Floor Statements

My understanding is that we would now yield 6 minutes to the Senator from Illinois, after which I have been asked to call for a quorum call.

Mr. President, reserving the right to object--and I will not object--I want to ask the Senator from Connecticut if he might add to that unanimous-consent request that following that, amendment No. 4109, which I have filed, be considered at that point.

Let me explain. I had filed an amendment. We have modified it. The amendment, properly filed, as I had modified it, is amendment No. 4109. It is the amendment that deals with the issue of naked credit default swaps. As my colleague knows, I have been here for 2 weeks attempting to get it pending.

I ask that the unanimous consent request be modified to include making amendment 4109 pending following the disposition of the other two amendments.

I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, my understanding is that there is a question now about how to proceed with respect to which amendments might be allowed to be offered by the two sides. It appears to me, at least from my perspective, that some have decided we will only allow amendments we prefer to be allowed and others who have amendments will not be allowed to offer amendments from this point on.

My colleagues know I have been here I guess a couple of weeks with an amendment. It is filed, No. 4109. It deals with trillions and trillions of dollars of what are called naked credit default swaps--one of the significant problems that caused part of the near collapse of our economy. I have been here now attempting to get this amendment pending because if there is a cloture vote tomorrow, those amendments that are not pending will not be allowed to be offered and voted upon. I am attempting to get this pending.

What we have appears to me to be gatekeepers who decide we will only allow these amendments through the gate, and someone else, unnamed, unknown, will decide that we have to have somebody else object for them. So the result is that an amendment such as this--and I assume there are others as well--would not be able to be considered. To have the negotiations between the manager and the ranking member now come together and decide, well, only amendments they will allow us to offer will be offered--if that were the standard, maybe we could go back and I could think of half a dozen or a dozen amendments that we already had offered and had to vote on that probably we should have said: Let's not offer those. Those are inconvenient, uncomfortable. I don't want to vote on that. But we have not done that. None of us have done that.

Now, all of a sudden, we have been told: Someone else wants us to object, so therefore you can't offer your amendment. That is just, in my judgment, not an acceptable way to proceed.

While I guess we are waiting, I encourage somebody, if they wonder whether the amendment I have filed, No. 4109, dealing with naked credit default swaps--if they are wondering whether there is an urgency to this issue, read the book ``The Big Short'' by Michael Lewis. When you are finished, come back to the floor and ask if you can support this amendment or how quickly you can support this amendment. It is unbelievably necessary to do if, in fact, we are going to finish financial reform and claim we have reformed the financial system.

It is pretty hard for me to understand how we proceed if the point is that someone else has decided exactly which amendments will be tolerable to be considered and those of us who have amendments that are a little more difficult, perhaps a little more aggressive in trying to fix those things, shut the door on the kinds of practices that

caused the near collapse of the American economy, if our amendments are inconvenient to someone, we are told: You will not have an opportunity to do this. We will just pick other amendments that we think are fine, amendments that don't have quite as much bark or bite to them. We will consider those amendments along the way, and when we get to the end, if your amendment is not considered, that is just tough luck.

It is much more than tough luck, it seems to me, for the American people.

I have a series of charts. I would like to offer the amendment and have it pending. I have previously been here asking unanimous consent. It was objected to. I have spoken earlier on the floor and was told it would be considered.

If I may have the attention of my colleague from Connecticut, we didn't get to that second portion of the previous UC. Let me ask unanimous consent that following whatever other business has previously been agreed to, amendment No. 4109, which I have properly filed, be considered pending and that we would be able to consider amendment No. 4109.

Will the Senator yield for a question?

Has that happened at this point? I don't know of a circumstance where someone, during debate on this bill, has objected to setting the pending amendment aside. I have seen it happen, but that is not what has happened on this bill.

Mr. President, will the Senator yield for a further question?

It is not just me. It is my understanding that the Levin- Merkley amendment is in the same position. So it is a circumstance, it appears to me, where someone said: Well, now, it is inconvenient for us to vote on things that are a little bit controversial or have a little more bite to address these issues. Because it is inconvenient, we are going to object, so you are not going to be able to offer those amendments. I do not know how we got to this cliff, but falling off that cliff is not acceptable to me. We have been voting for 2 weeks and people have been able to offer amendments. I voted on amendments I did not want to vote on from the other side. They had a right to offer them, and I voted on them. That is fine.

Was there a moment when we decided, all of a sudden, that the other side will have a veto authority over our ability to offer amendments of any consequence? I do not know when that happened, but that is totally inappropriate, given the couple weeks we have been through here.

Well, Mr. President, listen, my objective is not to obstruct or to try to slow anything down. My objective is to allow people to offer amendments, especially those who have been here for some long while, to offer amendments that are consequential relative to the issue of financial reform.

If from this day forward, we have decided--or from today forward we have decided that if someone on the other side--who is at this point unknown--is going to object to amendments that are uncomfortable, amendments that I think will strengthen the bill, this is not much of a process anymore. We will, I guess, pick out the amendments that deal with tourism or babies or whatever it is that is uncontroversial to everybody and pass those and then go on to final passage. Those who had other amendments of consequence are told: Someone objected. We are not quite sure who.

So I guess what I can do is say that I will object to having people decide we will only deal with noncontroversial amendments and that those amendments of substantial consequence to this bill are not relevant enough to be considered.

So I wish that were not the case. But I am not going to sit here and say: Yes, go ahead and just pass over these amendments and pick out some amendments you like. If everybody can agree on amendments we like, you can offer them and we will have votes and no one will have concern over it. But if there are amendments that somebody does not like, you are not going to be able to offer them because someone is going to object.

It does not make much sense to me.

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

Mr. President, I am going to speak for a few moments about the amendment I just referenced, amendment No. 4109, which was filed and to which there has now been an objection. As I have indicated to my colleague, objections run both ways. I could sit here and object as well to most things that are going to go on here, if we have a gatekeeper or several gatekeepers who decide that two amendments that would get a little tougher on Wall Street are amendments they don't want to vote on; if they don't want to countenance an amendment that would tighten the strings just a little bit.

Let me speak about what this amendment is because it sounds like a foreign language, ``naked credit default swaps.'' ``Credit default swaps'' by itself sounds like a foreign language. The reason is they haven't been around all that long. This is an exotic financial instrument that was created to allow certain things to happen on Wall Street between banks and big hedge funds and so on. If we have not yet at this point understood the danger of this unbelievable orgy of speculation in credit default swaps--and especially what are called naked credit default swaps--then I guess we are destined to never fully understand what happened, and that is fine. Maybe some people don't want to know what happened.

A naked credit default swap is pretty simple. Someone out there needs some money, so they issue bonds. Someone else buys the bonds. Now they hold the bonds and the person who issued them has the money. The person who bought the bonds wants to make sure the person who issued the bonds won't default, so they want to buy an insurance policy from someone else, a credit default

swap. So for a small amount of money, they buy an insurance policy against the bonds defaulting. It is a relatively recent phenomenon where all of this has been created.

Normally speaking, if someone issued bonds, the other people bought the bonds and they did due diligence on the other side to decide if this is a good risk, and that is the way it worked. Now they buy insurance called credit default swaps.

The difficulty is credit default swaps are now called naked credit default swaps if, in fact, they have no insurable interest at all. That is a credit default swap that bets that someone who issued bonds is going to default, despite the fact that neither party to this transaction ever has purchased any of those bonds. They don't have an insurable interest in the bonds; they just made a bet. They have said: We have not bought those bonds over there. But those bonds were issued, and we would like to make a wager. We think those bonds are probably going to default. Someone else says: I don't think they will. So you have a naked credit default swap with no insurable interest in anything.

Why is that troublesome? Well, I can't buy fire insurance on the house of the Presiding Officer in Alaska. Why would they not allow me to buy fire insurance on his house? Because I don't have an interest in his house, and they don't want about 10 or 15 people having a fire insurance policy on his house. The only way you can get fire insurance is if you have an insurable interest. I can't buy a life insurance policy on someone else's life because I don't have an insurable interest.

Those are rules most of us understand. You can't buy fire insurance against somebody else's house; you can't buy a life insurance policy against somebody else's life. But Wall Street has discovered there is a new way to allow someone to buy insurance policies or speculate in certain kinds of insurance without ever having an interest; that is, allowing two parties to speculate on whether a third party might default on a bond issue they placed with a fourth party, despite the fact that the first two parties have no interest in that at all. It is just as if they went to Las Vegas and one bet on red and the other bet against red on the roulette wheel. It is just a flatout bet. It is not an investment; it is just a bet.

Let me talk about how prevalent this is, just because I think it is important. There was about $10.9 trillion in naked credit default swaps held by commercial banks in the fourth quarter of last year; $10.9 trillion held by commercial banks. Those are institutions, by the way, whose deposits are insured by us, by the American taxpayer, by the FDIC. Up to $19.9 trillion of naked credit default swaps are held by the top 25 holding companies.

It is estimated by one expert that as much as 80 percent of the credit default swap market is traded by firms that don't own the underlying debt. There is also a United Kingdom report shared by the Congressional Research Service that says only 20 percent of the credit default swaps are estimated to be covered. That means 80 percent of all of this paper that is put out there in credit default swaps is so- called naked. It has no insurable interest. It is a bet rather than an investment.

Let me just show what some of the experts are saying about this. One of the editors of the Financial Times says: I can't understand why we are still allowing the trade in credit default swaps--he meant naked swaps--without ownership of the underlying securities. A generalized ban on so-called naked CDS's should be a no-brainer.

It ought to be a no-brainer. It is not a no-brainer in this Chamber, apparently. A naked CDS purchase means someone takes out insurance on bonds without actually owning them. It is a purely speculative gamble. There is not one social or economic benefit.

My amendment is trying to shut this down, but I am being blocked by those who don't want us to get tough on Wall Street.

Charlie Munger, who is the partner of Warren Buffett and who has spoken a lot about these issues, said:

If I were the governor of the world I would eliminate

credit default swaps entirely, 100 percent. That's the best

solution. It isn't as though the economic world didn't

function quite well without it and it isn't as though what

has happened has been so wonderfully desirable that we should

logically want more of it.

Do we need to go to the edge of a cliff again with this economy, with tens of trillions of dollars of notional value of credit default swaps before we decide this is a problem for our country and for our future?

Again, the associated editor of the Financial Times:

Another argument I have heard from a lobbyist is that naked

CDS's allow investors to hedge more effectively. That is like

saying that a bank robbery brings benefits to the robber.

Well, I guess so.

George Soros, a pretty good investor I might say, made $3 billion last year, I am told in the reports:

CDS's are toxic instruments whose use ought to be strictly

regulated: Only those who own the underlying bonds ought to

be allowed to buy them.

Well, those are a few thoughts from some people of consequence: editor of the Financial Times, Charlie Munger; George Soros; and others. But it describes a very significant problem. It describes, in my judgment, a fairly large portion of what caused this country's economy to teeter on the edge of a cliff.

The Treasury Secretary one day comes and leans across a lectern on a Friday and says to us: You need to ante up $700 billion and pass a three-page bill in 3 days or the economy might collapse. Now, a year and a half has passed, a little more, and some, I think, have too quickly forgotten the lessons.

So the question is, Are we going to do something about naked credit default swaps, about the unbelievable orgy of speculation, the bubble of speculation that exists to the tune of tens of trillions of dollars?

Let me read it again:

Up to $10.9 trillion in naked credit default swaps were

held by commercial banks in this country in the fourth

quarter of 2009.

I am talking about up to $10.9 trillion of naked credit default swaps in the bowels of commercial banks. These are institutions that we guarantee, we underwrite.

I don't understand at all the notion that we should be prevented from addressing this issue. It may be that we have people here willing to shake the pompoms and be cheerleaders for naked credit default swaps. Good for you, if that is the way you feel. It is just you have missed a significant chapter of American financial history. But if you feel that way, vote against my legislation. My legislation would ban the use of naked credit default swaps.

After the phase-in period, they are gone. If you don't have

an insurable interest, they are gone. It is a simple enough

proposition to say: Why should we have 5 or 10 times the

number of insurance policies against bonds than there are

bonds to insure? Why should we allow that? We don't allow it

in other circumstances.

I understand the offering of this amendment and the shutting down of naked credit default swaps will cost Wall Street a substantial amount of money. They will not get fees on these things. I understand that. This is all about churning and getting fees and making a lot of money. I understand all that. I also understand sometimes this notion of making a lot of money in a short period of time by cutting corners and by doing things that aren't appropriate is the wrong thing.

My colleagues know and I know that we saw banks being robbed in this country. Yes, we saw banks being robbed in the last several years. In the old days, when I used to watch the western movies, you could tell who the bank robber was. They usually had a bandana, they brandished a couple of six-guns. Often they stopped a train or they ran into a bank, and that is the way they robbed things.

In the last several years, there have been some bank robberies going on in this country, and I can refer you to a lot of contemporary writing that describes the way those banks were robbed. Two people driving home from work, each making $20 million, one supervising the other in one of the biggest investment banks, loading that bank up with unbelievably risky investments because they know at the end of the day, somebody is going to lean over a lectern and say: Oh, by the way, we need to bail all these folks out.

The folks who went to the basement of the Securities and Exchange Commission, I believe, in the year 2004--

said: We need you to allow us, the biggest investment banks in the country, to extend our leverage from 12 times to 30 times and more. You need to give us the opportunity to free up some money by exacerbating the leverage capabilities we have. The Securities and Exchange Commission, ever the compliant regulatory agency, said: Yes, sir-- saluting handily in the basement of their building--absolutely, go right ahead.

By the way, one of those companies was run by Mr. Paulson who, 2 years later, came back as Treasury Secretary and leaned across the lectern and said: I need $700 billion to bail out these companies.

What was part and parcel of that which caused these companies to almost ruin this economy? Naked credit default swaps, just flatout gaming. Not investing, just betting. The question is, Do we want to continue to do that?

I fear we are going to pass a piece of legislation that does not address too big to fail. At the end of the day, we will have institutions that are still too big to fail. I have an amendment on that, but I haven't bothered because we already did one amendment on too big to fail, the Brown-Kaufman amendment. That got 33 votes, too big to fail. Banning these unbelievable speculative instruments like naked credit default swaps, if we can't do that, it is very hard, it seems to me, to climb on the high step and say we have taken on this subject. We have really made sure this isn't going to happen again. So I have an amendment that is filed, and now I am told that, no; it is inconvenient and uncomfortable for me to offer this amendment and, therefore, someone has objected.

To my colleague from Alabama, I would say I understand. He is required--when people in the caucus say there is an objection, his job is to reflect the objection of someone in his caucus. So my beef is not with him. But I would just say that it is not acceptable to me to, at 5 o'clock on Tuesday, have a process by which we have now decided that if amendments are inconvenient--getting a little too tough on Wall Street; trying to draw the strings a little tighter on things that have to be fixed in this bill--if that is the case, well, then, you know what. We are not going to allow those things to be offered. We will just sit here and offer amendments on tourism or something else equally benign.

If that is the case, then I will just sit here as well and say that is not a process I respect. It seems to me we ought to have the right to bring to this Chamber at this point, given the shadow of what we have been through as a country, the right to bring amendments to this bill that try to address some very significant problems; the right to bring them to the floor, to have a debate, and to offer them for a vote. If that is not going to be the case, then I am going to sit here and object to proceeding until it is the case.

So my colleague, Senator Bingaman, I know is here. I have more to say, but I will save it because I fully expect either to get to this amendment or to be sitting here for some long while, and I will have an opportunity again to talk about naked credit default swaps, their danger to this economy, and why, when this bill is done, it ought to include the provisions of amendment No. 4109 which bans the use of naked credit default swaps and says there is a place to gamble in America and it is not in a bank lobby.

If you want to put a Keno table or a blackjack table in a bank lobby, shame on you. We ought to pass this amendment, and, most importantly, we ought to allow amendments to be offered. I will sit here until that is the case.

I yield the floor.

Madam President, I object.

Madam President, I send a second-degree amendment to the desk to the Grassley amendment.

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

Madam President, the second-degree amendment that I have just sent to the desk to the Grassley amendment is the amendment that there has been an objection to my offering. So it is the only way, apparently, I can offer the amendment. It is the amendment dealing with naked credit default swaps.

We cannot possibly end this discussion without addressing the central issues that caused the near collapse of our economy, one of which is the unbearable speculation, the speculation in exotic financial instruments such as credit default swaps that, by the way, now is on the rise. It is not receding, it is on the rise.

The fourth quarter of last year the credit default swaps were up by 8 percent, $14 trillion in notional value, up 8 percent in the fourth quarter of last year alone. I also feel very strongly that the issue of too big to fail is a real issue. We cannot just brush it away saying: I wish it was not an issue.

