Floor Statements

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

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 President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. President, I ask to be able to speak as in morning business.

Mr. President, this week we have learned that Lehman Brothers, one of the oldest financial institutions in our country, an investment bank that has survived two world wars and a Great Depression, has proven that even it could not survive 8 long years of deregulation and lax oversight by the administration of George W. Bush. It is going bankrupt.

Yesterday we also learned that the beleaguered Merrill Lynch, the largest brokerage firm in this country, will be bought out by Bank of America, the largest financial depository institution in this country. Now we are also learning that AIG, the largest insurance company in the United States, and Washington Mutual, the largest savings and loan association in this country, are also in deep financial trouble. The list of troubled banks that the FDIC maintains is growing larger and larger.

In addition, last week, to avert a complete mortgage meltdown, we saw the Bush administration bail out Fannie Mae and Freddie Mac, putting tens, if not hundreds, of billions of dollars of taxpayer dollars at risk. Earlier this year, we saw the Federal Reserve orchestrate the takeover of Bear Stearns, a deal backed by $30 billion in taxpayer dollars.

At the same time, Americans are still paying outrageously high prices at the gas pump. Prices are still over $3.50 a gallon, even though the price of oil is now down to almost $90 a barrel. Every little hiccup to send gas prices up or down with virtually no connection to real supply and demand indicators.

Up to this point, the Republicans in the Senate have prevented us from taking any real action to rein in those volatile energy markets, so oil could be down this week, but any kind of rumor or instability, whether man made or natural, could send those same prices soaring again.

I think it is important the American people understand why we got to where we are today; why we are in a situation where millions of workers are fearful about being able to heat their homes in the wintertime while workers all over this country are finding it very difficult to fill their gas tanks. Is what occurred simply bad luck? Are we at the bottom of the so-called business cycle? How do these happenings occur to what was once the strongest economy in the world with the greatest middle class?

If we take a deep look at what is going on in terms of the financial crisis we are suffering through today and the volatile energy prices we are suffering through today, we can understand that both are the result of deliberate policy decisions made by the Congress and the administrative negligence on the part of the Bush administration. These deliberate policies were the result, to a significant degree, of the power and influence of corporate lobbyists--who also make huge campaign contributions--representing some of the most powerful special interests in the world, whether it is big oil, big coal or whether it is the largest financial institutions in the world.

What these lobbyists fought for and secured was selling deregulation snake oil, deregulation snake oil backed with millions in campaign contributions. That is what I think is the overlying issue as we look at the financial crisis facing Wall Street and the soaring and volatile prices in terms of oil.

All too often when bad things happen because of failures here in Washington, both parties generically blame it on the other and no one stands up and tries to point out what, where, why and, most importantly, who is behind these bad policies. As an Independent, I think that breeds a cynicism and an anger and a frustration on the part of the American people about the political system of our country.

Well, in this case, I think the American people deserve a little more of an explanation. It has been their hard-earned dollars that have been needlessly spent on $4 a gallon gasoline. It is their retirement savings and, my God, I wonder all over this country the kind of frustration that exists today with the volatility in the stock market going down 500 points yesterday and what people are worried about, whether their 401(k)s are going to be worth very much in the future. These are very frustrating times for the American people.

In the case of both of these current crises, the financial services and energy crisis, one of the major actors and perhaps the main actor in creating what we have seen today is a former Senator from Texas named Phil Gramm. In terms of our financial crisis, one of the reasons we are in the mess we are in today is because of the enactment of the Gramm-Leach-Bliley Act in 1999. As you may recall, this legislation was responsible for deregulating the financial services industry by completely repealing the Glass-Steagall Act.

Now, I was a Member in the House of Representatives at the time. I was a member of the House Banking Committee when this legislation was being debated. I remember that debate very well because I was in the middle of it. Let me tell you, I do not mean to be patting myself on the back, but I think it is important to take a little bit of a look at recent history.

This is 1999 during the debate. This is what I said as a member of the House Banking Committee:

I believe this legislation will do more harm than good. It

will lead to fewer banks and financial service providers,

increased charges and fees for individuals, consumers and

small businesses, diminished credit for rural America, and

taxpayer exposure to potential losses should a financial

conglomerate fail. It will lead to more mega mergers and a

small number of corporations dominating the financial service

industry and a further concentration of economic power in our

country.

Unfortunately, that is exactly what is happening today, and I would much prefer to have been wrong than right. But on the other hand, former Senator Phil Gramm--who I should mention to you has been Senator McCain's top economic adviser--at that time had a very different opinion of the legislation which bears his name. Senator Gramm at that time said something very interesting about that piece of legislation. This is what he said:

Ultimately the final judge of the bill is history.

Ultimately, as you look at the bill, you have to ask

yourself, will people in the future be trying to repeal it? I

think the answer will be no.

Well, put me down as a Senator who believes we need to repeal Gramm- Leach-Bliley. Put me down as a Senator who believes we need to restore strong Government oversight of the banking industry. Put me down as someone who believes we need to have firewalls in the financial services sector so that we do not have the domino effect we are seeing right now.

There was a reason Congress enacted reforms of the banking industry in the 1930s, and that was because we did not want to repeat the mistakes that caused the Great Depression. Failing to have learned from our mistakes, it looks as if we are doomed to repeat them.

The lesson here is that left to their own devices, company executives will make poor decisions and put their investors' capital at risk. The important lesson here is that poorly regulated financial markets invariably endanger the health of the entire economy and, of course, as this world becomes more and more interlocked, in fact, the economy of the entire world.

