Floor Statements

Madam President, let me thank my colleague from the State of Washington. She has been tireless in trying to address these issues, both in legislation and on the floor of the Senate during debate, and it is so important.

I, too, voted against Mr. Bernanke's nomination today, and I wish to explain why. It is certainly not that I believe Mr. Bernanke is a bad guy. He is not. He is a well-respected economist. But I wish to talk a little about the issues that persuade me we need a change--a change in culture, a change in personnel--in some respects.

If ever there now is a bright line in America between those who are too big to fail and those who are too small to matter;--that is, the too big to fail are the biggest financial institutions in the country that have been making a lot of money, paying large bonuses, and living high off the hog. The too small to matter are the folks on Main Street who sink everything their family has into a business trying to run a grocery store, maybe a drugstore, a gas station, a barbershop, a restaurant, and then they discover they cannot make a go of it because things turn against them, and they are told: Do you know what. That was your risk. If you can't make a go of it, that is your problem. What you do is you lock the door, somebody sells the inventory, and you are out of business.

By contrast, the biggest financial institutions that were engaged in wholesale gambling--everything but the Keno tables and the craps tables and the blackjack tables in their lobby, everything but that; it was the same thing--and ran their company and their country into the ground, they were told: Well, do you know what. You are so big, we can't possibly let you fail, so we are going to give you a bailout. So that is the too big to fail versus the too small to matter. Is it any wonder people are furious in this country about that kind of assessment, that kind of value system?

Well, Mr. Bernanke is a nice guy. So is my Uncle Harold, by the way. Mr. Bernanke is an economist. My Uncle Harold is not. Mr. Bernanke has now been the Chair of the Fed for a while. Before that, he was part of the economics team in the previous administration that turned, by the way, a big budget surplus in the year 2000--the first budget surplus for the Federal Government in a long, long time. The new administration came in and turned that into the biggest deficits in history up until now. So I am not impressed with the whole scheme of a fiscal policy that turns the country from big budget surpluses to big budget deficits.

But with respect to the Federal Reserve Board itself, the Federal Reserve Board has had responsibilities. Those responsibilities, first by Alan Greenspan at the Fed--and by the way, while Alan Greenspan was at the Fed, Mr. Bernanke was at the Fed as well during part of that time, and now it has been Mr. Bernanke's tenure at the Fed--the responsibilities are to supervise the banks, to deal with predatory lending, to address some of the scandalous behavior of some of the brokers in the subprime market. Yet they did nothing. All of this went on under their noses. The question for me in dealing with Mr. Bernanke and others is, How many times do we have to learn the same lesson?

I have been here at a time when the savings and loans collapsed in this country. The S&L collapse--it was not surprising why they collapsed because we had a bunch of folks who used the savings and loan like a big piggy bank. They were parking junk bonds at the savings and loans organizations. The savings and loans were actually gathering deposits from around the country, and they were like Roman candles, just taking a small, little, sleepy savings and loan and turning it into a big institution with lots of deposits overnight. Then guys like Mr. Milken were parking junk bonds in the S&Ls, insured by the Federal Government; that is, the American taxpayers, and things collapsed, and it cost hundreds and hundreds of billions of dollars.

The most perverse result was the American taxpayer got stuck with junk bonds in the Taj Mahal Casino in Atlantic City. Think of that. How did that happen? Well, Donald Trump builds a casino, and whoever it is decides to take the junk bonds from the casino and park them in a savings and loan. The savings and loan is guaranteed by the American taxpayer. The savings and loan goes bankrupt. So the junk bonds in the savings and loan are now at the Resolution Trust Corporation, and the American people end up with junk bonds in a casino. Isn't that unbelievable? Do we have to learn that lesson again? Well, we did then.

We learned it a second time after the S&L collapse. We learned it with the Enron Corporation, which in part was a criminal enterprise. They were manipulating wholesale electric markets on the west coast-- schemes such as Get Shorty, Fat Boy, just to name a couple--and then having people, in addition to these schemes, shut off and turn on powerplants in order to manipulate supply so they could fleece taxpayers and fleece ratepayers on the west coast out of billions of dollars. It was one of the greatest robberies in the history of our country. I led the hearings. I chaired the hearings over in the Commerce Committee. Ken Lay came and raised his hand. We swore him in. He took the fifth amendment. He is now dead. But he was on his way to prison. Mr. Jeff Skilling from Enron Corporation came and just talked and talked and talked. It turns out none of it was accurate. He is now in prison.