The too-big-to-fail companies have gotten bigger, much bigger. Well, that is not a solution for this country's economy. The issue of betting in the lobby of our banks, as I have said, they might as well put in a Keno table or a blackjack table and wager that way. These are bets, not investments.

There are tens of trillions of dollars' worth of these bets. Because we want to tighten the laces a little on this, this amendment would ban naked credit default swaps over a period of time. Because we want to tighten the laces a bit, we have folks who object to even offering this because it would take on Wall Street. Well, you know what. That is what this legislation is about. If we go back to 2008 when Wall Street lost--I think, $36 billion net loss--and they paid out bonuses of $17 or $18 billion. They were having a carnival.

What was it all about? It was about big fees, trading all of these unbelievably speculative instruments, things that we had never heard of before--and, by the way, instruments in which they had no insurable interest. I said before you cannot buy fire insurance on someone else's house. You cannot buy life insurance on someone else's life. But what is happening is the biggest financial institutions in this country are buying and selling credit default swaps, are selling insurance policies against bonds that they will never own and have never owned.

It is like buying things they will never get from people who never had it and making fees on both sides of the transaction, except it is building a pyramid of speculation. At some point that pyramid came down and nearly took the entire American economy with it. So we now do something called financial reform.

The central question is, are we going to do it right? Are we going to be tough? Are we going to make sure we get rid of these things, the unbelievable speculation that injured this country's economy? There are trillions of dollars of them out there. And, by the way, the five largest commercial banks in this country hold 90 percent of the total credit derivatives, the $13.2 trillion of credit derivatives. They are owned by the five largest commercial banks.

Somebody said: Well, you cannot ban these things. The banking industry needs them. Oh, really? Well, if that is the case, why are only five companies doing 90 percent of the business in what are called naked credit default swaps?

I will speak about this at another time. I promised my colleague from Maine I would be a minute. I have gone well over the minute. But I will speak about the second-degree amendment at much greater length. It is the only way, apparently, I can offer an amendment.

So I believe that method, using a parliamentary technique that is perfectly legitimate, gives me an opportunity to force a vote on this amendment at some point.

It is an amendment that should have been able to have been offered as a result of an agreement on both sides to deal with real issues, in real time, on one of the most significant challenges that confront our country: how to put this financial system back together again in which the financial industry plays a very important role in the expansion of this country, as opposed to building more and more and more speculation and seeing that too-big-to-fail institutions get builder and bigger and bigger.

I yield the floor, and I will come back and speak on the second- degree at some point later.

Mr. President, I have spoken on this amendment previously and have waited patiently for several weeks to be able to have an opportunity to vote on it. We have not been able to get it pending. I now have it pending because I offered it as a second-degree amendment to the Grassley amendment.

This is an amendment that would ban the use of naked credit default swaps. You ask, how does a credit default swap get naked? It is an exotic, new financial instrument that has been developed over recent years to be traded back and forth by the big financial

institutions. In fact, 90 percent of them are traded by the five biggest financial institutions. When people say you need these--banks need these--just a handful of banks trade most of these.

What is a naked credit default swap? It means someone is buying insurance against some other instrument that they have no interest in, except they want to make a wager. I have said before that I can't buy fire insurance on the house that the Presiding Officer owns in Colorado. Why? Because I don't have an insurable interest in that house. If I went to somebody and said: I would like to buy some insurance against fire for that house, they would say: You don't own that house, so I cannot possibly sell you that policy. Also, I cannot buy a life insurance policy against my colleague from Connecticut because I don't have an insurable interest either.

But I can go buy $100 million worth of insurance, right this second, on a bond issue that was issued by some company yesterday, even though I never, ever intend to own the bond, have no interest in the bond, and don't know much about the company. I just want to bet someone who will take the opposite side of the wager. I believe the bonds will not be repaid, and the counterparty says: No, you are wrong about that. I think that company will repay its bonds. So we make a friendly wager-- kind of like one of those Saturday sports wagers. We bet. I am betting this person about the question of whether the bonds will default. It is called synthetic when it is not real or naked when it has no interest. So this would be a synthetic or a naked credit default swap.

It is a different story if I have an interest, where I actually bought those bonds--some company let the bonds and I bought them, so I am the investor in the bonds. But I want to make sure the default doesn't take me down with it, so I buy an insurance policy. That is a credit default swap that is covered. Naked means you have no interest, just a bet. Covered means it is an investment you made to try to hedge your risk on the default of the bonds.

Here is what is interesting. We expect, based on what we know to be the case, that about 80 percent of all credit default swaps are not covered or what are called naked swaps--80 percent. Some people say to us: Well, we can't get rid of these financial instruments. These are very important for normal hedging. That is absolutely absurd, total rubbish.

My amendment would say that at some point we have to ban naked credit default swaps. Mr. Pearlstein, who writes for the Washington Post, asked the question many months ago:

Why should there be more insurance policies sold on a bond

issue than there are bonds to be insured?

Why should you have 20 times more insurance policies than you do bonds? Because it is wagering, not investing.

I find myself fairly disappointed by what is happening. This is a moment of substantial consequence for our country. We came very close, they say, to a meltdown of our economy. Trillions of dollars were lost. I guess there was about $14 trillion or $15 trillion in lost value for the American people. Millions of people lost their jobs. Millions of people have lost their homes. By the way, at graduation time, when colleges all across the country are graduating these bright, young men and women who have now gotten their college diploma--they are out looking for work, and way too many of them cannot find a job because of what happened to this economy in recent years.

What happened? We created a casino economy. You didn't have to read the newspapers very much to understand what was going on. This unbelievable speculation, a bubble of speculation, occurred in virtually every single area, and there were new financial products on steroids--securitizing everything. Are you loaning somebody some money? Well, put it into a security, wrap it up and sell it to a hedge fund or an investment bank. Securitize everything. By the way, you can get some very bad stuff that is rated AAA. So sell it up. By the way, once you start selling things, you don't ever have to worry about whom you are issuing credit cards to or that you are wallpapering the room of people who don't have jobs with more credit cards. You don't have to do normal underwriting or sit across from somebody who wants to buy a house and look into their eyes and say: Tell us your income. How are you going to repay the loan if we loan you the money? You can put out liars' loans, no-doc loans. Don't document your income because we don't care. Don't pay any interest or principal now; we will put that on the back side. We will make the first 12 months of payments for you. If you have no credit or low credit, come to us--I will show you the advertisements that were on the radio, television, and newspapers: Slow credit, no credit, bad credit? We want to loan you money.

They said: Let's securitize it and we will ship it upstream and we will all make big profits and fees and we will create credit default swaps and CDOs and we will all have a great time. When the whole thing crashes down, ``Wall Street'' will have lost about $36 billion in 1 year and paid $17 billion in bonuses at the very same time.

Do you think this wasn't a carnival of greed? Of course it was. There are a number of things we ought to do and too many that we will not do in this legislation. Too big to fail ought to have meant to all of us that you are simply too big. By the way, those who were judged too big to fail and would cause a grave risk to this entire economy if that firm should fail, they have now become much larger by the actions of the Federal Government arranging marriages of companies that weren't making it. So the too-big-to-fail companies are actually much larger now, and the underlying legislation doesn't do a thing about too big to fail in terms of paring it away and deciding if you are too big to fail, you are too big and you must divest until you don't cause a grave risk to the entire economy.

In addition to the issue of too big to fail, there is the Glass- Steagall reconnection. My colleague has an amendment on that. There is this issue I am raising on naked credit default swaps. If we have decided we are not going to get rid of these financial curveballs-- financial instruments on steroids that took this country for a huge ride and stuck the American people with trillions and trillions of dollars of loss and bad debt--if we don't do that, let's not crow about what we did because this is essential, in my judgment.

This is what I think happens, as is always the case when it comes to Wall Street versus the rest of us; it is let's pretend time. This is a case of whose side are you on? Are you going to try to see if you can shut the door and deal with those issues that helped cause this near collapse of our economy or are we just going to buff it up a little bit around the edges? I am trying to tighten this bill.

I have not been able to get this amendment up, except by offering it as a second-degree amendment. My understanding is, there will be a tabling motion. Those who decide they want to table it don't want to tighten this bill, don't want to take on Wall Street on these issues. They say: No, let's let Wall Street prance around and trade naked credit default swaps. They were up 8 percent in the fourth quarter of last year. You would think somebody would learn a lesson. They had a $700 billion bailout fund and so on, so you would think they would tone it down. No. In the fourth quarter of 2009, the use of credit default swaps was up 8 percent. If one wonders how much money is involved in all these things--I have spoken before about John Paulson, whose name came up recently with Goldman in the scandal that was the subject of a congressional hearing. In 2007, he was the highest income earner on Wall Street, earning $3.6 billion--one person. When he came home and his spouse said: Honey, how are we doing? If she wanted it by the month, he could say that this month we made $300 million. If she wanted it by the day, he could say: Pretty good. It is Saturday and I made $10 million--$10 million a day, $3.6 billion a year.

There was so much money involved in all these issues, and the reason there was so much was this unbelievable binge of speculation. We can pass financial reform, and we can call it whatever we want, but if we pass it and don't put a cork in this bottle, and we fail to deal with this issue, I will tell you, we will be back and we will find a way to have to confront, once again, the creation of these unbelievable speculative issues--naked credit default

swaps--that have no insurable interest. We will regret the day we didn't address this issue head on.

I understand why there is pushback from Wall Street and why some will be nervous about voting for this. They will want to table it because they are getting pushback from Wall Street. Wall Street is wrong--dead wrong. They don't need, nor do American banks need, to be trading credit default swaps in order to make money. Yet, as I indicated to you, five of the largest financial institutions in this country have 90 percent of the credit default swaps. We think about 80 percent of them are without any insurable interest in anything. That is wagering, not investing.

This country deserves better, and the American people deserve for the Congress to stand up to Wall Street and say: You know what, the creation of these instruments exacerbated the economic troubles of this country in a significant way, and at long last it is time to put an end to it. This amendment simply bans the use of naked credit default swaps. It has a provision that says, if such a ban in a certain timeframe would cause undue--Mr. President, the Senate is not in order.

There is a provision in this legislation that, as opposed to a ban on a date certain, if that would prove to be troublesome, it would stretch out for an 18-month period by which such a ban could take effect.

Let me say this. I understand the tabling motion will be made. My hope is that colleagues who believe we ought to take on Wall Street on these issues will stand up for the American people on these issues and do the right thing on these issues, especially since we are living in the shadow of a near collapse of this economy.

My hope is that my colleagues will vote against tabling this amendment and, thereby, express their support for the amendment I am offering.

I am offering this amendment on behalf of colleagues which I will submit for the Record as well.

I yield the floor.

Mr. President, I appreciate the courtesy of my colleague from Connecticut. My colleague talks about unintended consequences. We already know the real consequences of what are called naked credit default swaps. That is all we are talking about with this amendment.

My colleague started out by talking about normal hedging by a candy manufacturer with respect to the price of sugar. That is not what this is about at all, and I am not prepared to lose a debate in which I am not involved. That is not what this is about. This is about naked credit default swaps.

My colleague says there is $25 trillion of notional value of credit default swaps. I have cited two sources--the best two of which I am aware--that says 80 percent of them--think of this--as much as 80 percent of them have no insurable interest. They are just flatout naked, just gambling, betting, not investing.

This is not a case of unintended consequences. We know the real consequences. We have already lived it and experienced it and we ought to understand that we cannot accept it any longer.

This bill allows us to decide what kind of financial system we want going forward. Do we want to leave here saying we want a financial system in which the big shots on Wall Street decide they want to trade $25 trillion worth of credit default swaps, 90 percent of them in the five biggest banks?

If that is what they want to do and it is betting rather than investing, God bless them; let them do it. Who are we to tell them? Who are we to tell them? We lost about $15 trillion, that is who we are.

My question is: Are we going to see if we can sober up this system to say this is not the kind of financial system with which we grew up? Only in the last decade and a half did we decide to securitize everything and create these new exotic instruments--CDOs, naked credit default swaps and the like. That has happened recently. It was not because my colleagues from Connecticut and Alabama came to the floor of the Senate and said: Let's decide to create a whole series of new financial instruments in this country that are hard to pronounce and understand. They can all make a lot of money in fees, pay big bonuses, and it will work out just fine. That is not how it happened. It happened because we had a bunch of brain-dead regulators, among other things, who said: Go play. And they all went to play and made a lot of money, and this economy nearly pancaked.

So this amendment, I would say to the Senator from Connecticut, is very simple. It would ban the use of naked credit default swaps in which no one has any insurable interest.

By the way, with respect to unintended consequences, under this modified amendment I have offered, the appropriate Federal regulators, including the chair of the Financial Stability Oversight Board, may phase in the effective date for up to 18 months if they determine the phase-in of the prohibitions and limitations in the amendment is necessary to avoid undue market disruptions.

Having said that, I respect the view of my colleague. I profoundly disagree with it. I hope very much that my colleagues will decide not to table this amendment and to stand on the side of people who say: Let's really make a change here. We understand what happened. It was awful for this country. Let's make sure it doesn't happen again. The only way we will do that is to effect the kind of change that exists in this amendment.

Madam President, I wanted to note during this discussion some commentary this week about something that is quite extraordinary. We saw news reports this week about a perfect game that was pitched in the Major Leagues recently by a pitcher from the Oakland Athletics named Braden. In all of the history of baseball, it was the 19th perfect game ever pitched. But it is not the only perfect thing that has happened recently.

We have news reports now that the four biggest banks in America have scored a perfect 61-day run, never having lost money in 61 days. That is like a perfect game, batting 1,000. It is all of those things.

How is it that the four largest banks in the country could, for the first quarter of the year, make money every single day? Is the system rigged? A columnist named Jonathan Well pointed out that if you managed a highly leveraged, diversified investment fund and have become so skilled at it that you had a 70-percent probability of winning on any given trading day, the prospect of your winning 63 times in a row would be about 1.75 billion. Even if you had a 95-percent chance of winning every day because you were so skilled at picking all of the right investments, you would have about a 3.9-percent chance of doing it on 63 straight trading days. And yet four of the largest banks in America, Goldman Sachs, JPMorgan Chase, Bank of America and Citi, scored a perfect game.

How did that happen? Does it happen because the Federal Reserve Board loans them money at near-zero interest rate, and then they invest in 10-year Treasuries at 3.8 percent? That is how you make profits every single day. Is that a rigged game? Can everyone do

that? If everyone can do that, I have got a sure-fire way here for everybody to make money. You get to borrow from the Federal Reserve Board for near nothing, and then you can invest it in 3.8-percent 10- year Treasury notes.

It is interesting this relates to something else we have been trying to do for a while. We have been trying to get information about how much money the Federal Reserve Board is lending those investment banks and the biggest banks in America. How much money is the Federal Reserve Board giving them and at what rate? We know it is at a near-zero rate, but we do not know how much and to whom.

The Federal Reserve Board has now been told by two Federal courts, you have a responsibility to tell the American people and the Congress who got your money and what the terms were and how much. The Federal Reserve Board has said, we do not intend to tell everybody. They have now appealed it to a third Federal court.

I have led the effort in letters to the Fed Chairman saying, you have a responsibility here. But now this latest evidence tells us how this game is played. Isn't it interesting, and isn't it pathetic, that at a time when so many people wake up in the morning jobless, so many people are still losing money on their homes, on their assets, losing hope and losing confidence in the future of this economy, that at the very top of the heap, some of the same firms that caused the problem that threw this country into the deepest recession since the Great Depression now announce they are pitching a perfect game every single day. They are batting 1,000 and pitching perfect games. Why? It appears to me that it is not about lending money to help restore America and help firms that want to expand by providing capital. It appears to me that their reports suggest they are once again back doing the same things they used to do, except this time they understand that they cannot fail.

They borrow money from the Fed at near-zero interest rates, and invest it in Fed 10-year notes at 3.8 percent. That is about as close to guaranteed income as you can get. But it is not guaranteed income for all of the American people, it is just for the folks at the very top of the chain, the biggest financial firms.

Again, let my say as I do every time I come to the floor, I don't have a grief against the biggest financial firms. We need big financial firms. But we do not need them too big to fail. And we certainly do not need to be feeding them with a strategy that says, I tell you what; we will give you a deal no other American has. You get to go to a window at the Fed, get money for almost nothing, and then invest it back in Fed bonds and pay 3.8 percent. We will give you a guaranteed annual income.

I just wanted to make note. It is too often little known, and it is seldom raising much concern among anybody these days, that all of this is happening. I think it is scandalous. It seems to me worth mentioning the only perfect game that is going on around here was not by a pitcher named Braden, but it is by some of the biggest financial institutions in the country that are not only fully recovered but have guaranteed income opportunities every single day, every single day, while a lot of the American people are trying to figure out, how am I going to pay the rent? How am I going to find another job?