In that context, the extreme economic ideology of people such as

former Senator Gramm, and for that matter Senator McCain, says that the people of this country should simply stand back and allow executives in Wall Street boardrooms to make decisions with no public oversight that have the potential of wrecking our economy. In other words, deregulate them, let them do whatever they want in order to improve their bottom line, and the Government does not have to watch to see what the implications of their decisions are for our country or for our taxpayers.

I disagree with Senator Gramm's perspective. People who want to gamble their own money are certainly welcome to do that. But when your actions have the ability to dry up credit for businesses all over our country, when your actions can dry up mortgages for people who desperately want to buy a home or stay in their home, when your actions depress the value of Americans' savings, we need public oversight, and it should be strong oversight with the primary mission being to protect the American public from the reckless greed that has brought us to where we are today.

In former Senator Gramm's world view, when it comes to protecting the American consumer and the safety and soundness of our financial institutions, Government is not the answer, Government is the enemy, Government is terrible. But when banks fail, all of a sudden, guess what happens. The Government has no choice but to intervene to prevent the entire economy from collapsing. The Gramm-McCain version is one where profits are private, going to the very wealthiest people in this country, but risk is public, being assumed, by and large, by the middle-class and working people of this country. It is socialism for the very rich, and free enterprise for everyone else.

Unfortunately, former Senator Gramm was not satisfied by having set up the dominos in 1999 that made our current financial crisis possible. In 2000, he decided his loot-and-burn economics had to be applied to the energy markets as well now. This is an achievement. First you go after deregulating the financial markets, and then you move to energy. And out of his efforts in energy, of course, the so-called Enron loophole was born. Senator Gramm, who was then Chairman of the Banking Committee, was one, if not the main proponent of the provision deregulating the electronic energy market that we now know as the Enron loophole.

Was this done through a deliberative process with debate and hearings? Actually, no, it was not. This very important provision was slipped into a massive unrelated bill with no discussion and no hearings, and the American people today are paying the price for that.

The Federal agency that oversees those energy markets was the Commodity Futures Trading Commission, the CFTC. Conveniently, the head of that agency at the time was a Wendy Gramm. Yes, you guessed it, it was his wife. And Wendy Gramm had become head of the CFTC after being on the board of directors of, well, you guessed it, the Enron Corporation. Even Hollywood could not come up with a plot quite so transparent.

The result of this deregulation of the energy markets has, according to many experts who have testified before Congress, allowed speculators on unregulated markets to artificially drive the cost of a barrel of oil up to over $147 a barrel.

My colleagues, including Senator Dorgan and Senator Cantwell and many others, have laid out the way that speculators have driven up oil prises in many well-researched presentations here on the floor and a number of Senate committees. I applaud them for their leadership. But all of this speculation and all of the millions and billions of dollars that Americans have spent on exorbitantly priced gasoline would not have happened if it had not been for the efforts of Senator Gramm pushing through the so-called Enron loophole.

As central as Senator Gramm was in creating the financing and energy disasters we are currently facing, he was aided and abetted by the Bush administration's willingness to simply look the other way. Even with all of the harm that has been done to the economy, President Bush still refuses to acknowledge it. One wonders what world he is living in.

And, shockingly, Senator McCain is singing from the same song sheet. On September 15, Senator McCain said:

The fundamentals of our economy are strong.

Does that sound familiar? Well, it should. Since 2001, President Bush and members of his administration have repeatedly described the economy as strong and getting stronger: Thriving, robust, solid, booming, healthy, powerful, fantastic, exciting, amazing, the envy of the world.

Those are the adjectives used by the President and members of his administration over the last 8 years. What economy are they looking at? The fact is, when it comes to the economy, Senator McCain and President Bush do not get it. Is it a surprise to anyone that Senator Gramm, who, until fairly recently, was Senator McCain's major economic adviser on his campaign, described Americans as ``a nation of whiners'' who are suffering through a ``mental recession''?

Was it a surprise? What is surprising is that Senator McCain is trying to pass himself off as a maverick when he looks to the same people, people such as Senator Gramm, who laid the groundwork for our current economic problems.

While Senator McCain and President Bush think the fundamentals of our economy are strong, while they talk about how robust things are, the reality is the middle class in this country is collapsing. And if we do not make the kind of bold changes we need to make, for the first time in the modern history of America our children will have a lower standard of living than we do.

We are looking at the American dream as an American nightmare. We are moving in the wrong direction economically as well as in so many other areas.

Since President Bush has been in office, nearly 6 million Americans have slipped out of the middle class and into poverty. How do you think the fundamentals are strong when 6 million more Americans enter the ranks of the poor? Since Bush has been in office, over 7 million Americans have lost their health insurance. Now well over 46 million Americans are without any health insurance at all, and even more are underinsured. Does that sound like the fundamentals of the economy are strong?

Since President Bush has been in office, over 3 million manufacturing jobs have been lost, total consumer debt has more than doubled, median income for working-age Americans has gone down over $2,000 after adjusting for inflation. They do not get or do not care that prices on almost everything we consume are going up and up and up.

Today the typical American family is paying over $1,700 more on their mortgages, $2,100 more for gasoline, $1,500 more for childcare, $1,000 more for a college education, $350 more on their health insurance, and $200 a year more for food than before President Bush was in office.

In addition, home foreclosures are the highest on record, turning the American dream of home ownership into the American nightmare. The unemployment rate has skyrocketed. Since January of this year, we have lost over 600,000 jobs. Adding insult to injury, the national debt has increased by over $3 trillion, and we are spending $10 billion a month on the war in Iraq, making it harder and harder to do anything to help the struggling middle class.

