance: I am sorry, we can't afford to take care of you.

I can go on and on about the priorities established by this administration. The American people should know this President wanted to cut emergency food assistance for nearly a half million seniors, mothers, and children. He wanted to cut job training for 161,000 people and cut childcare assistance for 200,000 children. There is not enough money to take care of those people. I guess they don't make a whole lot of campaign contributions.

The President wanted to raise fees on veterans getting health care, which we, of course, stopped. He fought giving 3 million children access to health care. He wanted to cut $1 billion from rural housing when we have a major housing crisis in rural America.

No money for children who don't have any health insurance, no money for people living in dilapidated housing, no money available for veterans health care. We can't do that. But if you are AIG, if you are a large corporation, this Government is there for you.

These people, working families, seniors, veterans, the unemployed-- their problems do not warrant, apparently, an urgent response from the President. But big insurance companies, big investment houses, companies that get engaged in risky subprime lending and credit swaps, my, my, how quickly we respond to them.

The American people deserve better. We need to reject the failed economic policies and priorities of George W. Bush and John McCain. Americans need a Government that is not going to let the rich and large corporations loop our economy. Americans need a Government that will put regulatory firewalls back up in the financial sector and end the use of unregulated credit swaps. Americans need a Government that is going to prevent speculators from robbing them at the gas pump. Americans need a government that breaks up companies that are too big to fail. Americans need a government that is going to view their problems as seriously as they view the problems of corporate America. Our job is to give the American people that kind of government.

Mr. President, I yield the floor.

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of H.R. 6889, which was received from the House.

Mr. President, I ask unanimous consent that the bill be read three times and passed, the motion to reconsider be laid upon the table, with no intervening action or debate, and any statements related to the bill be printed in the Record.

Mr. President, I ask unanimous consent that the Committee on Foreign Relations be discharged from further consideration of S. Res. 643 and that the Senate proceed to its immediate consideration.

Mr. President, I further ask unanimous consent that the resolution be agreed to, the amendment which is at the desk be agreed to, the preamble, as amended, be agreed to, the motion to reconsider be laid upon the table, with no intervening action or debate, and any statements relating to the resolution be printed in the Record.

Mr. President, I ask unanimous consent that when the Senate completes its business today, it stand in recess until 10 a.m. tomorrow, Thursday, September 18; that following the prayer and pledge, the Journal of proceedings be approved to date, the time for the two leaders be reserved for their use later in the day, and the Senate proceed to a period of morning business, with Senators permitted to speak for up to 10 minutes each; further, that the mandatory quorum under rule XXII be waived with respect to the motions to proceed to S. 3297 and H.R. 6049.