I had come to the floor because I want to indulge--I should not say indulge. I wonder if the Senator from Connecticut will indulge me for a moment. I have spoken to the Senator, and I recognize that doing what he is doing is perhaps a cross between a migraine headache and a root canal. This is tough business out here hour after hour after hour and day after day.

I respect that. I was on the floor with a piece of legislation last year that took forever and it did try my patience. So kudos to my colleague from Connecticut. I respect the difficult job he has.

I have had an amendment, along with Senator Kaufman, Senators Levin, Cantwell, Feingold, Sanders, and so on, a Dorgan amendment No. 4008. I would ask the courtesy of being able to set aside the pending amendment and call up this amendment. I do not intend to proceed with it, I just want to get it pending. I would proceed with debate at any time that is convenient. I do not want to inconvenience the Senator and the schedules he has. But I wish to ask if he would give me the opportunity to at least call it up, get it pending, and then we will proceed at a pace and at a time that would be convenient to the manager of the bill.

Madam President, let me say, my purpose here is not to add

to the burdens of the Senator from Connecticut, who is trying to get a bill through the Congress and signed by the President. I understand that.

I think I tried to in my opening comments be pretty complimentary of the work and understanding of the work. I agree there are times when there is a straw that breaks the camel's back. I also think this camel can carry a bit more. What I wish is, I think the Senator from Connecticut would agree that I have been to this floor a fair number of times, spoken with some passion and some vigor on things that I care a lot about. It is not as though I came out of a closet someplace here in the cloakroom and started talking about the issue that I intend to offer an amendment.

What I wish to do, with the consent of the Senator from Connecticut, is ask unanimous consent that the pending amendment be set aside and to call up amendment No. 4008.

Let me say that unfortunately when I, last evening, saw the note on the desk in front of us that said ``no further rollcall votes'' I had another event, and so I left the Chamber, because there were no further votes, and I went to the other event.

I discovered later that even as I was leaving the Chamber, I understood that there were three amendments at that point made in order. There were, I believe, two Republican amendments and one Democratic amendment that were noticed, and I think the chairman indicated they would be the next amendments. That is the basis on which I left this Chamber.

When I came back this morning, I understand that a fair number of other amendments had been called up, the pending amendment had been set aside, and other amendments had been called up. I do not know how many. I think four or six amendments, perhaps, beyond the three. I was unaware that opportunities such as that would have existed last evening. I think as one Member of the Senate who has spent a considerable amount of time on this floor on this issue, had I been aware last evening that the gate was open a bit to be able to get an amendment pending that I have talked about many times on this floor, I would have been here last evening.

I was not aware of that, and that is the basis on which I came this morning at 11 o'clock. I hope the Senator from Connecticut would not object. I would hope he would rethink that. He has every right as chairman to decide to manage this bill as he wishes. We cannot have 100 managers for this bill. The chairman has done a lot of work to bring the bill to the floor.

On the other hand, this issue is not some ordinary issue. The country will live with the consequences of this bill perhaps for a decade, perhaps more, perhaps less than a decade if we do not do the right things and we suffer another economic near collapse. We will have another bill on the floor for those who are here in 2 years or 5 years.

What I want is financial reform to be done, done well, done right. I was going to say to the Senator from Connecticut, the amendment I have offered is an amendment that I think is very important.

I don't have any idea whether we have the votes for it. But I do think it is one of those pieces that is essential--critical, in fact-- in order to address financial difficulties going forward. If we don't pierce this unbelievable building bubble of speculation that has caused a significant part of our problem, then we will not have addressed the real issues of financial reform. The issue of what are called naked credit default swaps, those are newly created instruments by which people make wagers with one another with no insurable interest on any side of the security. If we don't put a dagger in the heart of that kind of activity--and that is not shutting down, as my colleague from Georgia said yesterday, the use of credit default swaps. It is shutting down one portion of them, the largest portion that is just a flatout gambling device.

I hope we can address these issues. I think I have been respectful to the chairman of the committee. I say to the chairman if I am allowed to set this amendment aside and offer amendment No. 4008, I will certainly be willing to have a reasonably short time period for debate. That kind of cooperation is also important in the construct of trying to get this bill done. It is an amendment that should have a lengthier debate.

When I left the floor yesterday, the Senator from Georgia had an amendment. I think it was 2\1/2\ hours later that we had a vote. This amendment is much more consequential than that. I am willing, if we can at least get it pending, when the Senator from Connecticut believes it is appropriate to debate it, to engage in an agreement on a short timeframe.

I am not unsympathetic to what the Senator is doing. It is the case that I, certainly as one Senator, see amendments being offered again and again by Senators from the Banking Committee, and they had a pretty good shot at this for a good long while before it came to the floor. Those of us who don't serve on that committee just want an opportunity to get amendments pending and up and so on.

I am speaking about amendments that have been offered. If the Senator objects, he has the right, but I will be back. If I am in the next tranche the Senator from Connecticut announces, that is fine. I will be able to offer an amendment. But between now and then, I guess I would like to understand how the system is going to work because I will continue to come and ask consent to offer this amendment. Then when we do debate it, I will have a real debate. This is the heart and soul of trying to shut down a system that creates unbelievable speculation in the economy and poses great danger.

I might point out, we should not always assume that we are in safe territory on all of these issues. Colleagues probably saw the news this morning. Last month's Federal budget deficit is $83 billion. Take a look at what the trade deficit is. As I mentioned, in the midst of all this, the biggest financial institutions in the country are batting a thousand. Every single day they make a profit with what I think looks like a rigged system.

This bill is very important. I want the Senator from Connecticut to succeed. If we don't pass a financial reform bill, the American people have a right to look at the Congress and say: What on Earth are you there for? What are you doing? But not just any bill, a bill that actually addresses the heart of the issues that caused the near economic collapse of this country. That is what we need to have accomplished at the end of this process. That is what brings me to the Senate floor. I am sorry I can't get this pending at the moment. But as Governor Schwarzenegger said in a previous life: I will be back, and soon.

Mr. President, I know this is beginning to be a lengthy debate

and process on the floor of the Senate to get through amendments. My colleague from Connecticut exhibits great patience to try to work through this. I know there are a lot of interests that have different views about this, and they come to the floor and they want this amendment or that. I understand all that. I know my colleague from Connecticut views this with the same seriousness of purpose as I do and understands that many of us not on the Banking Committee have not had the opportunity to be involved in the debate until now--until it comes to the floor of the Senate--and have not been able to offer amendments.

I think that represents the appetite in the Senate to be engaged and to understand what has caused the most devastating financial event for our country since the Great Depression--something that collapsed some $15 trillion in value for the American people, caused very substantial unemployment, dramatic losses in income, the loss of homes and has led to hopelessness and helplessness for many Americans.

What happened to cause that? Was this some sort of natural disaster? No, it wasn't a fire, a flood, a tornado, or an earthquake. It wasn't a natural disaster. This was made with human hands. This is a manmade disaster and, by the way, it could well have been predicted, in my judgment, and some of us did. Without pointing at myself necessarily, I said 11 years ago that I thought we were setting ourselves up for massive taxpayer bailouts. I will not show the charts again, but it is not surprising. We were going to modernize the financial system a decade ago in order to compete with the Europeans and to bring it into the modern age. Modernizing meant deciding let's deregulate everything. Let's not look at everything that is going on. The result is, a decade later, a very substantial collapse in our economic system.

Mr. President, I have been thinking about the work that has gone on in the last couple of weeks on the floor of the Senate. I came in early this morning to get something from the radio addresses of Franklin Delano Roosevelt in 1933 and 1934. The situation in this country, while different by many decades, is similar with respect to what caused a substantial problem in this country. Then it was the Great Depression.

Let me read, if I might, just a couple of excerpts of what then- President Franklin Delano Roosevelt said about our country and about what was needed to be done because it has, I think, significant application to today. Here is a quote from Franklin Delano Roosevelt on March 12 of 1933:

We had a bad banking situation. Some of our bankers had

shown themselves either incompetent or dishonest in their

handling of the people's funds. They had abused the money

entrusted to them in speculation and unwise loans. This was

of course not true in the vast majority of our banks but it

was true in enough of them to shock the people for a time

into a sense of insecurity and put them into a frame of mind

where they did not differentiate, but seemed to assume that

the acts of a comparative few had tainted them all. It was

the government's job to straighten out this situation and do

it as quickly as possible. And the job is being performed.

This was, again, from President Franklin Roosevelt in 1933. Quoting again, he says:

After all, there is an element in the readjustment of our

financial system more important than currency, more important

than gold, and that is the confidence of the people.

Confidence and courage are the essentials of success in

carrying out our plan. You people must have faith; you must

not be stampeded by rumors or guesses. Let us unite in

banishing fear. We have provided the machinery to restore our

financial system; it is up to you to support and make it

work.

He was talking about a time in the shadow of the Great Depression. On September 30, 1 year later, in his address to the Nation, Franklin Delano Roosevelt said:

The second step we have taken in the restoration of normal

business enterprise has been to clean up thoroughly

unwholesome conditions in the field of investment. In this we

have had the assistance from many bankers and businessmen,

most of whom recognize the past evils in the banking system,

in the sale of securities, in the deliberate encouragement of

stock gambling, in the sale of unsound mortgages and in many

other ways in which the public lost billions of dollars. They

saw that without changes in the policies and methods of

investment there could be no recovery of public confidence in

the security of savings.

Interesting. You could read that today, and it describes the task we have before us today. But this wasn't language of today. This was from 1933 and 1934. The thoroughly unwholesome conditions in the field of investment, in the sale of securities, in the deliberate encouragement of stock gambling, the sale of unsound mortgages. That is the year 2005, 2009. Yet Franklin Delano Roosevelt described it in 1934, and he put together a plan. That plan included Glass-Steagall and other things to protect this country; to say never again will we allow that to happen.

Then, a little over a decade ago, in this Chamber and in the White House, they said: We have to modernize our system. We have to get rid of all those protections from the Great Depression. They are old- fashioned. Let's dump them. So the Congress dumped them. I didn't support that. I vigorously opposed that. But they dumped them.

So the country had a very serious problem--the runup of a substantial amount of new exotic securities, things that people didn't understand very well--CDOs, securitization of almost anything somebody could securitize, getting fees from the sale of the transfer of securities, and then the development of something new called the credit default swap.

The credit default swap was a new approach. It was an insurance policy against a bond default. But then there was a synthetic CDO or a synthetic credit default swap, or what some called naked default swaps. That meant that you could buy one of these instruments back and forth without ever having an insurable interest in the instrument itself, just making a wager with someone else about what might or might not happen in the future.

During all of this time we watched a very substantial amount of activity, on Wall Street particularly, take place that I think has been pretty unwholesome for our country. This is an article of September 30, 2008, which talks about the money from Wall Street that is beyond the legal reach. It says there is $1.9 trillion of money that is run out of the New York metropolitan area that sits in the Cayman Islands--a secrecy jurisdiction. Another $1.5 trillion is lodged in four other secrecy jurisdictions.

Let me quote from this article by Robert Morgenthau in the Wall Street Journal on September 30, 2008.

Following the Great Depression, we bragged about a newly

installed safety net that was supposed to save us from such a

hard economic fall in the future. However, the Securities and

Exchange Commission, the Federal Reserve System, the

Comptroller of the Currency and others have ignored trillions

of dollars that have migrated to offshore jurisdictions that

are secretive in nature and outside the safety net--beyond

the reach of U.S. regulators.

Well, it is not surprising that at the same time that money was being hidden in other parts of the world by some of the same Wall Street interests that a massive amount of money was being paid one to another on Wall Street and in the investment banking area.

Just to cite a couple of these examples, I have a description from about a year and a half ago when Lehman Brothers went bankrupt. The Lehman Brothers bankruptcy followed Lehman Brothers Holdings agreeing to pay a total of more than $23 million to three executives leaving the securities firm just days before it collapsed.

The reason I point this out is there was so much money around for everybody--for everything--days before the collapse of Lehman Brothers. There was $23 million paid to three executives leaving the securities firm days before it collapsed. You wonder why. Does that make any sense? Does anybody think that is something that is worthy?

Here is a payment of $19 million to a man named Alan Fishman. He was the CEO of Washington Mutual, which was run right into the ditch and went belly up and had to be acquired by another company. Alan Fishman worked 3 weeks for Washington Mutual, and he got a severance deal of $19.1 million--$19.1 million.

In the heyday of executive compensation a couple of years ago on Wall Street, in 2007, the head of Merrill Lynch made $161 million. That was Stanley O'Neal. John Thain at Merrill Lynch made $83 million; Lloyd Blankfein of Goldman made $54 million; John Mack of Morgan Stanley made $41 million; James Dimon of

JPMorgan Chase made $29 million; and--well, the list goes on. Kenneth Lewis of Bank of America only made $20 million. He must be looking up at Stanley O'Neal's $161 million and asking: Where did I miss the boat?

But this kind of money was hanging around all of these issues and these firms, and it was, Katey, bar the door. We are making massive amounts of money and we are going to pay almost never before heard of sums to individuals for running these big companies--$150 million, $50 million, $83 million. So it is not surprising, then, that the American people have a pretty dim view of what was going on on Wall Street when we announce that what went on on Wall Street led to this dramatic economic devastation to our country.

By the way, the devastation doesn't apply to everybody. I just saw this morning that the unemployment rate among the higher income Americans is 3 percent. So they are not feeling the pinch so much. But in the bottom 20 percent of the American people, the unemployment rate is around 18 percent. So there are a whole lot of folks at the bottom of the economic ladder who are paying the price for this unbelievable behavior.

So the question is, What do we do about all this? What do we do to make sure that when we are done in the Congress on something called financial reform, the American people have some notion that we will have done the right things to prevent from happening again that which happened to us in the last couple of years?

The presentations I have made on the Senate floor have perhaps led people to think that I believe investment banks have no merit or no worth. That is simply not the case. I understand that our country and the ability to produce in our country through a productive sector needs financing and that financing would include a range of financing opportunities. You do need investment banks, you need commercial banks, you need venture capital firms, you need securities. I understand all of that.

But I also understand--it was a comedian, Mark Russell, who once described investment banks by saying: ``Investment banking is to productive enterprise like mud wrestling is to the performing arts.'' If ever that applied, it surely must apply now when we look back to see what has happened in the last decade in investment banking. If we do not fix it in this legislation, put a cork in it, and we leave this Chamber and this Congress and claim to have fixed it and have not done it, then shame on us.

We have a responsibility. Let me tell you what I think the responsibility is. It relates to a range of things that are not yet done. It relates to dealing with the issue of too big to fail. I know we had one vote, and we failed, unfortunately. There are other ways to do this. But if we have institutions that are too big to fail, that are so large that they cause moral hazard to this country should they fail, so large that they cause completely unacceptable risks of bringing the country's economy down should they fail--if we do not do something about that, we cannot claim ever that we have done something about this system. It is not about saying big is bad. It is about saying no-fault capitalism doesn't work if you allow financial institutions to become so large that their failure can bring down this country's economy. That is what the issue is, and that needs to be fixed.

It appears to me we are probably not on the way to fixing that, but hope still arises. For me, it is not a triumph of hope over expectation; it is a triumph of hope, believing it is still possible for us to do the things necessary to fix what we need to do.

I also think the set of issues, in addition to too big to fail, includes an amendment I will be offering banning naked credit default swaps, saying that if there are credit default swaps issued that have no insurable interest in bonds, then it seems to me that is just wagering and that can be done at our gambling centers in our country but ought not be done in the lobbies of banks. That is an amendment which is very important. If we don't fix this, we will leave this town saying we did financial reform but we did nothing about too big to fail and we did nothing about the binge of speculative activity in instruments that have no insurable interest in bonds, credit default swaps that have no insurable interest in bonds.

Mr. Pearlstein, who writes a column for the Washington Post, asked a question which led me to be interested in the question, Why should there be more insurance policies against bonds than there are bonds?

In any event, why should we, in our financial institutions, have people wagering about whether a bond will default when, in fact, they have no interest in the bond? We do not allow people to buy life insurance on someone else's life because they don't have an insurable interest. We don't allow someone to buy fire insurance on someone else's house because there is not an insurable interest. Yet we have trillions of dollars out there, called credit default swaps, making a wager on someone else's bond, whether someone else's bond will fail, despite the fact that they have no insurable interest in the bond. If we do not put a dagger in the heart of that kind of intense speculation that has caused a significant amount of these problems, then we will have, in my judgment, failed to have addressed the real causes and failed to have done what we should do to make sure this cannot happen again.

I believe my colleague from the State of Washington is going to offer a restoration of sorts of the old Glass-Steagall law, which I think makes sense. Others will offer legislation that would say to insured banks: You ought not be trading securities and derivatives on your own proprietary accounts. It makes a lot of sense to me. All of those are important.