Is it any wonder that Rick Davis, Senator McCain's campaign manager, recently said: ``This election is not about issues''? If my economic policies were to follow President Bush's and the economy was in a state of near recession and unemployment was up and median family income went down and more people were losing health insurance and more and more people were in debt, the foreclosure rate at the highest rate in American history, if all those things were happening, I would certainly also run on a campaign not having anything to do with issues whatsoever. That is what I would do. I would run away from all of those issues. That is certainly John McCain's strategy. Who can blame him?

John McCain claims to be offering change. But on issue after issue, he is offering more of the same--more tax breaks for the very rich, more unfettered free-trade agreements that will

cost our country millions of good-paying manufacturing jobs, more tax breaks to big oil companies ripping off the American consumer at the gas pump; in other words, more of George Bush's failed policies that have led to a collapse of the middle class, an increase in poverty, and a wider gap between the very rich and everyone else.

John McCain and George Bush may be right in one respect: If they are talking about the wealthiest people and the most profitable corporations, the economy is fundamentally strong. Things could not be better for those people, that small segment of our society. In fact, one can make the case--and economists have--that the wealthiest people have not had it so good since the robber baron days of the 1920s.

Right now--this is really quite an astounding fact--the top one-tenth of 1 percent of income earners earn more income than the bottom 50 percent. That gap between the people on top, who are busy trying to build recordbreaking yachts and all kinds of homes, busy buying jewelry that is unbelievably expensive--one-tenth of 1 percent earn more income than the bottom 50 percent--that gap is growing wider. Also the top 1 percent own more wealth than the bottom 90 percent. We as a nation have the dubious distinction of having the most unfair distribution of wealth and income of any major country on Earth.

The wealthiest 400 people have not only seen their incomes double, their net worth has increased by $640 billion since President Bush has been in office. Can we believe that? The wealthiest 400 Americans have seen their net worth increase by $640 billion since George Bush has been in office. Today, the richest 400 Americans are now worth over $1.5 trillion. At the same time, we have the highest rate of childhood poverty; 20 percent of our children live in poverty. We have working families lining up at food banks because they don't earn enough to pay for food.

Apparently, all of that is not good enough for Senator McCain and for President Bush. They insist that those tax breaks be made permanent. In George Bush's and John McCain's world, those are the Americans who are struggling. The wealthiest 400 Americans just can't make it on $214 million a year. It must be pretty hard to scrape through and get the food and shelter a family needs, so obviously those are the guys who need a tax break.

We have had almost 8 years of President Bush's economic policies. They follow, of course, 8 years of the policies of President Clinton. I think it is important to say a word to compare what happened during those two administrations.

I happened, as a Member of the House, to have disagreed with President Clinton on a number of issues. But I think when we look at his overall economic record and contrast it to the overall economic record of President Bush and the policies Senator McCain would like to follow, the record speaks for itself.

Take a look at job creation, how many new jobs have been created. Under President Clinton, almost 23 million new jobs were created. That is a pretty good record. Did every one of those jobs pay the kind of wages we would like? No. But nonetheless, almost 23 million new jobs were created in Clinton's 8-year term. Under President Bush, less than 6 million jobs have been created.

Under President Clinton, more than 6 million Americans were lifted out of poverty and into the middle class. Under President Bush, the exact opposite has occurred. Nearly 6 million people who were in the middle class have been forced into poverty. Under President Clinton, median family income went up by nearly $6,000. That is a lot of money. Under President Bush, median family income is going down.

The Republican Party for years has told us they are the party of fiscal responsibility above all. Yet, under President Bush, the national debt has increased by more than $3 trillion. Under President Clinton, we had Federal surpluses as far as the eye could see. Under President Bush, we have had Federal deficits as far as the eye can see.

There is a clear choice to be made this year. That choice is, does Government work for all of the people, for the middle class, for working families, for people who are struggling, or do we continue to develop policies which represent the people on the top who, in fact, have never had it so good since the 1920s?

The future of our country is at stake. I personally believe we cannot afford 4 more years of President Bush's policies.

I yield the floor.

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

Madam President, honest people may have differences of opinion as to what type of public policies to pursue to improve our economy, but there should not be a difference of opinion in terms of the state of the economy today, whether it is in Michigan, your State, whether Vermont, my State, or any of the other 48 States. The fact is that for tens and tens of millions of working families in this country, people are having and experiencing great difficulty. And within that context and the context of the Wall Street Journal reporting that today was a day when America's financial system was shaken to its core, and the Dow Jones average went down by some 500 points, I found it rather stunning, if I may use that word, to hear Senator McCain state that ``the fundamentals of our economy are strong.'' In saying that he is simply echoing what President Bush has been saying year after year after year, despite all of the evidence to the contrary. One does try to get a handle on understanding what world Senator McCain and President Bush are living in when they would suggest that ``the fundamentals of our economy are strong.'' Clearly, they have not been talking to working families around the United States of America.

My perception of the economy is if you get off of the country club circuit, you stop talking to the millionaires and the billionaires and the large campaign contributors, and you talk to ordinary working people, people who own small businesses, what you find, in fact, is that the middle class in our country is under more assault than has been the case since before the Great Depression.

The reality of American life today is that poverty is increasing. Over 5 million Americans have slipped out of the middle class into poverty. What we have all over America is families where mom and dad are both working and are now lining up outside emergency food shelves because the limited income they are earning is not providing enough money to provide the food they and their kids need. That does not suggest to me that the fundamentals of our economy are strong.

Since President Bush has been in office, over 7 million Americans have lost their health insurance, and the cost of health insurance has soared. Approximately 20,000 Americans die every single year because they can't gain access to medical care, to primary health care. We spend twice as much per capita on health care as any other nation, yet we are the only nation in the industrialized world that does not provide, by law, health care to all of its people. That does not suggest to me that ``the fundamentals of our economy are strong.''