So we had to learn a second time about the fleecing of America--the big S&L scandal that cost the American taxpayers an unbelievable amount of money; then the Enron scandal--a corporation that does not now exist that became, in part, as I said, a criminal enterprise; and now this financial house of cards that collapsed on this country. It is not surprising why it collapsed. What happened was we had some of the biggest financial entrepreneurs in this country--some of the biggest operators, I should call them, not entrepreneurs--some of the biggest financial operators in this country who were engaged in full-scale gambling with their company money, the biggest financial companies in this country.

My colleague talked about credit default swaps and CDOs and so on. We had synthetic derivatives. Do you know what synthetic derivatives are? At least a derivative is something you can reasonably explain because it has some value. It is connected to some value on each side of the trade. Synthetic derivatives are simply an artificial device that allows you to place a wager on whether something will happen, unrelated to value on either side of the trade. It is as if to say: Take the biggest investment banks in America and put a craps table in their lobbies and let them gamble from 8 a.m. until 5 p.m. and let the American taxpayer pay their losses. That is exactly what has happened.

Now, what is happening today? Well, this is Bloomberg News:

Wall Street is marketing derivatives last seen before

credit markets froze in 2007. . . .

Actually, I have it on a bigger chart here.

Wall Street is [now back] marketing derivatives last seen

before credit markets froze in 2007, as the record bond rally

prompts investors to take more risks to boost returns.

Bank of America Corp. and Morgan Stanley are encouraging

clients to buy swaps

that pay higher yields for speculating on the extent of

losses in corporate defaults.

And again:

Banks Reviving Synthetic Bets as [Paul] Volcker Blasts

Default Swaps.

Bloomberg. So here we are. The financial system collapsed, steered this economy right into a ditch. Millions and millions of Americans lost their jobs, lost their homes, lost hope, and are still struggling. The biggest interests got bailed out and made whole and now are making record profits again and are prepared to pay $140 billion, I am told, in bonuses. And now we see they are back to trading synthetic derivatives--the very same firms.

How often do we have to learn this lesson--once, twice, three times, or ten times--before the Congress will decide: No more of it.

My point is, just like with kids, you say: Do you know what. You better hope your kids are running around in a good crowd. That is the success, isn't it, having them run around in a good crowd as opposed to a bad crowd? As I take a look at all these nominations and appointments, the question for me is, What kind of crowd do they run around in? And do you know what. There is a kind of insular crowd that all comes from the same locations, and they all believe the same thing, and the fact is none of them have the stomach or the interest or the courage to decide to shut down what is essentially gambling on Wall Street and firms that are too big to fail, which means it is no-fault capitalism and the American people will pay the consequences. None of them have the courage to do that. In fact, they have now been given a year to organize to try to stop anything that is done here in the U.S. Congress.

I will say once again, it was 10 years ago when I stood on the floor of the U.S. Senate and was one of eight Senators to vote against the piece of legislation that created these big holding companies--the Financial Services Modernization Act, it was called--to repeal the protections that were put in place after the Great Depression.

I said, 10 years ago, I think that is going to set this country up for massive taxpayer bailouts. No, I do not have a crystal ball, and I do not necessarily prognosticate very well. But I knew that if we allowed those who wanted to do one-stop financial shopping--putting together securities with banking, investment banking with FDIC-insured banking--we were headed directly toward a cliff. And 10 years later, it is the biggest financial scandal in the history of this country, and this economy barely survived it. The American people lost $15 trillion in value as a result of this economic collapse--$15 trillion.

So who is accountable? Well, there have never been the kinds of hearings I think there should have been developing a master narrative of what happened and who was responsible and who was accountable and where the buck ought to stop. But we know some of it. We know who had some responsibility: the Federal Reserve Board.

Mr. Greenspan has since come to Congress and apologized because he said he was mistaken. He thought self-regulation would be just fine. Well, that is not why we have regulators. We have regulators because we know self-regulation does not work. The free market system is wonderful, but you need effective regulators who take a look at what is going on and call the fouls and blow the whistle when they see the fouls.

We went through a period where it was, ``Katy, bar the door,'' do anything you like, and that is what happened. The big banks took leverage from 10 times capital to 30 times capital. They began selling derivatives and credit default swaps and, pretty soon, synthetic derivatives, which were just instruments of gaming, and nobody seemed to care.

At the same time, in another area of financial enterprise, we began to see the development of this new, aggressive orgy in mortgage scams to say to people: If you can't afford to buy a home, we have a mortgage for you. If you have bad credit, we have a mortgage for you. If you have been bankrupt--slow pay, no pay--come to us; we will help you buy a home. By the way, everybody was getting big fees. They wrapped it into a security, sold the security from the mortgage bank to a hedge fund, to an investment bank, and everybody knew better. Pretty soon, the whole thing collapsed, and the American people were told: Now you pay the cost. You pay the cost to clean up this mess.