I mentioned before that I wrote the cover story for the Washington Monthly magazine 15 years ago titled ``Very Risky Business.'' At that time, there was $16 trillion of notional value of derivatives, and I wrote the article saying it was very risky business because even then banks were beginning to trade derivatives on their own proprietary accounts. That is not what insured banking should be. That is far too risky and puts the taxpayer at risk.

Now we see that unemployment is at 9.9 percent. We are still trying to recover from this devastating recession. We are making some progress.

Wall Street is back on track for record profits. This is 5 months ago, now, from the New York Times. In a report released Tuesday, the comptroller of New York State said Wall Street profits in 2009 are on track to exceed the record set 3 years ago at the height of the credit bubble. He also talked about bonuses at six banks that he thought would exceed the $162 billion paid in 2007. By the way, fueling these record profits by these institutions is from the firm's own securities trading accounts, according to this story, as they borrow at near zero interest rates and put the money to work in the securities markets. It sounds as if nothing has changed. That is what helped cause this mess. Yet here we are, back again, and the question is, Who is healing? The big investment banks are healing.

Let me for a moment remind everyone how important regulation is. This bill has a lot of regulatory allowance--some instruction but a lot of it allowance that says to regulators: Here is your responsibility.

One of the key issues that has exacerbated this substantial economic collapse was something that happened in 2004, on April 28, in the basement of the Securities and Exchange Commission. On the afternoon of April 28, 2004, there were five members of the Securities and Exchange Commission who met in a basement hearing room to consider a request by the five biggest investment banks. They wanted an exemption for their brokerage units from the old regulation that limited the amount of debt they could take on. What they said is: We want to be able to unshackle billions of dollars now that we hold in reserve as cushions against losses on investments. If we could unshackle that money we have to hold in reserve against losses, we could use that to flow up to the parent company and we could enable it to invest in a fast-growing world of mortgage-backed securities and credit derivatives and so on.

The five investment banks that led the charge--one of them was Goldman Sachs, headed then by Henry Paulson, who 2 years later was Secretary of the Treasury and inherited the mess that

was in part created by it. They had 55 minutes of discussion that afternoon, and after 55 minutes of discussion, the Securities and Exchange Commission voted unanimously to allow these biggest banks in America to take on leverage, going from about 12 to 1 or so, to 33 to 1. In other words, for every dollar in equity, it could leverage about $33 in debt. By that notice in a basement hearing, with no press there at all--I think one reporter was there; it was barely reported--they set the stage for loading up dramatic amounts of debt in these institutions.

Now these institutions are, of course, very opposed to the amendment I am going to be offering here at some point, I hope, I expect, or I insist--one of the three--that would ban naked credit default swaps trading. They are very opposed to that. I understand why. They are making a lot of fees and profits as a result of this massive bubble of speculation in these kinds of securities. But I don't think we have any choice but to be taking on the center of the cause of this economic collapse in our country.

The amount of effort that has been made to water down some of the amendments that have been offered is troublesome to me. I think the legislation that came out of the Banking Committee is meritorious. It has value. I appreciate the work the committee did. But, as I said when I started, most Members of the Senate have not had a chance to weigh in on this, and there are some substantial improvements that can be made-- I hope should and will be made to the Banking Committee product. But the improvements will not be improvements that strengthen our ability to prevent what happened from ever happening again if the so- called improvements are diminishing the strength of this bill.

We need regulatory oversight. If we have learned one thing in the last decade, it is that you have to have regulators on the beat who take regulation seriously. You also have to decide to put a stop to the things that don't represent the kinds of business practices that give any strength to this country at all and, in fact, represent business practices that undermine this country's economy. That is why I believe it is critically important we continue to address the issues as I have just described--too big to fail and credit default swaps and related issues.

I am going to read, just for a moment, something from the November 5, 1999, New York Times article when Congress passed a new piece of legislation called financial modernization. This was written by Stephen Labaton. This is a quote, after the passage of the bill. I voted against it. I believed strongly then that it was a dangerous mistake for our country. It turns out it was even more dangerous than I thought.

The architects and others said:

Today, Congress voted to update the rules that have

governed the financial services industry since the Great

Depression and replaced them with a system for the 21st

century. This historic legislation will better enable

American companies to compete in the new economy.

Another quote--in fact, that was from the White House, by the way. That was from someone at Treasury.

This is from a Senator:

The world changes and we have to change with it.

We have a new century coming and we have a new opportunity

to dominate this century the way we dominated that century.

Glass-Steagall in the midst of the depression came at a time

when the thinking was that government was the answer. In this

era of prosperity, we decided that freedom is the answer.

Another Senator said:

If we don't pass this bill, we could find London or

Frankfurt or, years down the road, Shanghai becoming the

financial capital of the world. There are many reasons for

this bill but first and foremost is to ensure that U.S.

financial firms remain competitive.

The passage of that bill set this country up for the biggest fall since the Great Depression.

The question on the floor of the Senate is this: Are we going to pass a piece of legislation that has real strength in deciding that which caused this deepest recession since the Great Depression cannot be allowed to happen again? Are we going to pass a piece of legislation that has real regulation and real rules that work? Are we going to pass a piece of legislation that says too big to fail is too big, period? Are we going to pass a piece of legislation that pierces the balloon of speculation in instruments such as naked credit default swaps-- something that was not even in our language 20 years ago. Are we going to address the questions of the securitization of everything, in many cases just for the sake of being able to capture fees? Are we going to address the question effectively of rating agencies that gave AAA ratings to bonds that were worthless? Are we going to address all these questions or are we just going to pass a bill to say: We did it, good for us, this is success, only to find out 5 years later or 10 years later that we are right back in the same swamp?

I wish to simply say today that the American taxpayer has now been obligated--in addition to the joblessness and homelessness and other things visited on the American people and the loss of about $14 trillion or $15 trillion in value, the American taxpayer has been obligated to the tune of somewhere around $11 or $12 trillion lent, spent, or borrowed to interests that we do not now know because the Federal Reserve Board says: It is none of your business to whom we gave trillions of dollars.

Given that, given the economic catastrophe that has visited a lot of the American people, I think we owe them a piece of legislation here with amendments that improve it, a piece of legislation that allows all of us at the end of this day to say no, we didn't water it down, we strengthened it. We recognize the value of our financial institutions, but we don't recognize the value of financial institutions that run this country into the ground, pay $83 million in salaries, $20 million in bonuses, buy things they will never get from people who never had them and claim fees on both ends, and claim they have done something good for the country.

This country can do better than that. This is one of those times--I know this is not seen perhaps by some with the same passion as some of the other issues that get peoples' blood boiling, but I tell you, what we do here will long be remembered because it will have consequences, whether this country has a growing, strong economy for many years ahead, and whether we avoid economic collapse or a deep recession.

I watch every morning and read the stories about Greece and other countries that are in great difficulty. Our country is in some significant economic difficulty. We have sent people off to fight wars for 8, 9 years, not paid for one single penny of it. Unbelievable to me. Every single bit was borrowed and put on the debt.

Then we have got people who thumb their suspenders and talk about how awful the debt is. We have a trade deficit that is relentless and means we end up owing other countries, which will be paid with a lower standard of living in our country. In addition to those issues, we have got this issue of the near collapse of our economy by unbelievable speculation coming from the banking industry.

We have got to fix all of these things if we want a country that gives our children the same opportunities we had. We cannot fix it by glossing over things with a coat of light paint. This has to be fixed with real policies that tackle the central issues on what caused this collapse.

I am here and I am ready to offer my amendment. In fact, the sooner the better. I have been anxious to do that. I will stick around. As soon as I am told my amendment will be in order, I am going to offer it. I guess we will be here until we finish this debate and complain until I get to offer the amendment.

With that, I yield the floor. I will be hanging around.

Reserving the right to object, and I will not object, I understand the unanimous consent request is to set aside the pending amendment. Is that correct?

I will not object. Let me respond for a moment, if I might, to the Senator from Connecticut.

I have indicated I wish to offer an amendment at some point. I want to know if I am on the list.

Mr. President, the word ``promise'' actually made the day for me. So I will not object, and look forward to offering that amendment at the earliest opportunity.

Will the Senator yield for a clarification?

Mr. President, let me clarify that my position is to ban what are called naked or synthetic credit default swaps, not ban credit default swaps. Those with no insurable interest of any kind are considered naked credit default swaps. It appears to me that 70 to 80 percent of all credit default swaps are in that category; they have no insurable interest. So I did not want the Senator to think I want to ban credit default swaps. That is not the case. Naked credit default swaps, yes.

Mr. President, I would like to announce that the Committee on Indian Affairs will meet on Thursday, May 13, 2010, at 9:30 a.m. in room 628 of the Dirksen Senate Office Building to conduct an oversight hearing entitled ``Does Indian School Safety Get a Passing Grade?''

Those wishing additional information may contact the Indian Affairs Committee at (202) 224-2251.

Madam President, I move to reconsider the vote, and I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Madam President, I will join my colleague from Connecticut in opposing the amendment on the floor if it weakens the underlying bill, but I do not come to speak about that proposal at the moment. I wanted to speak about an amendment I have discussed previously on the issue of too big to fail.

There is much yet to do on this subject of too big to fail. I recall, in a room just steps from here, on a Friday, I believe it was, the Treasury Secretary leaning over the lectern in a very stern way saying to the caucus that I was involved in, if within 3 days a three-page bill granting $700 billion to the Secretary of the Treasury, with which to provide funds to stabilize some of the biggest financial institutions in the country, if that did not come about, our economy could very well collapse completely.

I remember that moment and remember thinking that it was pretty bizarre that our country got to that point: that all of a sudden 1 day, after being told month after month that the economy was strong, the economy was in good shape, that there were some ripples and hiccups here and there, but things were on course and we had confidence in the strength of the economy, that we were now being told the economy may well collapse in days unless the Congress comes up with $700 billion.

Why was that the case? Because institutions that were so large in this country, at the top of the financial industry, were so important to the economy that their failure could very well result in failure of the entire American economy. That is what is called too big to fail.

Let me show a chart that shows the six largest financial institutions in the country and what has happened to them since 1995. This is their growth as a percentage of GDP. It shows that they are getting larger and larger and larger and much larger. Even during this period of near collapse, the same institutions that were judged too large to fail and judged to represent a grave risk to the entire economy have gotten larger than just too big to fail.

We had a vote yesterday, but that cannot be the end of this discussion about how to address too big to fail. The vote yesterday was rather Byzantine, as far as I was concerned. I was not someone who was a big fan of the $50 billion to be pre-funded for resolution of too- big-to-fail companies. But having said that, to decide that the $50 billion, which would come from the very institutions that are too big to fail, should be abolished, and that the funds instead would come from the FDIC, which are initially funds from the American taxpayer, made no sense to me. Then suggesting that it will be all right because the FDIC will be repaid with the sale of assets--oh, really? Well, firms that are too big to fail that are going to get in trouble in the future are not going to have very many assets. They are going to be in trouble because of dramatic amounts of overleverage, leverage that goes far beyond their ability to continue to do business. And when the firm comes tumbling down, I fail to see where assets are going to exist in substantial quantity to repay the taxpayer.

But that was yesterday. I did not support that. That was yesterday. This issue of creating a circumstance of early warning on too-big-to- fail firms is not satisfactory to me. The only way to resolve too big to fail is to abolish too big to fail. I mean abolish too big to fail. That means having firms that are not too big to fail, that will not cause a moral hazard or a grave risk to the entire economy should they fail.

Do you believe that is the case with this graph? Is there anything here that--as this graph shows, we have firms that are too big, far too big to fail. Is there anything here that is going to solve that in this bill? The answer is no. The only direct and effective way to address this is to decide, if you are, in fact, too big to fail, then there has to be some sort of divestiture or dissolution to bring that firm back down to a point where in size and scope such firm is not too big to fail and is not causing the kind of dramatic special risk to the country's economy that it would bring the economy down with it.

That is the only direct and effective solution. Is that radical? Well, I have an amendment that requires that if you are determined to be too big to fail, then we begin a process, over 2 years, of breaking away those parts that make you too big to fail. Is it a radical idea? I do not think so.

One-fourth of the Board of Governors of the Federal Reserve Board says we ought to do that. Richard Fisher, president of the Dallas Fed: Too big to fail is not a policy, it is a problem. Too big to fail means too big period. We ought to break them up.

Federal Reserve Bank of St. Louis, James Bullard, president and chief executive officer: I do kind of agree that too big to fail is too big to exist.

The economist, Joe Stiglitz, Nobel Prize winner: Too-big-to-fail banks have perverse incentives. If they gamble and win, they walk off with the proceeds. If they fail, taxpayers, pick up the tab.

Alan Greenspan--I seldom, if ever, agree with Alan Greenspan, but I have used a quote of his to describe where we are now. He was around sitting on his hands for a good many years while these problems developed, despite the fact that he had the authority to have avoided them. Then he has written a book acting as if he was exploring the surface of Mars while all of this went on.

But now he says: The notion that risks can be identified in a sufficiently timely manner to enable the liquidation of a large failing bank with minimum loss has proved untenable during this crisis, and I suspect in the future crises as well.

Simon Johnson, professor of entrepreneurship, the Sloan School: There is simply no evidence, and I mean no evidence, that society gains from banks

having a balance sheet larger than $100 billion.

I do not know whether I agree or disagree with that. But his point is that too big to fail means too big.

Arnold King, Cato--I seldom quote Cato on the floor of the Senate. But, you know, strange bed fellows: Big banks are bad for free markets. There is a free market case for breaking up large financial institutions--that our big banks are a product not of economics but of politics.

The president of the Federal Reserve Bank of Kansas City, this is the third Fed president: I think they should be broken up. And in doing so, I think you will make the financial system itself more stable, more competitive, and I think you will have long-run benefits over our current system.

We broke up Standard Oil in this country into 23 different pieces. It turned out the 23 pieces were more valuable than Standard Oil was. I am not saying just go in and break up things just for the purpose of breaking up. I am saying this: If there is a standard by which we judge that an institution is too big to fail and causes a dramatic risk to the economy as a whole should it fail, a moral hazard, unacceptable risk to the entire economy, then it seems to me like this issue of creating early warnings and stop signs and sirens and so on is largely irrelevant.

What we need to do is do something direct and effective and something we all knew we should do; that is to say, if you are too big to fail, and judged to be so, and judged to pose those kinds of risks to our economy, then you must break off pieces. We would, over a 2-year period, require that to happen until you are not too big to fail.

Let me show a couple of quick charts. This one shows the top financial institutions: The Big Get Bigger. This chart shows the same thing, measuring assets and liabilities: The Big Get Bigger. Much, much bigger. The first chart I showed today demonstrates why, if we do not pass the amendment I suggest, we can thumb our suspenders and crow all we want in every hallway in this Capitol Building, but we will have not done what was necessary to be done to address too big to fail. We just will not do it.

So I have an amendment. I am here because I am pestering those who are lining up amendments to make certain I have a chance to debate and vote on that amendment, and that will be the test of whether this Congress has learned a lesson; whether, when someday a Treasury Secretary leans over a lectern and says: If I do not get $700 billion to bail out the big interests that ran this country into the ditch, our whole economy is going into the ditch.

So I hope very much that we will have the opportunity to both simply and effectively do what is necessary to finally and thoughtfully address this issue of too big to fail.

I yield the floor.

Mr. President, I have come to speak in support of the Sanders amendment. I am intrigued by my colleague's presentation, so I will respond to a bit of it. There are a couple of areas where we agree and some where I profoundly disagree, but let me start with the agreement.

When my colleague says, If you are too big to fail, you are too big and you ought to get smaller, I fully agree with that. I have an amendment that says if you are too big to fail--judged by the council in this bill that you are too big to fail, at that point you require the breaking up or the paring back of whatever is necessary of that institution to bring it below the level at which its failure would cause a moral jeopardy or an unacceptable risk to this country's entire economy. If we end this process and too big to fail still exists--that is, we have companies that are, in fact, too big to fail--then we will have failed, in my judgment.

Too big to fail means you are too big. We have broken up Standard Oil into 23 pieces and it turns out that 23 pieces are more valuable than the whole. AT&T was broken up. I am not interested in breaking up companies for the sake of it, but I am saying this: We know what has happened.

This chart shows what has happened to the largest financial institutions in this country. It shows that with respect to assets and liabilities, the top six commercial financial institutions in this country have gotten bigger, bigger, bigger, and much, much, much bigger. Does that cause jeopardy to this country? Well, if you have been awake the last few years to watch $700 billion be pledged to avoid a calamitous event to this economy, then you understand that this is too big and something has to be done about it. Create early warnings? No, I don't think so. Stop signs? How about deciding that if you are too big, you are too big, and you have to pare back those portions of your institution that make you too big to fail and a moral hazard to this country that is an unacceptable risk to the future of this economy.