Health care is perhaps the most basic need, maybe outside of food, outside of shelter, that people have, and 46 million Americans are without health insurance. I don't quite understand how Senator McCain believes in that regard that ``the fundamentals of our economy are strong.''

Since President Bush has been in office, median income for working- age Americans has gone down by over $2,000 after adjusting for inflation. Family income is going down. People are spending more for food. The cost of gas, of course, is now off the wall. College education costs are up. How does that sound like a situation in which ``the fundamentals of our economy are strong,'' according to Senator McCain.

I think the confusion in all of this is pretty easily understood. The truth is ``the fundamentals of our economy are strong'' if you are within the top 1 percent of our country. If you are a millionaire or billionaire, you know what, Senator McCain is right; the fundamentals of the economy are strong for those people.

If you are one of the 400 wealthiest people in our country, you collectively own $1.4 trillion of America--400 families, and your wealth has exploded in the last 8 years. In fact, in America today, the top one-tenth of 1 percent earn more income than do the bottom 50 percent. Within that context, certainly, if you are among the top one- tenth of 1 percent, we can understand why Senator McCain would suggest that ``the fundamentals of our economy are strong.''

What frightens me is that anyone who is so removed from the economic reality facing the American people clearly is not going to have a prescription on how to address the real problems facing ordinary Americans. If your diagnosis is wrong, if you are a physician and you make an incorrect diagnosis, your treatment is not going to work very well. If you are President of the United States, whether it is Bush or something that McCain aspires to, clearly your actions are not going to be effective if you do not understand what is going on.

Let me, if I might, contrast what has been going on under President Bush compared to what was going on under President Clinton. I am not here to tell

you that under President Clinton everything was rosy, there were no problems. That certainly was not the case, and I, personally, as an independent, had some strong disagreements with the Clinton administration on a number of issues, including trade. But it is important to understand, contrasting what Clinton accomplished for the middle class as opposed to what Bush did. In fact, McCain's ideas are to follow economically the line of action that President Bush has established over the last 8 years.

During the Clinton administration, over 22 million new jobs were created. Were all of those jobs great-paying jobs? No, they were not. But 22 million jobs is a significant number of new jobs. Under the Bush administration, less than 6 million new jobs were created--22 million versus 6 million.

During the Clinton administration, 6 million Americans were lifted out of poverty. They went from poverty to the middle class. That is good. Under the Bush administration, the exact opposite occurred; 6 million Americans went from the middle class into poverty.

Under Clinton, median income went up. Under Bush, median income went down.

I am not quite clear how our colleague, Senator McCain, believes that ``the fundamentals of our economy are strong.'' The dynamic of what is going on in this country economically is that under the Bush-McCain economic policies, 99 percent of Americans have been net losers under President Bush's tax-and-spend policies. What we are seeing is a historical shift, a redistribution of wealth and income from the middle class to the very wealthy. We are talking about hundreds of billions of dollars going out of the pockets of the middle class, ending up in the pockets of the wealthiest 1 percent.

I sit on the Budget Committee. I have some sense of where this country is spending its money and where this country is not spending its money. I have very great concerns that 4 more years of Bush's policies, in which we continue to give huge tax breaks to the wealthiest 1 percent, while underfunding the needs of the middle class and working families, while ignoring our environment, while not investing in sustainable energy, while maintaining an absurd health care policy in which health care costs rise and in which more and more people are underinsured--I fear that 4 more years of those policies will create a situation from which the middle class of this country may never recover.

What the American dream has always been about is that parents work very hard--that was certainly the case within my family--to try to see their kids do better than they did. My parents never went to college. My parents never had much money. My parents never in a million years would have dreamed that their son would be a Senator. That is way outside their wildest dreams. They worked hard so my brother and I could have a better life economically than they did.

What I worry about--and it is not just me, it is economists all over this country who are now looking at our economy, the fact that we are shedding millions of good-paying, blue-collar jobs, that we are shedding millions of good-paying, white-collar jobs--what economists are now saying is that for the first time in the history of this country our kids, the young people, our grandchildren, if we do not reverse tack, will have a lower standard of living than their parents.

In other words, the American dream, which is what the middle class has been all about, is now turned upside down. There are large numbers of working people today who are earning less money than their parents did while living in less adequate housing than their parents did. It seems to me, if there is anything we have learned over the last 8 years--in which President Bush has given an incredible amount of tax breaks to people who do not need them, in which we have deregulated industry, where we have ignored global warming and investing in sustainable energy--it seems to me, if there is anything we have learned in the last 8 years, it is that this trickle-down economics of tax breaks for billionaires and cutting back on the needs of ordinary people is not the direction in which this country should be moving.

Please count me in as someone who does not believe, as Senator McCain does, that ``the fundamentals of this economy are strong.'' I think the middle class is being shaken right now. People are frightened, and we need a new course for this country.

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

Mr. President, I would just concur, if I might, with the fine words of Senator Reid. I have not known Senator Warner all that long, but clearly he is what a Senator should be. He is thoughtful, intelligent, and respectful of other points of view. While he and I may not agree on every issue, I have appreciated working with him, and I applaud him for his service to this country.

Mr. President, I did want to say a word or two on the Defense authorization bill and to indicate that my staff has been working with the staff of Senators Levin and Warner. I hope we can work out an agreement on an important amendment I have authored along with Senators Feingold and Whitehouse.

Mr. President, this country has a $9.7 trillion national debt. In addition, we obviously have enormous unmet infrastructure needs and social needs. Every American who drives on the road or goes over a bridge understands that we need to spend billions of dollars rebuilding our infrastructure. Forty-six million Americans have no health insurance. We have the highest rate of childhood poverty in the industrialized world. In other words, we as a nation have enormous needs, and it is incumbent upon the Congress to do everything we can to take a hard look at fraud, waste, and abuse in every agency of the U.S. Government, including the Defense Department.

I know many of my colleagues come down here and take a hard look at this issue. They take a hard look at that issue, but for some reason or another, looking at the Defense Department seems to be off their radar screen, and I think that is wrong. I think that is especially wrong given the fact that the budget we are looking at right now for the Defense Department is over $500 billion, excluding the money we spent in Iraq and Afghanistan, which is more than half of the discretionary budget of our country. So it seems to me that with regard to any of the agencies out there, we should be very active in taking a hard look at the waste, fraud, and abuse that takes place within the Defense authorization bill.

The amendment I am offering with Senators Feingold and Whitehouse is pretty simple and straightforward. Today, more than half of the spare parts in the Air Force warehouses--over $18 billion--are not needed. That is $18 billion in spare parts which are not needed. In fact, if you can believe it, the Air Force has on order $235 million in inventory already identified as ready for disposal. They are spending $235 million to bring inventory in which is going to go out because they do not need it. That may make sense to somebody, but it certainly does not make sense to me.

The truth is that this type of wasteful practice has gone on year after year, resulting in an enormous waste of taxpayer money, and it must be ended. Our amendment does three things: No. 1, it requires the Secretary of Defense to develop a comprehensive plan for improving the inventory system. No. 2, it requires the certification to Congress that the Army, Navy, Air Force, and Defense Logistics Agency have reduced their secondary inventory. No. 3, it fences off $100 million in inventory purchases until the Secretary of Defense makes required certifications.

Mr. President, I would remind the Members of the Senate of one of the most significant speeches ever given by a President of the United States, and that President was Dwight David Eisenhower, who, as all Americans should know, was a five-star general and the military commander of Europe during World War II. He was, in fact, one of the great heroes in the defeat of nazism. Eisenhower, who became President in 1952--though it is not widely known--was extremely vocal in taking on not only Democrats--he was a Republican--but Republicans as well in saying that every nickel we spent on excess and wasteful military spending--something which he knew something about as a former five-star general--was simply taking money away from the needs of the American people.

A few days before he left office in 1961, President Eisenhower gave one of the most prophetic speeches ever made from the White House, and here is what Eisenhower said:

In the councils of Government, we must guard against the

acquisition of unwarranted influence, whether sought or

unsought, by the military-industrial complex. The potential

for the disastrous rise of misplaced power exists and will

persist.

This is what Eisenhower said before he left office in 1961. He was talking then about the military industrial

complex. Well, let me tell you something. If he was worried about the military industrial complex and the influence they have in distorting national priorities in this country in 1961, I can only imagine what he would think about the power of the military industrial complex today.

So, Mr. President, clearly we want to have a very strong defense, clearly we want to make sure our soldiers have all of the equipment they need, but we have to take a hard look at the Defense Department, as we do at every other agency of Government, and I would hope very much that the amendment Senators Feingold, Whitehouse, and I have offered will, in fact, be accepted.

Mr. President, I ask unanimous consent that when the Senate completes its business today, it stand adjourned until 3 p.m., Monday, September 15; 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 the Senate then resume consideration of S. 3001, the Defense authorization bill, with no motions to proceed in order during Monday's session. I further ask that the mandatory quorum under rule XXII be waived and that the filing deadline for first-degree amendments be 4 p.m. Monday.

Mr. President, today Senator Reid filed cloture on the Defense authorization bill. Senators have until 4 p.m. on Monday to file germane amendments. The cloture vote will occur on Tuesday. As previously announced, there will be no rollcall votes on Monday.

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

Yes.

Mr. President, a little while ago Senator Grassley of Iowa was down on the floor critiquing Senator Obama's tax plan in some detail. Right now, I am not prepared to refute what Senator Grassley said, although I strongly disagree with his conclusions. But I did wish to talk a little bit about some of the differences I perceive between Senator McCain and the proposals he is bringing forth in terms of what Senator Obama has been talking about.

I, also, most importantly, wish to make the point--and I think Senator McCain would be upfront in admitting--that if he is elected President, what we are going to be seeing is 4 more years of the policies we have seen in this country for the last 8 years, which have been a disaster for the middle class and working families of this country. I wish to spend a few moments on that.

Since President Bush has been in office, nearly 6 million middle- class Americans have slipped out of the middle class and are now in poverty. I can tell you that all over this country--in my State of Vermont but all over this country--people who used to believe they were securely in the middle class, people who looked to the future with optimism, are now lining up in front of emergency food shelves because the wages they are earning are simply not enough to sustain their families. We are seeing a run on emergency food shelves all over America from working families.

I can tell you that in Vermont and throughout the northern tier of this country, people are frightened to death about the coming winter because in many instances they simply do not have the money to pay the fuel bills which will keep their homes warm this winter.

Since George W. Bush has been in office, median household income has declined by over $2,100 for working-age Americans. That is a huge drop.

Since President Bush has been in office, over 4 million Americans have lost their pensions. People who have worked their entire lives at a company with the expectation that when they retired there would be a defined pension plan available to them--that has not happened in 4 million instances.

Since George W. Bush has been President, 7 million Americans have lost their health insurance and the cost of health care has soared and more and more people are underinsured.

Since President Bush has been in office, more than 3 million manufacturing jobs have been lost, as corporate America has thrown people out on the street, moved to China, moved to Vietnam, moved to any country where they can pay people a few pennies an hour.

Since George W. Bush has been in office, nearly half a million jobs have been lost over the last 6 months alone, and the unemployment rate today is over 6 percent.

I ask you: Do we need to continue these economic policies which have been such a disaster for the middle class and working families in our country? Do we need 4 more years of these disastrous economic policies?