Here is another chart that shows about the same thing. It shows the growth of these institutions going back to 1995. It is relentless, aggressive growth. If we end this without having addressed it, we will not have been able--we won't be able to tell the American people: We took care of too big to fail. So I agree with the Senator from Oklahoma on that point.

Where we disagree is the notion that the problem here is us. Well, I will tell my colleagues what. The ``us'' bears plenty of responsibility, but let me talk about the ``us.'' It wasn't the ``us'' who decided in Countrywide Mortgage, which was the largest single mortgage company in this country, to write liars' loans, to decide to say to people, Hey, you want to get some money from us? We are a big company. We are making a lot of fees. We are paying a lot of money to our executives and we want you to come to us. In fact, I have an ad they ran, Countrywide, the biggest mortgage company in the country. Here is the ad: Do you have less than perfect credit? Do you have late mortgage payments? Have you been denied by other lenders? Call us. We have money for you. Are you a bad risk? Are you a bad person? You can't pay your bills? Come to us.

It wasn't the Congress that did that, I would say to my friend. This was Countrywide Mortgage. By the way, the guy who ran this organization got off with $200 million. So he is now under criminal investigation. But don't suggest to me that somehow that was the responsibility of somebody other than the guy running the company that puts up ads such as: Zoom Credit. It says: You have been bankrupt, slow credit, no credit, can't pay? Who cares? That is what was advertised to the American people. That wasn't somebody in this Chamber going out and saying, Hey, how about letting us give you a loan if you have bad credit. Was it somebody in this Chamber who decided we are going to create credit default swaps? That is like saying ``the devil made me do it'' from the old TV show. No, no, no. It was a group of people who are high fliers, hotshots, wearing silk shirts and monogrammed sleeves, and they go out and create all of these exotic instruments such as credit default swaps, and they weren't enough; they have to do synthetic or naked default swaps with no insurable interest on the other side of the transaction. It was simply wagering. It had nothing to do with investment. It wasn't somebody in this Chamber who said please do this. It was the most unbelievable greed and avarice I have ever seen in the history of this country by a lot of folks. It created big institutions--I am not saying everybody did it, but enough did it to imperil this country's economy and to require emergency action to, as the Treasury Secretary then said, ``save the American economy.''

All this was going on. Everybody was having a carnival and making lots of money. In 2008, Wall Street had a net loss of $35 billion and paid bonuses of $16 billion. I got a master's degree in business. I went to business school. There is no place that teaches that--to go lose a bunch of money and then pay huge bonuses. This was a carnival of greed that went on in this country and steered this country right into a ditch.

When my colleagues say it is government that did that, I am sorry, that is flatout wrong. What government did--and they did it for a number of years in the last decade--is they hired a bunch--and the previous administration is especially responsible--of regulators who didn't like government and didn't want to regulate. One of the key people who came to this town in a key position of regulatory responsibility said: Hey, this is a new day. This is a business- friendly place. Understand that. We are going to be willfully blind here for a number of years. So do what you want; we won't watch and we don't care.

So the responsibility for regulatory authority is not in this Chamber.

I am not somebody who comes here to blame previous administrations very often, but when the Bush administration came to office--about the same time that Gramm-Leach-Bliley, by the way, with the support of the Clinton administration, repealed Glass-Steagall and said you can create big financial holding companies as big as you want and you can merge investment banks with commercial banks and security sales, and you can do it all--a one-stop financial shop. It will be great, and we will call it modern. About the time that passed--over my

objections, as I was one of eight Senators who voted no, and I was out here six, eight times opposing it--about that time, we had a new administration come in and say: We are going to put regulators in place who have no interest in watching what you do, so do what you want. They put out naked credit default swaps and trillions of dollars for them. Who cares? If you want to increase your leverage from 12 times, to 20 times, to 30 times your capital, fine. We will have a meeting in the basement of the SEC, and we will, just like that, approve you to be able to increase your leverage to 30 times your capital. And it will hardly be reported by anybody because we are not watching anything. They were blind regulators--dead blind. Unbelievable.

Don't blame this on someone else. We can blame it on bad legislation a decade ago. That is fair. Those who were making bad loans and taking big checks to the bank and filling it with millions of dollars were doing it because they were greedy and nobody was willing to stop them. That avalanche of greed built into a bubble of speculation that really injured this country and nearly ran it off a cliff.

By the way, at the same time all of this was happening in the last 15 years or so, the financial institutions decided they were going to securitize everything. Doesn't matter; find some debt, and we have people who can roll it into a security. Once they do that, they can sell it three, four times, to an investment bank, to a hedge fund, you name it, and they can get a rating agency--because the investment banks pay the costs of the rating agencies that rate their securities, which is a pretty big conflict of interest--to help roll these forward, and nobody has any skin in the game.

My colleague talks about how unfair it would be to ask somebody to save at least a portion of a loan they are providing. Do you know what? The only way you have proper underwriting of loans in this country is if you sit across the table from somebody who wants to get a loan and look at their credit reports and determine if they are eligible. The only way you ever ensure that happens the right way is to have that kind of underwriting, and you would do that if you are going to have some continuing risk.

But if you are going to give a $750,000 loan to somebody who makes $17,000 a year--and it happened, by the way--a liar's loan, requiring no documentation, with no interest or principal paid because he put it all on the back side--if you can sell that in a security to somebody else and you have no further risk, you get your money free and clear. That is what was going on at every single level. It was just the most unbelievable, irresponsible lack of regulation, perhaps, in the history of this country.

I want to say that the government has made plenty of mistakes, but don't blame this Chamber or people who were elected to the Senate for the bad behavior of somebody who takes $200 million away from the biggest mortgage finance company in this country and was selling liar's loans and advertising that if you have bad credit, no credit, slow credit, and bankruptcy, come to us, we are going to give you money. Don't blame that on somebody else. Put that blame where it rests--the unbelievable greed among the people who should have known better and should not have been able to do it in the first place because the regulators should have been all over them in a moment, saying: You cannot do it. That didn't happen.

This demonstrates the need for effective regulation. The free market system works, but when people try to subvert it, when people commit fouls in the free market system, it needs a referee with a whistle and a striped shirt. That was missing in the last decade.

Mr. President, one final point. Part of this argument is excusing criminal behavior because there wasn't a cop on the beat. Don't excuse the criminal behavior. We need cops on the beat. We need legislation that will make sure we close the loopholes that exist. We need to legislate soberly and thoughtfully and give the American people some notion that this behavior cannot happen again.

By the way, I think the way we do that is to make certain you cannot be too big to fail. By what justification should the major financial companies of this country continue this kind of concentration and escalation of size in a manner that jeopardizes this country should they fail? By what justification should we allow that to continue? The answer is that it should not.

There are two amendments to address that I am aware of--one by Senators Brown and Kaufman, which creates a numerical limit on size, and I fully support. The other one, which I prefer because it has my name on it, is to flatout break up firms that have gotten too big to fail to the point where they are not too big to fail. That is the most effective way, in my judgment, to do this.

I will speak ever so briefly about the Sanders amendment. I got sidetracked by my colleague from Oklahoma, as is so often the case.

My colleague from Vermont has offered a piece of legislation that I think has great merit. Let me tell you what it doesn't do. It does not, as those who fear the amendment say, invoke the tentacles of the U.S. Congress in the construction of monetary policy. That area belongs to the Federal Reserve Board.

The Federal Reserve Board is a creature of legislation that Congress created. If you went back and read the debate, the country was assured that this was not creating a strong central bank. There were just lead pipe assurances to that, but, of course, that turned out not to be the case. Nonetheless, the Federal Reserve Board creates monetary policy, and there is a thought--and I agree with it--that we don't want monetary policy created on the floor of the Senate. We don't want to intrude on the creation or development of monetary policy. We do fiscal policy, the taxing and spending side. The monetary side is the Federal Reserve Board's terrain.

But the Federal Reserve Board ought not be unaccountable to anybody for anything. The Federal Reserve Board, it seems to me, deserves, No. 1, to be audited properly--a Government Accountability Office audit-- which the Sanders amendment would require. And I know the Fed is having an apoplectic seizure thinking that maybe this amendment will pass. You know what. It is the right thing to do, to say at long, long last, there should be an audit of the Federal Reserve Board. I am not talking about auditing monetary policy but what it does generally. It is necessary, and I support this and think it is the right policy.

No. 2, this legislation does what I and many others have been pushing the Fed for, for some while. Last July of 2009, I had a letter signed by 10 of my colleagues to Chairman Bernanke saying: You have now used your emergency powers for the first time in U.S. history to open your loan window to investment banks, as never before in the history of our country. Serious financial problems, you say? Open the loan window and come and get some money. So we write and say: OK, you did that on an emergency basis for the first time in our history. What was the result? Who got the money? What were the terms and the conditions?

The American people deserved to have that information. I wrote again on March 19 of this year. On both occasions, we received letters from Chairman Bernanke that were polite, thoughtful, but that said: You know what. We don't intend to provide you or the American people information about what happened at our loan window. We don't intend to talk about the loans we gave to investment banks for the first time in history.

I wonder--and this is idle curiosity--did we have investment banks show up at this window and get near zero interest rate loans and then invest them back into Treasury bonds? How much money did they make on that transaction? I know many of these organizations--the largest investment banks--are now making record profits. But it is not as a result of loaning money to businesses in this country that need the lending; it is by trading securities--once again, right back in the same trench.

This legislation that my colleague, Senator Sanders, has offered is legislation that will put in law a requirement that the Federal Reserve Board disclose the activities, in a certain period of time, of who received the lending from the Federal Reserve Board, what the conditions were, and what the amounts of funding were.

The Chairman of the Fed, who said this might make it very difficult and it will undermine this and that, undermine these programs, publicly releasing names--look, two Federal courts have required the Federal Reserve Board to do this. Two Federal courts--the district court and the appellate court--have said the Federal Reserve Board does not have the authority to withhold this information. The Federal Reserve Board has once again said: It doesn't matter, we intend to appeal again. They, apparently, intend to keep this tied up in the court system as long as they can. This amendment in this piece of legislation will say to the Federal Reserve Board: You cannot do that. The law requires you to disclose to the American people what you have done.

I come here to say I think this is a good bill. I had introduced a separate amendment on the disclosure by the Fed, but if we pass the Sanders amendment, that will take care of my amendment. Some people talked earlier about duplicates. Mine will be taken care of if we pass the larger amendment offered by Senator Sanders.

I support the amendment. I know a good many of my colleagues will too. It has been a long time to try to get an audit of the Federal Reserve Board--not an audit of the monetary policy but an audit of the Federal Reserve Board. But if we do that, this will be a significant step forward for those of us who believe that is necessary and important for the country.

I yield the floor.

Will the Senator yield for a question?

I think it is commendable that there has been a burst of activity on the Senate floor in the last couple of hours. We have had a number of votes. It took some while to wait for this to happen. I agree with the Senator from Connecticut and the Senator from Alabama that to the extent we can accommodate votes on a wide range of subjects--this is an issue that is very consequential to the future of the country, and we want to get it right.

From my standpoint, I have a couple of amendments I think are very important. Time agreements are not a problem for me. I am interested in having the opportunity to explain an amendment and have a short debate and then have the Senate register its judgment. I appreciate what the Senator just said. He would like to see us move along and be able to offer amendments. There are a lot of them on too big to fail and credit default swaps. I will talk to the managers. I hope I will have an opportunity to get them on the floor and get them offered.

Mr. President, before the Senator from Rhode Island speaks, let me just ask if he will yield so that I may ask a question.

Mr. President, the Senator from Montana has offered an amendment. I am trying to determine if there is a list and how I might get on the list. I might propound the question to the Senator from Connecticut. There has been a Republican amendment offered, and that was set aside and the Senator from Montana offered one. I would like to talk to whoever is making a list.

Mr. President, I thank my colleague from Rhode Island for his courtesy, and I thank Senator Dodd. I was here earlier. I will come and talk about that queue as it exists. I hope my amendment on too big to fail will be part of the early amendments.

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

Madam President, I know the Senator from Connecticut has been on the floor all of this day managing a piece of legislation, and it appears to be kind of a lonely process here. He is managing what is a very important piece of legislation dealing with financial reform or Wall Street reform. I know he is perhaps as frustrated as everybody else that we are not making more progress and voting on amendments. I know work is going on behind the scenes as well.

I hope we will be able to move ahead and get a good piece of legislation through the Senate. I don't know what time it will take, but what is far more important is that we get it right. The consequences of not making the changes necessary would be that we would experience again at some point in the future the kind of financial crisis we have seen in the last couple years. It is a significant crisis for a lot of Americans--about $15 trillion of lost value, but that is an aggregate number that doesn't mean much.

What means something is that millions of people are losing their jobs, their homes, and many are losing hope. That is the consequence of this kind of very deep recession--the deepest recession since the Great Depression.

Following the Great Depression, if you read the economic history of the country, you will find that a number of very aggressive pieces of legislation were put into place to protect our country and make certain that could not happen again. Those pieces of legislation enacted into law lasted for a long time--70 or 80 years--to protect this country's economic interests. But what happened was that a number of people decided they were old-fashioned provisions and needed to be modernized, so we had modernization legislation that I did not support. We had to modernize the system. That modernization a decade ago caused massive problems. So now we are back having experienced the last couple of years and a very deep recession that is not a natural economic disaster; it is manmade. I think it is caused by the most unprecedented greed this country has ever seen among some of its largest financial institutions.

It is important to say that banking is critical to this country's economic existence. You need production and you need finance. I don't think we ought to suggest--and nobody has--that finance is not worthwhile. It is very important. You can't produce or have businesses without the ability to provide finance for those businesses. But over a couple of centuries of economic history in this country, sometimes producers have had the upper hand; sometimes those in the finance production have had the upper hand. For the last 15, 20 years, those in finance production in this country have had an unbelievable amount of clout and sway and the upper hand. That has caused us serious problems.

Today, I am not talking about the origins of this latest economic wreck--I have done that many times before--but starting with the subprime loan scandal that permeated much of the country, there was unbelievable greed and excess, securitization of bad mortgages that were rated AAA and passed from one to another, from mortgage bankers, to hedge funds, to investment banks, and back and forth.

Then even that wasn't enough. They were passing a bunch of bad paper around where everybody was making big fees, not knowing what they were buying, and buying things they would not get from people who never had it.

That wasn't enough. Then we created synthetic securities and naked swaps. I guess that was a natural extension by those who were greedy enough to believe you have to have something to trade no matter what the circumstances. So they created instruments--debt instruments, securities, and others--that had no value. They were debt instruments related to values of things that were extraneous, so there was no insurable interest.

A naked credit default swap is something that has no insurable interest on either end. It is simply two people who have decided to bet on whether a bondholder over there may or may not default, despite the fact that neither of these people has an economic interest in the bond. They are just making a wager. They could have just as well put

it on black or red at the roulette wheel or played the craps table or played blackjack. It is not an investment; it is just betting.

That all went on, and there was a dramatic amount of new leverage and borrowing. I cannot begin to describe the excess that occurred. I guess the final circumstance for me to see what was wrong with all of this was that in 2008 the ``Wall Street'' firms earned a net negative of about $36 billion, that is, they had $36 billion of losses, and still paid, I believe, $17 billion in bonuses. That represents sort of the most egregious excesses you can imagine.

The question now and the circumstance that exists that I know the Senator from Connecticut cares a lot about is how do we restore confidence? How do we restore some confidence for the American people going forward? If we do not have confidence, this economy is not going to expand and rebound.

The answer is, we put together a piece of legislation called Wall Street or financial reform and construct it the right way to try to make certain the things that were done cannot be done again, to make certain the kind of economic wreck that occurred cannot happen again.

My colleague from the Banking Committee, the chairman of the Banking Committee, Senator Dodd, and others have done quite a good job of putting together a piece of legislation that moves in that direction. It can be improved, in my judgment, and perhaps will be. I know he will agree with that as well. There are other ideas that can be brought to the floor of the Senate on this legislation.

I am going to talk about two of them ever so briefly--actually three, but one of them will be very quick.

Senator Grassley and I intend to offer an amendment that says to the Federal Reserve Board: You must disclose to whom you were providing emergency assistance during the financial debacle on Wall Street, including loans out of the discount window to investment banks for the first time in history. You must disclose whom you provided loans to, what the terms were, and how much those loans amounted to. Two Federal courts--the district court and now the appeals court--have ordered the Fed to do so. The American people, they said, deserve to know. The Fed announced they intend to appeal that once again.

Tomorrow, Senator Grassley and I will offer an amendment that says the law will require them to make that disclosure. The American people deserve to know.

On the other two issues, one is on too big to fail. This is central to the bill. There are a lot of ideas about too big to fail. Mine is, I think, the most direct, the most decisive, and the most effective.

If the Financial Stability Oversight Council decides that an institution is too big to fail--that is, by definition, the construct and size of that organization would create a moral hazard to this country, would create unacceptable risks and grave risks to the entire future of the American economy--if that is the case, if that is the judgment, then it seems to me you have to pare back portions of that enterprise until it is not any longer too big to fail and causing grave risk to the future of this economy.

In my judgment, the most direct and reasonable thing to do is to simply require that you restructure and require divestiture, where necessary, of those portions of an institution that have become too big to fail and cause a grave risk to the future of this country's economy, should they fail.

I will be offering that amendment. I know it is different than some others. My colleagues, Senator Brown and Senator Kaufman, have an amendment which I will vote for and support as well on this issue. I think this is probably the most direct and probably the most effective amendment on the issue of too big to fail.

Finally, I am going to offer an amendment that would ban what are called naked credit default swaps. If people want to gamble, just bet one another. There are plenty of places to do that in America. Las Vegas comes to mind. Atlantic City comes to mind. It seems to me, we should not mistake betting for investing. We ought to get back to basics in our financial institutions.

I think we have something close to $25 trillion of credit default swaps that exist now. I don't know what percent of them have no insurable interest, that represent just wagers, just flatout bets rather than investments. In England, a study suggested that about 80 percent of credit default swaps are what are called naked credit default swaps with no insurable interest. If that is the case on this side, we are talking about a notional value of perhaps $16 trillion, $17 trillion of instruments out there that simply allow for the making of wagers that have nothing at all to do with the insurable interest and bonds.

I mentioned earlier that Mr. Pearlstein, who writes for the Washington Post, once observed a pretty simple question: Why should there be more insurance policies to insure bonds than there are bonds to insure? The answer is obvious. They created these excess insurance policies that have no insurable interest so people could just gamble. It is fine if you are gambling with your own money, but once you start gambling with the taxpayers' money, if you are a federally insured bank and the taxpayers are going to bear the risk, that is a different matter.

I am going to offer these amendments. I say, again, as I said when I started, all of us who come to this debate about financial reform or Wall Street reform understand that an effective, functioning system of finance in this country is essential to the well-being of America. I do not think anybody wants to take apart a system of finance that has the different levels of FDIC insured banking, commercial banking, investment banking, venture capitals, hedge funds--all those are important to this country's long-term future. I personally would like to see hedge funds and derivatives regulated. I have talked about that with Senator Feinstein and others for a long time. It is very important that we have a system of finance that has the confidence of the American people and that we need in order to finance the production in this country.

Ultimately, all of us would like the productive sector to be repaired, to grow and hire people once again, employ people, and have ``Made in America'' put on products once again. All of us would like to see that happen. That will not happen unless we have a working system of finance as well.

We had a hearing where representatives from three businesses came to that hearing. All three were small- to medium-sized businesses. All three had sailed through this deep recession, with some difficulty, but were still profitable. All three were ready to expand, ready to hire more people, and none of them could find any financing to do it. None of them have been delinquent. All of them had existing banking enterprises with which they had a relationship and always paid back everything they owed. They had never been delinquent. Yet they could not find the funding to expand their business and hire more people. That is what is wrong.

Even today, by the way, some of these record profits that are coming from some of the biggest financial institutions are coming not as a result of their lending money to people but as a result of their trading, in many cases in some of the same securities that caused some of the same problems a couple years ago and over the last decade.

This reform legislation is essential. This is one of the most important pieces of legislation we will have considered in this Congress--probably the most important. In many ways, the consequences of what we do will be with us for a decade or more. That is why it is important to get this right.

I say to my colleague from Connecticut, I wish to be helpful to him. He has written a piece of legislation that has much to commend it. This Senate owes him a debt of thanks and the Banking Committee a debt of thanks. That does not mean we cannot offer amendments that might improve pieces here and there. But this is an awfully good start.

My hope is, Senator Dodd will have sufficient cooperation in the Senate to begin getting votes on amendments so we can get through this, have the debate, and get the best ideas that everybody has to offer and get a piece of legislation that will give the American people some confidence once again.

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

Mr. President, I wanted to, in a few minutes, talk about the START treaty. But before I do that, I would like to engage in some discussion with the Senator from Connecticut about financial reform.

Even as I do that, and I will do that briefly, I wanted to say that not many Members of the Senate understand how much time and effort the Senator from Connecticut has put into this product of financial reform--Wall Street reform, as it is called. I, for one, very much appreciate the work that has been done. There is a lot in the bill that has been brought to the floor by Senator Dodd that is commendable and that is right on point. There are some areas where I, perhaps, will want to offer suggestions. Maybe the Senator will agree with them, maybe not.

I wish to say as a starting point that I am very pleased that we have the bill on the floor now, open for debate, open for amendment next week. I hope we keep it on the floor and improve it in areas where it can be improved, make modifications where necessary, but in the end be able to vote for a piece of legislation that will allow us to tell the American people: We understand what happened, and we have tried to take steps now to make sure it cannot and will not happen again.

One of the areas where I will offer an amendment--and I understand it will be a controversial amendment--is on the issue of too big to fail.

My colleague from Connecticut and others on the Banking Committee have constructed one approach on too big to fail, and I will be supportive of that approach. But I do think the too-big-to-fail issue at its root is, if you are too big to fail, from my standpoint, you are too big. And I come down on the side of one-fourth of the Governors of the Federal Reserve Board who have said this, and many others. I come down on the side of those who have said: If you are too big to fail, you are too big.

I think the council that is established under this legislation ought to at that point--once designating a company that has become too big to fail, that is too big to fail, that causes a moral hazard and an unacceptable threat and risk to our economy, then I think divestiture is in order of that portion of the company that puts this country at risk as a result of them being too big to fail. That is a different approach than is used by the committee but an approach that I think is still credible; an approach, in fact, that has been described by the former Chairman of the Federal Reserve, Greenspan, by, as I said, three members of the Federal Reserve Board saying: There ought to be divesture. That would be one of the amendments I will offer next week and discuss.

Again, what has happened leading up to and since the near collapse of our economy, as a result of unbelievable activities at the top of our financial food chain, the largest financial enterprises have actually become much larger because of actions of the Federal Government, among other things, to encourage them to become larger. I think an appropriate amendment would be for us to have a real discussion about, should we not just decide if you are too big to fail, you are just too big.

I am happy to yield.

First, the point the Senator from Connecticut made, which is so important, is effective regulatory authority. If we don't have regulations that work or regulators who care, what happens is what happened to us in the last couple years. We have a buildup of substantial risk, effectively allowing some to gamble rather than invest. We desperately need effective regulatory capability and regulators who care. I understand the risk council in the underlying bill is allowed to go toward divestiture but not require it.

My point is, I will offer an amendment that would actually require it at the front end, simply saying, if we have a category that is described as too big to fail, meaning this is too large an organization to be allowed to fail, which in my lexicon is no- fault capitalism, if they are now at such a size that they are too big to fail, they pose a moral hazard, a grave threat and risk to the economy, if they were to fail, then I say do as we have done on some other occasions. We broke up Standard Oil into 26 parts, and it turns out the value of the parts was substantially greater than the value of the whole. It turned out to be a pretty wonderful thing. We broke up AT&T for other reasons. I am not rushing to try to break up anybody, but if we are serious about describing that which we think creates substantial, additional risk in the future, then we should take action to eliminate those kinds of risks, if the risk is, in this case, too big to fail.

I would like to get rid of the category of too big to fail. The Federal Reserve Board has had such a category for a long time. We have always known that if one is too big to fail, they are at a significant advantage to virtually every other financial institution. They can do business. They can take risks, but they can't fail. They are too big to fail and, competing with them, they have a safety net. My amendment will be simply, if you get to that point where this council judges you to be too big to fail without substantial grave risk to the country's economy, then I think divestiture that is sufficient to get the institution back to an area where it is not too big to fail would be in the public interest. My amendment would require divestiture.

The other amendment I will be offering is one that is also perhaps controversial. That is on the issue of naked credit default swaps or what some people call synthetic default swaps. They have been described, accurately so, as betting or wagering rather than investing. I have heard the descriptions of the investment bankers about why they are useful in dealing with risk and so on. But it is not useful, from my perspective, to have the largest financial institutions collecting fees for the purpose of arranging wagers. There are places to make wagers, if we call the wager simply gambling. Las Vegas and Atlantic City come to mind. But with respect to credit default swaps, which is a new term in the discussion these days, credit default swaps themselves represent insuring against a bond default, for example. But a naked credit default swap means you have no insurable interest in anything. You are simply betting someone else about something that might happen with a bond issue, despite the fact neither of you own the bond. I began thinking about a column Mr. Pearlstein wrote in the Washington Post. He always writes interesting columns. He said: Why should there be allowed more insurance against bonds than there are bonds? Then I read a piece that in England they actually tried to categorize it, what percent of the credit default swaps were synthetic or naked, having no insurable interest? The answer was about 80 percent. Think of that. About 80 percent of these naked credit default swaps have no insurable interest on anything. It is just a way to wager.

I believe that is a category that ought not be allowed. I will offer an amendment on that. I recognize that that may also be a controversial issue but one, nonetheless, I think is important.

Nobody knows this better than the chairman of the committee. I think it is important we have a productive sector to produce things, to produce things that might have a label that says ``Made in America.'' It is important we have a financial sector because we can't produce without finance. Production is necessary for finance as well. If you look at a couple hundred years of economic history, you will find that, in some cases for decades, production has the upper hand and finance is out here sort of moving at the beck and call of production. Then, in other areas, the financing industry has the upper hand. You see it move back and forth. We have been through a couple decades in which finance has the upper hand and has been calling the shots.

It is critically important to have a system of finance, and that system includes investment banks, FDIC-insured banks, venture capital funds, a wide array of financial institutions. We desperately need that. We can't have an economy that grows without it. But it is very important that financial system be one that has proper, effective regulation so we don't see it spin out of control as we have seen in the last 10 or 15 years.

In 1994--15\1/2\ half years ago--I wrote the cover story for the Washington Monthly magazine. The title of my cover story was ``Very Risky Business.'' I took a part of a title of a movie back then. At that point, I think there was something like $18 or $28 billion notional value of derivatives out in the economy. I talked about the risk those derivatives posed to our banking institutions that were trading on their own proprietary accounts on derivatives. It is not as if I have just discovered this issue. With Senator Feinstein from California and others, I have been on the floor many times talking about the need to regulate derivatives and regulate hedge funds. We have been spectacularly unsuccessful in that over the years, but now at long last, with the legislation that is coming to the floor and the opportunity to have a wide-open debate with a lot of amendments, I think all of us can believe that if we are successful--and I believe we can be--we will do something that has merit for the future stability of this country's economy.

Again, I know there is a lot of language about banking and investment banking out there. I use some of it, perhaps, that is pretty hot language. Some of it is well deserved by a lot of people who made a lot of money, as they steered this country's economy into the ditch. But let it be known we need a financial system that works in order to finance production. All of us want the same thing. We want to put this country back on track and expand the economy and create jobs once again. That is the purpose of all this.

I used to teach a bit of economics in college. I always described to students that the economy is not like some engine room on the ship of state where, if you get down in the engine room and find the right dials and switches and push them all just right, that the ship of state will move forward. It is not that at all. It is about confidence. If the American people are confident in the future, they do things that manifest that confidence and expand the economy. They buy a new suit of clothes, a car, a house, take a trip. They do the things that manifest their confidence in the future. That is expansive to the economy. If they are not confident, they do exactly the opposite. That contracts the economy.

That is why this legislation is going to go a long way toward saying to the American people: You can have confidence this sort of thing is not going to happen again. That is the precursor

to allowing us to see an economy that expands because people have some confidence in the future.

I started by saying thank you to the Senator from Connecticut. I say, again, there is a lot of work that has gone into this. It is not perfect bill. There will be much that is controversial. I will offer a couple controversial amendments. At the end, I hope we will all have worked together to accomplish the same thing for the country--the opportunity for more economic growth and expansion and more hope and opportunity for American families.

I ask unanimous consent to speak in morning business for as much time as I may consume.

Mr. President, yesterday there was a hearing in the Senate on the Strategic Arms Reduction Treaty we have negotiated with Russia. I was not on the committee, but there was testimony by Dr. James Schlesinger and Dr. William Perry, two of the most veteran arms control experts, who came to the Foreign Relations Committee and said they support the Strategic Arms Reduction Treaty with Russia.

I was in Russia a couple weeks ago and had an opportunity to tour a number of sites that we are actually funding from the United States through the Cooperative Threat Reduction program, the partnership we have with Russia in a number of areas, stemming from, among other things, what is called the Nunn-Lugar law, the Nunn-Lugar program. I have long supported the Cooperative Threat Reduction Program called Nunn-Lugar, named after two of my colleagues, Senators Sam Nunn and Richard Lugar.

In the early 1990s, they wrote legislation that allows us to work with the Russians and other former Soviet states to deactivate nuclear weapons and to destroy delivery systems.

I wish to show a couple of the photographs and if I might show something I have had in my desk for a while. I ask unanimous consent to do that. This is a photograph of a blackjack Russian bomber being dismantled. This is the wing strut from that bomber. I have a piece that was sawed off from the bomber's wing strut in my desk simply because it was given to me, and I thought it was so significant that the wing of a Soviet bomber that used to carry nuclear weapons, part of that wing is now in my Senate desk, not because we shot the Russian bomber down; it is because we actually provided the funding to saw the wings off and destroy the bomber. That is success.

This is a photograph of a missile silo in the Ukraine. I have in my desk, as well, a hinge. This hinge came from that missile silo. That missile silo held an SS-18 missile with a nuclear warhead aimed at the United States of America.

Now, where that missile silo once existed, with a missile and a warhead aimed at America, is now a field of sunflowers. You can see from this picture the missile silo was blown up, dismantled. I actually have a piece of the hinge. What a great success. The missile silo did not have a missile delivered to destroy a city in America. We actually spent the money to pay for the destruction of the missile silo under the Nunn-Lugar program. What a spectacular success that is.

This next picture is of a submarine being dismantled. It is a Russian submarine. It is a Typhoon class ballistic missile submarine, and it would have carried missile tubes, and those missile tubes in that submarine under the water would have contained nuclear warheads that would have been used to destroy our country.

Here, in this picture, is an example of the missile tubes on that submarine. These too were destroyed. I have a little vile of copper wire that was ground up that came from that submarine. Now, we did not sink that submarine in an act of warfare. We actually paid to have that submarine dismantled and the copper wiring ground up. I have some of the copper wiring here in my desk, just to remind us how important this program has been.

Now, we have on this Earth about 25,000 nuclear weapons, roughly. This comes from the Union of Concerned Scientists in 2010. It is estimated Russia has about 15,000 nuclear weapons; the U.S. probably about 9,000-plus; China, a couple hundred; France, several hundred; Britain, a couple hundred. So here is the quantity of nuclear weapons on our planet. The question is, What would happen if someday in some way someone detonates a nuclear weapon in the middle of a major city on this planet? I know what will happen. It will change life on Earth as we know it.

So let me describe a story. And keep in mind, we have 25,000 nuclear weapons on the planet. Let me describe a story. One month after 9/11, a CIA agent nicknamed Dragonfire reported to the CIA that he had evidence that a 10-kiloton Russian nuclear weapon had been stolen and had been smuggled into New York City and was to be detonated. That was 1 month after 9/11. It was October 11, 2001, to be exact. Dragonfire reported that al-Qaida terrorists had stolen a 10-kiloton nuclear bomb from the Russian arsenal and may have smuggled it into New York City.

It was not reported at that point, but there was an apoplectic seizure here. The President and others who had this information were not sure whether it was accurate or not. It was a report from a CIA agent, and they--just in the shadow, 1 month later, of 9/11 of course-- were very much on their guard. Our country was pretty much shocked by everything that happened.

So this report by Dragonfire meant that Vice President Cheney moved to a secret mountain facility, along with several hundred government employees, we are told. So they were the core of an alternative government that would operate if Washington, DC, were destroyed by a nuclear weapon.

We are told that President Bush dispatched a nuclear emergency support team to New York to search for a weapon. To not cause panic, no one in New York City was informed of the threat, not even the mayor of New York. After a few weeks, the intelligence community determined that Dragonfire's report of someone having stolen a Russian nuclear weapon and smuggling it into this country was probably a false alarm.

But when they did the post-mortem on it, they all understood it was perfectly possible that a nuclear weapon could have been stolen from the Russian arsenal, perfectly possible that a nuclear weapon could have been smuggled in to New York City or Washington, DC, and possible for terrorists to disarm the safeguards and explode the bomb.