Since George W. Bush has been President, total consumer debt has more than doubled. Everybody knows that. Everybody we know almost is in debt. We have a personal savings rate in this country today which is zero.

Since President Bush has been in office, home foreclosures are the highest on record. There are huge numbers of foreclosures all over this country. In 2007, the typical American family paid over $1,700 more on their mortgage payments.

Is that a record, is that a series of policies that this country wants to continue for another 4 years? I think not--not for ordinary people. If you are a millionaire or a billionaire, I could understand that but certainly not for the average American family.

Since George W. Bush has been President, Americans are now paying $2,100 more for gasoline, $200 more for food, $1,500 more on childcare expenses, $1,000 more for a college education, $350 more for health insurance, $600 more for afterschool costs, and so forth.

The bottom line is, the Bush economic policies have been a disaster for the middle class and for working families and the only people who have benefited from these policies are the people on the top. I do not believe we need a President in Mr. McCain who is going to emulate these economic policies to the detriment of tens of millions of working families.

When Bill Clinton was in office--and I have to tell you, as an Independent, I had strong disagreements with President Clinton on a number of issues, including his trade policies, but when President Clinton was in office, 22.7 million new jobs were created over that 8- year period. That is a strong record of job creation. Since President Bush has been in office, we have created fewer than 6 million new jobs. Mr. President, 22.7 million, fewer than 6 million, that is a real difference.

Under President Clinton, 6 million Americans were lifted out of poverty. That is pretty good. Under President George W. Bush, over the same period of time, 6 million Americans have slipped out of the middle class and into poverty. Under President Clinton, 6 million people rise above poverty; under President Bush, 6 million more Americans slip into poverty.

Are those the economic policies we want to continue for another 4 years? We have a national debt right now which is an incredible disgrace. It is a debt we are leaving to our kids and our grandchildren. I always find it ironic that our Republican friends pose as the party of fiscal responsibility. Yes, they are staying up nights worrying about earmarks, worrying about everything.

Under President George W. Bush, the national debt has increased by $3 trillion. We are closing in on $10 trillion. Under President Clinton, we had recordbreaking surpluses as far as the eye could see.

I think there is a real difference between the economic policies we have seen under President Bush over the last 8 years and the economic policies we saw under President Clinton the previous 8 years. The difference is that under President Clinton, the middle class grew and expanded, poverty went down. Under President Bush, the middle class shrunk, poverty went up.

But I have to be honest. Under President Bush, there have been people who have done very well. While 90 percent of the American people have seen their incomes go down in the last 8 years, we do have to acknowledge that the people on top are not only doing well, they are doing fantastically well. As an economic stratum among the top 1 percent, those folks are doing better than at any time since the 1920s. In fact, the wealthiest 15,000 American families received a 57-percent increase in income under President Bush.

We now have--and we do not talk about it too much--the absurd situation that the top one-tenth of 1 percent earn more income than the bottom 50 percent. Now, I know a lot of folks get up here and they talk about family values and they talk about morality. Let me go on record as saying I believe it is immoral that the top one-tenth of 1 percent earn more income than the bottom 50 percent.

While the middle class shrinks and poverty increases, the average income of the top 400--top 400--American tax filers--and that represents 3 out of every 1 million taxpayers of this country--has more than doubled under President George W. Bush, going from a mere $104 million in 2002--how do you get by on a mere $104 million? They were scraping by. But the good news is, by 2005, that $104 million went up to $214 million a year.

Adding insult to injury, the effective tax rate of the richest 400 people, whose incomes are exploding, has nearly dropped in half, from 30 percent in 1995 to only 18 percent in 2005, because of the Bush tax cuts for the rich.

It is not just income; it is wealth, also. The wealth--that is the accumulated income of the richest 400 Americans--has also soared under President Bush, going from a mere--now, we are talking about 400 families. Mr. President, 400 families had an aggregate wealth of $290 billion. When President Bush came in, their wealth was $290 billion, and it went to $1.5 trillion by the year 2006--$1.5 trillion for 400 Americans, and in our country today, we have the highest rate of childhood poverty of any country on Earth. We have 46 million Americans without any health insurance.

I raise these issues to talk about what is going on in our society today economically, to point out that the policies of President George W. Bush have very clearly worked if you are a millionaire or a billionaire. They have been a disaster for you if you are in the middle class or a working person. I commend Senator McCain for being pretty honest and straightforward in saying he wants to continue those policies: more tax breaks for millionaires and billionaires, more tax breaks for the largest corporations in our country, more efforts to privatize Social Security, more efforts to cut back on programs desperately needed by working families and low-income people.

So the thrust of what I wished to say this evening--and I was compelled to come down here because I heard Senator Grassley speaking before; and Senator Grassley, as I indicated earlier, was very critical of Senator Obama's tax policies, and I disagree with Senator Grassley's conclusion. But I think if one is going to talk about Senator Obama's tax policies, it is important to talk about Senator McCain's overall economic policies which are going to be 4 more years of Bush's policies. This country--at least the middle class of this country, in my view--cannot survive 4 more years of those policies. So that is about all I wanted to say this evening.

I thank you, and I yield the floor. I suggest the absence of a quorum.

Absolutely.

I say to the Senator, I listened to your speech.

Mr. President, I ask unanimous consent to speak for 20 minutes in morning business.

Mr. President, the legislation we are dealing with today authorizes more than $500 billion, and even in Washington that is a heck of a lot of money. That expenditure comes at a time when we have massive amounts of unmet needs in our country, when there is a crumbling infrastructure, a need to invest in sustainable energy, a need to address education, and many other needs. On top of all of that, we are looking at a $9.5 trillion national debt and a record-breaking deficit.