No one said it was impossible that a terrorist group would want to kill several hundred thousand Americans with one bomb in the middle of an American city. On the contrary, all of the experts knew this was possible. Now, all of that--by the way--all of that angst was about one 10-kiloton, rather small Russian nuclear weapon reported by a CIA agent to have been stolen.

But there is more than one nuclear weapon; there are 25,000 nuclear weapons on this planet. Think of the concern about the potential stealing of one, and then ask the question, What do we have to do to make sure that nuclear weapons that now exist are safeguarded, that there is adequate security, and, even more important, that we stop the spread of nuclear weapons to others, other countries, and certainly terrorist groups who want to acquire nuclear weapons?

The description of Dragonfire's report comes from a former Clinton administration official, Graham Allison, an expert on nuclear proliferation. He wrote about the incident in a book called ``Nuclear Terrorism: The Ultimate Preventable Catastrophe.'' The description I have just read is a part of the book by Mr. Allison.

Now, even though the Cold War ended two decades ago, we still have, as I have indicated, about 25,000 nuclear weapons in the world. Mr. President, 95 percent of them are owned by the United States or by Russia. We are now operating under the Strategic Offensive Reduction Treaty, also known as the Moscow Treaty. It requires the United States and Russia, by our agreement, to have no more than 2,200 ``operationally deployed'' strategic nuclear weapons by 2012. But it does not do anything to restrict nuclear delivery vehicles--bombers, missiles, submarines. And it does not have any verification measures. It expires in 2012.

A few weeks ago President Obama and Russian President Medvedev met

in Prague, the Czech Republic, and signed a new strategic arms control treaty. It is called START. It limits each side to 1,550 deployed strategic nuclear warheads--30 percent lower than the existing treaty. It limits each side to 800 deployed and nondeployed ICBM launchers, SLBM launchers, and heavy bombers equipped for nuclear armaments--one- half of what the START treaty allowed. It sets a separate limit of 700 deployed ICBMs, deployed SLBMs, and deployed heavy bombers that are equipped. It has verification regimes for on-site inspections, telemetry exchanges, data exchanges, and so on.

Now, I know this treaty will be controversial in some quarters, but I want to describe what ADM Mike Mullen, Chairman of the Joint Chiefs of Staff, has said just in the last month, because some are worried about whether our nuclear weapons work, whether our stockpile is reliable. What if we use it? Can we expect it to work? Well, the other side of the nuclear debate is, if you use it, you probably will never be around to wonder whether it works. I think the face of this Earth will change if there is ever an exchange of nuclear weapons of any kind between adversaries that have multiple nuclear weapons.

ADM Michael Mullen, the Chairman of the Joint Chiefs of Staff, says:

I, the Vice Chairman, and the Joint Chiefs, as well as our

combatant commanders around the world, stand solidly behind

this new treaty, having had the opportunity to provide our

counsel, to make our recommendations, and to help shape the

final agreements.

So the Chairman of the Joint Chiefs says they are satisfied with this treaty, believe it is a good treaty.

Linton Brooks says something very important. He is the former NNSA, National Nuclear Security Administration, Administrator from 2003 to 2007. He says:

START . . . is a good idea on its own merits, but . . . for

those who think it's only a good idea if you only have a

strong weapons program, I think this budget ought to take

care of that.

He is talking about the budget the President has sent to the Congress for life extension programs and the other things we do to make sure the nuclear stockpile is up to date.

He said:

Coupled with the out-year projections, it takes care of the

concerns about the complex and it does very good things about

the stockpile and it should keep the labs healthy. . . .

He said:

. . . I would've killed for this kind of budget.

The reason I mention this is that we have people coming to the floor of the Senate now, and in public discussion--and Douglas Feith is an example of them. He says:

Since the administration is so eager for [the treaty], the

main interests of conservatives will relate to modernization.

Republicans are interested in the U.S. nuclear posture, the

political leverage they have will be the treaty. . . .One of

the hot issues is going to be the replacement warhead. . . .

What does that mean? That means we have had people in this Chamber and others--including the neocons, and Mr. Feith and others--they have always wanted to begin building new nuclear weapons. It started with: What we need to do is, we need to build new designer nuclear weapons. We need to build earth-penetrating bunker-buster weapons so we can use them. In Afghanistan there were some folks who were hold up down, well underground, and so: What we need to do is develop designer nuclear weapons, earth-penetrating bunker-buster nuclear weapons.

Well, Senator Feinstein and I and some others got that abolished. It makes no sense to me for us to be off building new nuclear weapons. It just does not make any sense. The fact that the bunker-buster earth- penetrator was not built--that does not matter--then they came with the RRW, reliable replacement weapons. Substantial costs of additional funding to build new nuclear weapons called the replacement weapons.

Here are some statements by some skeptical U.S. Senators about this START treaty:

Well, I can tell you this, that I think the Senate will

find it very hard to support this treaty if there is not a

robust modernization plan. . . .

Another Senator:

The success of your administration in ensuring the

modernization plan is fully funded in the authorization and

appropriations process could have a significant impact on the

Senate. . . .

It means you have to be building additional nuclear weapons, you have to spend X amount of money here and there in order for us to support the START treaty.

Another Senator says:

My vote on the START treaty will thus depend in large

measure on whether I am convinced the administration has put

forward an appropriate and adequately funded plan to sustain

and modernize the smaller nuclear stockpile it envisions.

Let my say what the JASON says about all this. It is an organization that really knows what it is talking about and issues a lot of reports with respect to the science of nuclear weapons, because some have said: We have to build a lot of new nuclear weapons here because the nuclear weapons we have--dealing with the degradation of the pits and other things--we are not going to be able to have confidence they even work. So here is what the JASON says:

JASON finds no evidence that accumulation of changes

incurred from aging and LEPs--

Life extension programs--

have increased risk to certification of today's deployed

nuclear warheads.

They are saying, quite clearly, there is no evidence there is an increased risk to be able to certify that our nuclear stockpile is reliable.

Lifetimes of today's nuclear warheads could be extended for

decades, with no anticipated loss in confidence, by using

approaches similar to those employed in [the life extension

programs] to date.

So to those who want to go off and spend a lot of money building new nuclear weapons, at a time when we are deep in debt, and leverage that in exchange for voting on the START treaty, I say you are wrong. You are just dead wrong. We have to get about the business of reducing nuclear weapons. We have to get about the business of agreeing to treaties like this because it is our responsibility. It falls on our shoulders here in the United States to be the world leader to steer us away from nuclear catastrophe.

Now, I understand nobody is talking about disarmament here. But we are talking about a circumstance where there is able to be certification that our nuclear stockpile is reliable. That certainly ought to satisfy the appetite of those who want to build more nuclear weapons. We should not be building more nuclear weapons. What kind of a message does that send to the rest of the world? We have 25,000 nuclear weapons on the planet already--the loss of one which caused an apoplectic seizure around this place, for those who knew it, because they wondered what would happen.

Mr. President, 9/11 was several thousand people. What would happen if several hundred thousand people were murdered with a nuclear weapon being exploded in a major city--and not just a U.S. city, any major city on this planet? It will dramatically alter life on this planet.

So I just wanted to say, this START treaty--I commend the President: a job well done. This is a very good and important treaty for our country and for the world. I am going to be strongly supporting it. We will have sufficient resources--the President has seen to it-- sufficient resources for the life extension program to make sure our nuclear stockpile is reliable.

This President has said, to his credit, that our job, our responsibility as a world leader is to provide leadership to stop the spread of nuclear weapons, to do everything that is necessary to keep nuclear weapons out of the hands of terrorists and rogue nations. Our job is to find ways to reduce the number of nuclear weapons on this planet.

The President of the United States hosted at the convention center here in Washington, DC, I think the largest gathering, perhaps, of its kind in history, of world leaders who came here to talk about securing loose nuclear materials and nuclear weapons. Some make light of that: Well, a little gathering; good for all them. No one should make light of that gathering. It was historic and unbelievably important. A very small amount of highly enriched uranium--the size of a 2-liter of soda in the store--is enough to build a nuclear weapon. The loose nuclear materials, highly enriched uranium and plutonium that is available around the

world, must be gathered together and must be safeguarded and kept out of the hands of terrorist organizations. That is what this President was doing: cementing together the will and the agreement with other leaders from around the world to do that. That is unbelievably important. No one should make light of that and everyone should understand the historic importance of what this President has done.

Finally, this START treaty, as I indicated, I think has much to be commended to this country, and this Senate ought not find itself in the kind of dispute it almost always has on everything these days. If there is anything this Senate ought to be able to agree upon, it is that it is our responsibility and in our interests--in our long-term survival interests--to find ways to reduce the number of nuclear weapons on this planet, reduce delivery vehicles, and reach agreements with adversaries and potential adversaries so all of us understand that we cannot allow a nuclear weapon to fall into the hands of terrorist organizations.

I commend the administration. I hope on a bipartisan basis we can give a very strong vote to the START treaty when the hearings are completed and when we have a debate on it on the floor of the Senate.

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

Madam President, first, I wish to make a couple comments about what has just transpired on the floor of the Senate. For the third time, we had a vote, not on anything relating to the ingredients of a bill dealing with financial reform or Wall Street reform, just on the question of the motion to proceed to debate the bill. Just the motion to proceed, yes or no, shall we proceed to bring the bill to the floor and debate it? For the third day in a row, all the members of the minority voted, no, we will not even allow the Senate to proceed to debate Wall Street reform.

It is unbelievable to me. In the shadow of yesterday's hearings, with one of the major investment banks of this country and the disclosure of e-mails deep from the bowels of that bank that clearly suggested they were peddling securities to clients and customers that they knew to be bad securities and also betting against the position of their clients, betting against a recovery for our country--in the shadow of all that, how on Earth can the minority decide we should not even move to debate Wall Street reform?

I find it interesting we have people saying government cannot solve this. There is too much government, too much this, too much that. When we had suffered a Great Depression in this country, it was the Federal Government that took action to put in place some things to try to protect our country's economy and did so for about 60 or 70 years. They said: We are not going to allow banks and FDIC-insured banks and investment banks and securities dealers and others to commingle under one corporation. We are not going to take banks and put risky enterprises fused to those banks. It doesn't make any sense. So legislation was passed to protect this country.

About 10 years ago, there were a bunch of smart people who decided that stuff is old-fashioned. We have to compete with the Europeans, let's allow holding companies to be created, and we will bring banks and investment banks and real estate and all these things together into one big holding company, under one roof. It will be fine.

It turns out it was not fine. At the same time this was happening, big holding companies now being created in which you brought risky things in the middle of banking enterprises whose very perception of safety and soundness is critical to their future--at the very same time that was happening, we had a bunch of people come to town who were supposed to be regulators, the referees, who said: You know what. We are going to be willfully blind. We are not going to regulate. We don't even like government. So do what you want. We will not watch, we will not look.

At the same time that was going on, Alan Greenspan, at the Federal Reserve Board, decided we will let all these institutions behave in their own self-interest, and their self-interest will be what governs what will be the right thing.

He now says that was a huge mistake. Yes, I guess so, probably a $15 trillion mistake. But the fact is, those who were supposed to be regulating and decided not to regulate, those who were supposed to be the referees to call the fouls, wear the striped shirts, blow the whistle, call the fouls when the free market system was being abused, were not around. They were out to lunch someplace for years and years and years.

My colleagues who say, well, we do not want government to do this-- look, I do not know who else is going to set the rules here to decide we are not going to let this happen again. Does it take any amount of intelligence to understand a mortgage company advertising to people in the following way: Do you have no credit? Slow credit? No pay? Bankrupt? Come to us. We would like to give you a loan.

On the floor of the Senate, I have shown solicitation after solicitation by companies that said: If you have got bad credit, slow pay, no pay, come to us. We would like to give you a home loan. It does not take a lot of intelligence to understand that does not work.

And by the way, they also said: If you have got bad credit, come to us. In fact, we will not even ask you what your income is. We will give you a no-document loan. You do not have to document your income. It is called a no doc. By the way, we will give you a liar's loan. They do not call it that, but a no-doc is a liar's loan.

It does not take a genius to understand that is not working very well. But why was everyone anxious to do all of that? Because you could wrap it into a big fat security. Then you could sell it to an investment bank. They could sell it to a hedge fund. They could sell it back again. And, meanwhile, whoever made the original loan got rid of the liability once they sold it upstream.

They got the rating agencies to rate these things as triple A. Incidentally, conveniently, the rating agencies are paid by the very companies whose securities they rate. Sounds like trouble to me. So all of these things were happening, and everybody understands that is not going to hold up. Ultimately all of this is going to collapse. It is a house of cards that is being built. So how do you put this back together?

Well, Senator Dodd and the Banking Committee put a bill together. That is the bill we are trying to get to the floor of the Senate. I think it is a pretty good bill. It tightens things up. It gives authorities to regulators they are going to need and will try to prevent this from ever happening again.

This was not some Hurricane Katrina that came ashore and flattened a bunch of buildings. This was not a volcano erupting. This was not a tornado that came sweeping through and destroyed the town. This was an economic catastrophe that took away $15 trillion from this country. It devastated a lot of families, put a lot of people out of work, a lot of people out of their homes, and in the meantime we see what has happened. And while there are substantial amounts of misery around this country for families and people who have still not recovered from the devastation of this financial near collapse, the folks at the top are now making record profits.

Yes, the investment bank that testified yesterday, record profits, big bonuses. I described earlier bonuses of $142 billion were projected on Wall Street. I talked about in the year 2008, at a point when this all began to collapse, we had something like $36 billion in losses just on Wall Street. And those firms that had $36 billion of losses paid $17 billion in bonuses to their employees.

I have an MBA and went to business school. There is not any book that teaches that in business school: Lose a ton of money and get big bonuses. Yet that is what has been happening. It is a carnival of greed at the top.

By the way, the instruments they created with these mortgage securities and others, securitizing almost anything they could get their hands on, with exotic titles such as credit default swaps--credit default swaps. We have always known about derivatives. I wrote an article which was the cover story for the ``Washington Monthly'' magazine in 1994. That is almost 16 years ago. My cover story for that magazine was titled ``Very Risky Business.'' It was about the danger that derivatives posed to the banking system. That is almost 16 years ago now.

I made the same point in the year 1999 when Glass-Steagall was repealed, and I opposed it. Very risky business. So they create synthetic credit default swaps. Synthetic would be the same as calling it naked credit default swaps. That means, instead of having something at either end of a contract, there is nothing. It is two people making a wager or a bet that something else will happen.

I happen to think there ought not be what is called a naked credit default swap. I think they ought to be outlawed. That is gambling. That is not investing. That is betting. If you want to bet, there are plenty of places to bet in this country, starting with Las Vegas and Atlantic City. They have a business doing that. No one ought to show up on an airplane in Las Vegas or Atlantic City, however, with their depositors' money or with their clients' money and decide that is what they are going to wager on a craps table or a keno table.

Yet that is exactly what has been happening with what are called naked credit default swaps. One study I have seen suggests that of the credit default swaps in England, and I suspect it would hold true here, 80 percent of them had no insurable value on the other side.

I would not be allowed today, this afternoon, to decide I am going to buy an insurance policy on the house of the Presiding Officer in North Carolina. It would be illegal for me to say my interest today is to invest in fire insurance on the Presiding Officer's home, because I have no insurable interest in that home. And it might be that I would buy fire insurance, if I could, and walk around with a box of matches. That is a problem. Right? So I have no insurable interest. It would be against the law for me to buy fire insurance on the home of the Presiding Officer.

That is not the case with respect to naked credit default swaps. You do not have to have an insurable interest in anything. You, with someone else, say let's make a wager here on what is going to happen to this bond. There is an investment bank. Perhaps the investment bank will take part of that wager. They will certainly want to arrange it because they get great big fat fees. That is not investing in America. That is not making loans to small and medium-sized businesses. That is not investing in America's future and strength; that is gambling. And that is what we have come to.

You cannot, in a country such as ours, expand our economy without two things: production and finance. There have been, over 200 years, times when production has the upper hand and when finance has the upper hand. We have been through a period here in the last couple of decades where the financing system of our country has the upper hand.

We need a banking system, we need a financing system, with all of the levels of finance. Yes, FDIC-insured banks. Yes, investment banks, venture capital. We need all of those things. But we need to get back to the basics of the old-fashioned standard of what banking should and used to be; that is, taking deposits and then making loans.

When you make a loan, you do what is called underwriting; that is, you sit across the desk from someone who needs a loan, and you look them in the eye and you evaluate: What is their income? What is their idea; their need; their property; and you decide, yes or no. There has been no underwriting on many of those loans that helped create this foundation of sand in this economy.

There was no underwriting. Because if you could say to someone: You know what, we will give you a new home mortgage and you do not have to pay any interest, and you do not have to pay any principal, even, and you do not have to tell us what your income is--that is a no-doc liar's loan--we will do that for you. Why would someone do that? Because they are not going to have any risk. The minute they do it, they get it wrapped into a fat security and sell it to someone else.

And because the rating agencies think all of these things are triple A, whoever else bought it thought it was a safe security, and then they sold it again and again and again. You passed the risk forward. This was a cesspool of greed with a lot of people making a lot of money and creating a structure that was destined to fall.

The question is: Are we going to do something about that? Is somebody going to take some action to say that you cannot do that any more? That is what the Senator from Connecticut asks with a bill coming from the Banking Committee.

The fact is, he brought that bill out of the Banking Committee, and not one Republican offered an amendment. Not one. They said, we are not going to participate. After they had had hearings for a year, and the Senator from Connecticut had negotiated with them for 5, 6 months, following all of that, they had a markup on a bill to write the bill, and the Republicans said, we are not going to participate. We will not offer any suggestions, no amendments.

Then when the bill is now brought to the floor of the Senate, the Republicans say: Well, we were not part of it. Well, sure, they decided they did not want to be part of it, and that is why they were not part of it. That was an action they took. They say: Well, we believe this is a bailout bill. It is not a bailout bill. I will tell them what a bailout bill is. I voted against it. A bailout bill was when George W. Bush and his Treasury Secretary came to the Congress and said: I want you to pass a three-page bill in the next 3 days, putting up $700 billion to bail out America's biggest financial firms. Yes, that was a bailout bill. And most of

those who called this a bailout bill voted for that. They know what a bailout is because they voted for it. I did not.

But, nonetheless, this is not a bailout bill. This is a bill that finally begins to shut the door on activities that should never have been taking place. Is the bill perfect? No. Should it be changed? There are a number of areas where I think it will be changed once it gets to the floor. But you cannot even address those unless you get past the motion to proceed.

What the minority is doing is saying, we do not intend to let you proceed at all. Well, how about deciding that we are going to do this together and we will get the best of what both political parties have to offer, get the best amendments that can be offered. I have suggested one; that is, naked credit default swaps. If you have no insurable interest, ban them.

Mr. Pearlstein, who writes a column for the Washington Post, made a suggestion that makes a lot of sense to me. Why would you allow more securities in the form of credit default swaps to insure bonds? Why would you allow more of them than there are bonds to insure?

Well, the answer is obvious, because that is gambling above that level. It is very much like about a year and a half ago when the price of oil, or almost 2 years ago, the price of oil went to $147 a barrel in day trading, and I made the point on the floor: There was 20 times more oil bought and sold each day than there was produced each day--an unbelievable orgy of speculation in the oil market. Nearly broke that market. Well, it finally came back down and the people who made the money on the upside also made money on the downside. But, you know, that is what has been happening in this country now for too long.

The bill that should come to the floor of the Senate--and my hope is that perhaps the next vote will have a couple of folks on the other side who agree with us, let us bring a bill to the Senate, let us address these issues that caused this unbelievable avalanche of greed on Wall Street and elsewhere, and let us tighten the reins so this cannot happen again.

Do we want to continue the practice? I showed yesterday on the floor of the Senate I think four examples of companies that are still advertising: Do you have bad credit? Come to us. We will give you a loan. Do you have no credit? Slow pay? Come to us, we will give you a loan. Okay. Are you bankrupt? Come to us, we will give you a loan.

It is still going on. All of this is about securitizing everything and everybody making big fees and being paid big bonuses. There is a smarter way to do financing and banking in this country. We have watched it work for decades, and it has gotten far afield in the past decade or two. We need to pull it back in and say, that is not what our country is about. The free market system is the best allocator of goods and services that I am aware of, but it is not perfect. Sometimes there are fouls in the free market system. Sometimes people try to manipulate it and do so successfully. That is why you need a referee and that is why you need effective regulations that work.

That is what the bill is about. Put together those effective regulations that work. Prevent this kind of economic collapse from happening again. This is not just some academic exercise. There are somewhere around 16 to 17 million people today in this country who woke up this morning and they are jobless and do not have any work. Some of them not only feel jobless, but they feel helpless and hopeless because they cannot find work. Some of them, by the way, have not only lost their jobs, they have lost their homes. This is a very deep recession we have been in, and it has caused unbelievable pain across this country. But not for everybody. Because once again, some of the largest financial institutions in this country are now showing record profits and paying record bonuses.

The question is, are they doing that because they are making loans out there to businesses that are ready to recover and to expand? No. The answer is, unfortunately, no. Once again they are trading securities back and forth, exchanging fees, securitizing virtually everything. There is a much better way to do financing and banking in this country that will strengthen the future of this country. I want to get at the business of getting this bill to the floor, having the minority stop blocking us, and begin offering amendments so we can get the best of what both parties have to offer.

It has been a long time since we have had that sort of thing happen on the floor of the Senate. I was hoping that if there is one thing that might galvanize some bipartisanship in this body, it might be an understanding of the unbelievably excruciating pain the American people have felt as a result of the deepest recession since the Great Depression and perhaps an understanding that the American people demand that this Congress stand up and do something about it, to try to do the things that plug the holes and shut the gates and prevent this sort of thing from ever happening again. I guess that was too much to hope for, at least until now, on Wednesday. We will have an opportunity on Thursday and Friday, perhaps, and I hope perhaps we can get one or two people who agree with us to say: Yes, let's bring this to the floor, have it wide open for amendments, offer amendments, debate amendments, and do what is necessary for the people.

I know the biggest financial institutions have some big disagreements with this bill, but I have some big disagreements with them. I think what has gone on is pretty unbelievable. They have a role to play in this country's future going ahead, but it is not a role I consider betting; it is a role I consider to be investing. If they want to continue to simply make wagers about America and about securities, that is not the financing system we have known and grown to believe is important for this country's future.

I know there is a lot of disappointment after this last vote. My hope is there will be some who continue to think and rethink. Is this what my constituents want? Do they want me to decide to block even the opportunity to address these unbelievable gaping holes in our financing structure that allowed this country to be steered right into the ditch, the biggest economic wreck in 70 years? I think they would understand that is not what citizens and their constituents want for the future.

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

Mr. President, I ask unanimous consent to speak as in morning business for 15 minutes.

Mr. President, change is very hard in this country and in this Chamber. Change is always hard. I was thinking, as we have been blocked from proceeding on the Wall Street reform bill, which is a very important issue, about what probably was the case on another big change at the turn of the last century, when Upton Sinclair wrote about the meatpacking houses in this country.

He wrote a book called ``The Jungle'' and described his visit to the meatpacking houses in Chicago and the unbelievably unsanitary conditions in those meatpacking houses--rats all around those meatpacking houses. But that was all right because they poisoned the rats. They took loaves of bread and soaked them in poison, laid them around and then there were dead rats and all the other things that existed in those meatpacking houses that went down the same chute, and out the back side came meat right to the grocery store and to the American people, an unsuspecting public--the most unsanitary conditions in the world.

As a result of publishing the book, ``The Jungle,'' there was a public outcry demanding that something be done. The Congress finally, at last, at long last, beat back the opposition of a very strong meatpacking industry and passed safe food laws, creating the Food and Drug Administration. Change is so very hard. But people knew then something had to be done about that, and the American people know now something has to be done about this.

It is interesting to hear people come to the floor of the Senate and say: Well, we are blocking a motion to proceed to go to a Wall Street reform bill because we want to make it better. Does anybody really believe that? They want to weaken it. They do not even want it in the first place, to the extent they can avoid it. That is why they didn't do anything in the committee. There were negotiations for weeks in the Banking Committee. I was not there, but I am told by all involved there were negotiations for weeks in the Banking Committee. Then they had a markup, and the Republicans didn't offer one suggestion.

If they have a whole backpack full of suggestions on how to improve the bill, why was there not one amendment offered in the committee? So now we have the spectacle of the desperate need for reforming Wall Street finance in this country and the entire Republican caucus in the Senate votes no--every single one of them.

Well, let me describe what we are facing, if I might. This economic collapse is not a stranger to most Americans. Somewhere around 15 or 16 million got out of bed this morning jobless, looking for work and can't find work. They understand the cost of this economic collapse.

Here is what it has cost the taxpayer. By the way, we don't have all these numbers. This was from an enterprising reporter at Bloomberg who did good work. But the Federal Reserve bailout commitment, $7.8 trillion; FDIC, $2 trillion; Treasury, $2.7 trillion; HUD, $300 billion--that is $12.8 trillion, think about that, the amount of money lent, spent or committed on behalf of the American taxpayer to try to get out of this deep hole.

Even as we found ourselves in this deep hole--here, by the way, is what has happened to the biggest financial institutions in the country. Going back 10 years ago, the Congress decided--in my judgment without any wisdom at all because I voted against it--to say let's homogenize all our big financial institutions. Congress said let's put them all in one big basket, investment banks, FDIC-insured banks, real estate, securities, throw them all into one big old holding company and things will be great. It will allow us to compete with the Europeans and others much better.

They created these giant houses of cards. This is what happened the largest financial institutions in the country got bigger and bigger. In fact, that is what has happened even during this collapse. Even in the greatest recession since the Great Depression they have continued to grow.

Let me again describe some of the origin of this, this cesspool of greed that has existed in recent years, resulting in one person--I have talked about him in the past--making $3.6 billion in just one year, betting against America, selling short.

By the way, if you are wondering, that is $300 million a month or, if this person's spouse asks: How are we doing, sweetheart, he can say we made $10 million a day every single day.

This is on the Internet right now and this is the origin of all this greed. It goes up from here, to a security, to a hedge fund, to an investment bank, and they are all making obscene profits right on up through the collapse. By the way, they are doing it again today. This is on the Internet. This is a company called EasyLoanForYou:

Get the loan you seek fast and hassle-free. Our lenders

will approve your loan immediately regardless of your credit

score or history.

You need a loan? It doesn't matter how bad your credit is. Here is one on the Internet. SpeedyBadCreditLoans. It says: Bad credit, no problem. No credit, no problem.

How about bankruptcy? That is not a problem either. Come to us, ``Get a guaranteed bad credit personal loan today.''

Yes, this is on the Internet today. Bad Credit Personal Loans, ``a Christian Faith Based Service.''

Previous bankruptcy? That is all right. No credit, bad credit, recent divorce, need more money? No problem.

This is the origin of what was going on in this country and it is still going on. By the way, you don't have to make interest payments or principal payments for the first 12 months, we will make them for you, and you don't have to document your income to us.

We wallpapered this country with this sort of nonsense, fundamentally ignorant banking practices, and then turned them into securities and sold them up, up, up the chain. The fact is, everybody was making big fees. The rating companies were with their pom-poms, approving everything with AAA. Meanwhile, they were creating an entire house of cards. Unbelievable.

Today, there is a hearing going on and one of the largest investment banks is under siege at that hearing because our friend, Senator Carl Levin, actually has the goods. He has the memos, the internal memos. He subpoenaed them. It shows that investment banking company is making record profits now but actually was betting against its customers, was actually selling short, betting against the American economy. So the question is, When all that was going sour and the American taxpayers were told these companies that are doing that are too big to fail, that we have a moral hazard here, we have systemic risk with grave consequences to this economy and therefore the American taxpayer has to be told you bail them out. The Federal Reserve, on behalf of the American taxpayer, decides we are going to provide unlimited funding and unlimited money and a new loan window for the first time in history to investment banks. Then we go to the Fed and say: How much did you actually put out there? And they say: You have no business knowing. We don't intend to tell you, and we don't intend to tell the American people. That is where we find ourselves right now. It is unbelievable.

There is an old country saying: The water is not going to clear up until you get the hogs out of the creek.

This issue we are trying to get to the floor of the Senate on a motion to proceed so we can actually do Wall Street reform is all about getting the hogs out of the creek. But we will vote again today at 4:30--I believe it is 4:30. We voted yesterday. We will vote, I suppose, tomorrow. Every single Republican has said we don't intend to even allow you to proceed because we want to strengthen the bill. Really? When two of the top Republicans go to Wall Street about 19 days ago to meet with two dozen Wall Street executives in a closed session and then come back and say we are going to stop Wall Street reform because we want to strengthen it--I don't think so. It doesn't sound to me like that is the case.

If you want to strengthen it, I say to my colleagues--you say it is not strong enough in too big to fail--I am going to be offering an amendment on ending too big to fail. But you can't offer an amendment unless you get the motion to proceed to get the bill on the floor. But I am wondering how many Republican votes I will get for an amendment that says if you are too big to fail, if you pose a moral hazard, systemic risk with grave consequences to our economy, it seems to me we should back you away through divestitures to a point where you are not causing that moral hazard, if that is the case.

Those who say they are trying to strengthen this bill--and I doubt it--I wonder if they will join me on that.

They come to the floor and say: We haven't had a chance to negotiate or discuss this, when, in fact, there were negotiations for months in the Senate Banking Committee, and before that there were hearings that went on for a year in the Senate Banking Committee. When they finally got to the point of writing the bill, the Republicans decided we don't have one suggestion for an amendment, not one, not any. Now they are saying: We are going to take a stand. We are not going to even allow the Senate to consider Wall Street reform because we think it needs to be improved. Oh, really? I think they think it is too strong. I think they have a lot of friends who want them to weaken it. That is my belief.

The question is, Will we be able to see, at some point, perhaps at long last, the other side stop making excuses and allow us to begin legislating? Is there any American who has suffered the consequences of this deep decline in our economy, the deepest decline since the Great Depression--is there any American who says: You know what. Hands off the big investment banks. Hands off the big finance companies. Yes, we know they were trading things we don't understand. They were trading things such as credit default swaps that were naked.

I asked the other day: How did that get naked? A credit default swap that is naked means it has no insurable interest in any case on either side. It is not investing, it is simply waging. I said before: Why pretend? Why not put a keno pit or a craps table in the lobby of those institutions because all it is, is making wagers or bets.

We have a couple of very large communities and many other areas of America where you can do that, Las Vegas and Atlantic City. But in the last decade, and especially with the growth of these unbelievably exotic instruments, we have seen that happening increasingly in the lobbies of some of America's biggest financial institutions because they have decided, if they bet and lose, at least the record is the American taxpayer going to be standing behind them to pick up the tab.

No more. The legislation brought to us by Senator Dodd and Senator Lincoln dealing with financial reform and derivatives is not perfect. Senator Dodd is on the floor. He would be the first to say that. But none of us can offer any amendments unless we have a motion to proceed to get to the bill. I think the work done by Senator Dodd and the Banking Committee is work that needs to be commended. It stretches my imagination, and I think others', for the excuse for voting against the motion to proceed to allow us to get to the floor on this and actually have a debate and offer amendments, to allow as an excuse that the other side truly wants to strengthen this.

You know what. We are going to get to the bill at some point, somehow, over the opposition of a determined minority that wants to protect Wall Street's interests here. Even as we are holding these hearings today and discovering some pretty pathetic behavior on behalf of some big economic players, we are going to get to this bill. When we do, we will see who is on the floor of the Senate on the side of the American people. We will see who truly wants Wall Street reform that does the right thing.

There are many things we need to do. Let me just say I mentioned too big to fail--I am going to introduce an amendment that bans naked credit default swaps that have no insurable interest. Again, that is betting, not investing. So there are a lot of things for us to do, but we cannot even begin to do that until we get a motion to proceed, and we would expect, perhaps even by accident, we would get one vote or perhaps two votes on the other side. We will see. Maybe this afternoon will be the time.

The American people deserve much better. As I said when I started, I know that change is hard and big change is exceedingly hard. But this is a big issue. This isn't some small potatoes. This is trillions and trillions of dollars. The American people lost $15 trillion in wealth when the economy hit rock bottom. So they require us, they demand of this Congress to take action--not to take action just for the sake of having done something but to take action for the sake of fixing this, to make sure this sort of nonsense and behavior cannot ever happen again in a way that threatens this country's economy.

I yield the floor.

Mr. President, I would like to announce that the Committee on Indian Affairs will meet on Thursday, April 29, 2010 at 2:15 p.m. in Room 628 of the Dirksen Senate Office Building to conduct a legislative hearing on the following bills:

S. 2802, A bill to settle land claims within the Fort Hall Reservation; S. 1264, A bill to require the Secretary of the Interior to assess the irrigation infrastructure of the Pine River Indian Irrigation Project in the State of Colorado and provide grants to, and enter into cooperative agreements with, the Southern Ute Indian Tribe to assess, repair, rehabilitate, or reconstruct existing infrastructure, and for other purposes; and S. 439, A bill to provide for and promote the economic development of Indian tribes by furnishing the necessary capital, financial services, and technical assistance to Indian-owned business enterprises, to stimulate the development of the private sector of Indian tribal economies, and for other purposes.

Those wishing additional information may contact the Indian Affairs Committee at 202-224-2251.

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