I hear many of my colleagues come to the floor and speak about waste and fraud in all kinds of agencies and, frankly, that is appropriate. Our job as Members of Congress is to make sure we do our best to see that not one nickel--not one nickel--is spent in waste or in fraud or unwisely. But just as we should do that with the Department of Agriculture or with Human Services, we should also do it with the Defense Department; in fact, even more so with the Defense Department, because their budget is so huge--$500 billion at a time of massive amounts of unmet needs in this country. It appears that not a week goes by when one doesn't open a newspaper or see a television program which deals with another example of horrendous waste, fraud, or abuse which takes place within the Department of Defense.

I know my colleagues on the Defense Committee, Senator Levin and Senator Warner, are aware of these things and they are trying, but this is tough stuff. I think we have to raise our profile in addressing this waste, fraud, and abuse.

Just some examples: In March of this year, we learned that a 22-year- old Defense contractor peddled as much as $300 million in old ammunition, much of it defective, to the Afghan Army and to their police forces. That is right. AEY, a fly-by-night company, landed the huge contract, despite its record of botched dealings with the State Department and Defense Department. In fact, the State Department had placed this company on a watch list of companies suspected of illegal arms transactions.

Further, the Pentagon inspector general revealed that $321 million was paid out to cover salaries of 1,000 anonymous employees in the Iraqi Ministry of Finance. That amounts to $320,000 per employee--not bad in Iraq where people do very well if they make $50 or $60 a week, but we are not even sure that the employees saw any of this money.

We also learned not terribly long ago that the Army ousted the contracting officer overseeing Kellogg, Brown & Root's huge Iraq support contract when this distinguished public servant refused to approve paying the company more than $1 billion in questionable charges. In other words, he did his job. He took a hard look at where this money was going. There were red flags popping up all over the place. He said: Wait a minute. We are not going to pay this money. His reward was not a commendation but his firing.

And on and on it goes. The Air Force paid a private U.S. contractor $32 million to construct a Ramadi, Iraq airbase. That is OK, except the only problem is the contractor cashed a check and the facility was never built--$32 million for a project never undertaken.

Another contractor was paid $142 million to construct Iraqi prisons, fire stations, and police facilities that were either never started or never completed--$142 million.

It is absolutely essential for us to provide the Pentagon with the budgetary means they need within that huge budget to root out waste, fraud, and abuse by contractors in war zones overseas. We also must take a close look at how money is misspent here at home--not just in Iraq or Afghanistan. The Air Force--the Air Force, needless to say--has a few airplanes, but apparently cannot ship a package directly from a depot in Corpus Christi, TX, to a National Guard unit in Oklahoma. Because of outdated freight forwarding rules, investigators discovered that one package took a 2,243-mile detour through Houston, TX, to Fort Wayne, IN, and then on to Dallas before it arrived at its destination in Oklahoma. The GAO is investigating the ridiculous shipping regulations that cost taxpayers millions of dollars.

Now, are all of these examples simply so-called bad apples or do they more likely represent a broken system with inadequate oversight? In my view, unfortunately, it is the latter. I think we have a broken system. I think we have billions and billions of taxpayers' dollars being wasted and not going where they need to go, which is to defend our country. The Pentagon's leaders have not done enough to ensure that a dollar spent means a dollar gained in national security.

Frankly, this is not a new problem. In 1940, Senator Harry Truman investigated waste and fraud by the U.S. military. During World War II he proposed the creation of a Senate special committee to investigate the national defense program. The Truman committee identified way back then in the 1940s more than $15 billion in unnecessary and fraudulent defense spending. That is a huge amount of money. As Senator Truman put it at the time:

We intend to see that no man or corporate group of men

shall profit inordinately on the blood of the boys in the fox

holes.

I think what Truman said in the 1940s is absolutely true today.

Was Harry Truman unpatriotic for demanding increased congressional oversight on the War Department and defense contractors at a moment of national crisis during World War II? The answer is, of course, no, he was not. He simply demanded that, in his words:

Each dollar expended for war purposes would produce a

dollar's worth of the necessary war supplies.

I think that is certainly a reasonable request supported by every taxpayer in this country.

That is why last year I and the Presiding Officer joined with other freshmen colleagues to introduce legislation calling for the creation of a commission on war contracting modeled on the Truman committee. We need such a bipartisan effort more now than ever. Today, government auditors have compiled lists of countless examples of risky and inadequate practices by the Defense Department in overseeing contracts.

The problem is not just private contractors. The Department needs to adopt better practices to stop blatant examples of wasteful and overpriced purchases.

Some examples:

The GAO--the Government Accountability Office--recently assessed 72 major weapons acquisition programs and reported a colossal $295 billion in cost overruns on a $1.6 trillion contract portfolio--$295 billion in cost overruns. That is not a bad apple, that is not an aberration, that speaks to a system that is significantly broken. What is more, on average, these systems are delivered 21 months late. So these contractors end up getting far more than they were originally supposed to get and, to boot, they are almost 2 years late on delivering the product.

It gets even worse than that. The Defense Department has shelled out billions of dollars in bonuses to contractors who don't deserve them. According to one study, award and incentive fees totaling $8 billion were granted even when the contractors did not deserve the bonuses under the Pentagon's own rules. What a bonus is supposed to be about is you get a reward when you do your job well, when you come in perhaps under contract, when you come in earlier than you had agreed to. That is what a bonus is. But unfortunately, these guys are getting these bonuses even when they perform poorly, and that is clearly unacceptable.

I wish to commend my colleagues, Senator Levin and Senator Warner, for their initiative to establish a director of independent cost assessment. It is time for this Congress to impose effective acquisition controls and require the Pentagon to put its financial house in order. Even the Pentagon's own inspector general has admitted that:

The rapid growth of the DOD budget since fiscal year 2000

leaves the department increasingly more vulnerable to the

fraud,

waste, and abuse that undermines the department's mission.

That is the Pentagon's own inspector general.

So it is time to engage in a serious debate over this Bush defense budget that elevates gold-plated technologies and huge contractor payouts over cogent and sensible strategy.

A little historical perspective is instructive. President Dwight David Eisenhower, a five-star general and the military commander of Europe during World War II, deplored excessive military spending and its diversion of resources away from pressing public needs--Dwight D. Eisenhower. A few days before he left office in 1961, President Eisenhower gave one of the most prophetic speeches ever given in the White House. Here is what Eisenhower--a Republican, I should add--what Eisenhower said:

In the councils of government, we must guard against the

acquisition of unwarranted influence, whether sought or

unsought, by the military industrial complex. The potential

for the disastrous rise of misplaced power exists and will

persist.--Dwight David Eisenhower.

Fast forward 48 years to the last months of George W. Bush's Presidency. It is remarkable how prescient Eisenhower's concerns were.

Today the budget of President Bush calls for a $515 billion Pentagon budget. This is in addition--this is in addition--to the $200 billion a year being spent on the wars in Iraq and Afghanistan, and it also does not include $16 billion spent on nuclear weapons. That is why I proposed an amendment--a very modest amendment, I might say--to address one of the more egregious examples of wasteful spending in the Federal Government. The incredible amount of unneeded spare parts--what we are talking about is unneeded spare parts and other items--in the Army, Navy, Air Force, and other Department of Defense agency warehouses is measured in the billions of dollars. What we are talking about is unneeded spare parts. They don't need it, billions of dollars of unneeded spare parts.

Fixing the military inventory systems is the reason behind the amendment I have authored, along with Senator Feingold and Senator Whitehouse.

The Government Accountability Office--the GAO--has placed the Department of Defense inventory system on ``high risk'' lists year in and year out. In other words, there is a red flag attached to this line item.

The unneeded spare parts inventory and the inefficient inventory management systems are literally costing the taxpayers millions and millions of dollars each year. Worse, these unnecessary spare parts are clogging up the supply system, costing millions for storage, and are not providing the support needed for our service men and women for defending our country. More than half of the Air Force's secondary inventory--an average of $31.4 billion--was not needed to support service requirements. That is right. More than $18 billion of its on- hand spare parts are beyond the needs of the Air Force. Imagine that: $18 billion in unneeded spare parts. We have Air Force warehouses full of parts that are simply not needed.

It gets even worse than that. The Air Force has on order $235 million in inventory already identified as ready for disposal. In case you didn't catch that: $235 million in inventory already identified as ready for disposal. So $235 million worth of parts not even delivered to the Air Force's warehouses will be ready for disposal by the time they arrive. Now, that may make sense to somebody--maybe the people who make money producing the stuff. It certainly does not make sense to me or, I expect, anybody else in this country. By the way, this is almost 20 percent of its total on-order inventory. It is a huge amount of inventory.

The Air Force has redefined terms and created new categories such as ``Additional Applications Anticipated,'' ``Uneconomical to Terminate,'' ``Management Decision,'' and ``Data Error.'' What they mean by data error is a series of computer entry mistakes amounting to $96.5 million during one recent 3-month period alone. To my way of thinking, this is further evidence of the Air Force's inability to manage its inventory program. If data errors are rampant in the system, fix them. If the inventory problems can't be corrected without costing even more money, then something is wrong with the system.

This is not just an Air Force problem; it is Pentagon-wide. The numbers for the Navy and Army are also extremely troubling. The Army's numbers are incomplete because the Army could not provide data from two major agencies, including the communications and electronics commands, because their inventory computer systems were not compatible with other Army computer systems. This is with a budget of $500 billion and we can't get computers to talk to each other. Ironically, the communications and electronics command is one of the commands responsible for Army hardware and software acquisition.

This underscores the serious problem of the inability of the Defense Department computer systems to interface with each other. My staff was actually told by an Air Force material command manager that Air Force inventory officers are still actually relying on computer systems that are based on decades-old designs.

Year after year, the nonpartisan research arm of Congress has exhorted the Pentagon to, 1, provide incentives to reduce purchases of unneeded on-order inventory; 2, conduct a comprehensive assessment of unneeded inventory items on hand; and, 3, take measures to address fluctuations in demand that produce these huge inventories.

Clearly, something must be done to set things right. It is time to get the Pentagon inventory system up to modern practices.

What does our amendment do? It does a few things. First, the amendment, offered by Senators Feingold, Whitehouse, and myself, will require the Secretary of Defense to develop a comprehensive plan for improving the inventory system, including each service's plan to improve audit systems for reducing the gap between projected requirements and actual requirements, improvements to information technology systems, personnel and training needs, contract reviews, and other relevant policy changes.

Second, this amendment will require a certification to Congress that the Army, Navy, Air Force, and Defense Logistics Agency have reduced their secondary inventory.

Third, this amendment strengthens the certification process by fencing off $100 million in inventory purchases until the Secretary of Defense makes the required certifications.

This is a small but critical step toward fixing the DOD's inventory system. It is time for this Congress to impose long-needed improvement and require the Pentagon to put its house in order.

Frankly, this is just a small step forward. We have a lot more to do. This country faces enormous problems. We need money spent in many areas. We don't need to be wasting tens of billions of dollars. I look forward to working with my fellow Senators to see that this amendment becomes law.

Mr. President, I ask unanimous consent that the Judiciary Committee be discharged from further consideration and the Senate now proceed to the consideration of S. Res. 645.

Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, and the motion to reconsider be laid upon the table.