Well, at every step along the way, the Federal Reserve Board had a responsibility. Bad behavior by brokers, bad behavior by mortgage banks--they had a responsibility to oversee those things. And today we read that synthetic derivatives are now being pushed by Bank of America and Morgan Stanley. So what is the Federal Reserve Board doing about that? What about that buildup of additional bubbles of risk? Does anybody care? Is there anybody who is going to do anything about that?

Mr. Bernanke is a good guy, but the fact is, he is part of the crowd that I think helped cause these problems. I think--and I have said candidly--during the darkest period, where there was the question of whether this economy would completely collapse, Mr. Bernanke made some fine decisions. I do not think he is a bad person at all. But I do not think he--by the way, this would apply to some others in areas of responsibility--I do not think he comes from the culture to say that this whole set of activities has to change and change now and change aggressively.

Let me complete my thought by simply saying that I understand how important banking is. I understand how important investment banking is. I understand the financing system of our country is important and needs to be strong. I am not suggesting that somehow you can finance all the things we want to do in our country out of somebody's garage. That is not my point. My point is, however, there is the right way and the wrong way to construct a system of financing.

We have, over 200 years, seen this back-and-forth between those who produce and those who finance production. Sometimes one has the edge in terms of strength and power, and sometimes the other does. In the last 20 or 30 years, in my judgment, those who finance production have really been pulling the strings in this country as opposed to those who produce. That is why we have fewer good jobs in this country, and it is why we see more and more of the profits and more and more of the gross incomes that swell the paychecks of a lot of people at the top coming from investment banking and some of the biggest financial firms in the country. I do not think that is healthy for the country, as a matter of fact.

So I voted against Mr. Bernanke. I voted for cloture because I am not somebody who wanted to prevent a vote on it. But I did decide long ago that I was not going to be supportive.

Let me make one final point. That is this: Mr. Bernanke, during the height of the crisis, opened, for the first time in history, the Federal Reserve Board to give direct loans to investment banks-- the first time ever they have given direct loans to commercial banks but never before to investment banks. He opened the window to say we are going to give direct loans to investment banks. My guess is trillions of dollars went out in direct loans. In my judgment, the American people and the Congress have a responsibility to know who got those loans, how much, and what were the terms. We have written to the Chairman of the Federal Reserve Board--myself, Senator Grassley, and eight others--to say: You now have a responsibility to tell us who got that money and what were the terms. His answer to us was: I have no intention of telling you.

That is not acceptable to me and should not be acceptable to the Congress or to the American people, and that is another reason that I would not advance this nomination.

Madam President, I yield the floor, and I make a point of order that a quorum is not present.

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

Mr. President, this weekend there was some discussion and writing in the papers and elsewhere in journals about the nomination of Mr. Bernanke, the Chairman of the Federal Reserve Board, for another term as chair on that Board. The Washington Post had an editorial entitled ``Scapegoat at the Fed.'' I don't normally come to the floor of the Senate to respond to the Washington Post editorials, but I do wish to respond to a portion of this editorial, and then in a broader way describe why I think this is an important moment for the Senate.

``Scapegoat at the Fed.'' The editorial begins:

There are many ways to interpret the election results in

Massachusetts last week . . . But one thing Massachusetts did

not represent was a mandate to make a national scapegoat out

of Ben Bernanke, the Federal Reserve Board chairman.

Yet two Democratic Senators seeking reelection in November

. . . plus another planning to retire . . . appear to read it

that way. They took the occasion of last week's political

upheaval to announce their opposition to another four-year

term for Mr. Bernanke, whose current one expires January 31.

These senators' attempt to burnish their populist credentials

by making Mr. Bernanke the fall guy for all the sins, real

and perceived, of Wall Street fuels the right-left anti-Fed

chorus in Congress that has already produced troubling

attempts to subject the Fed to intrusive and

counterproductive audits of its monetary policy.

Well, that is a partial recitation of the editorial.

I can just condense the editorial by saying the editorial board at the Washington Post, as is always the case, has taken the position that if anybody wants to know anything about what the Federal Reserve Board is doing, it is none of their business. It is none of Congress's business; it is none of the American people's business. Stay out of it. Keep your nose out of the Federal Reserve Board. That is kind of the position of the Washington Post.

It is not since the Massachusetts election, however, that I have expressed reservations about the Federal Reserve Board. In fact, on six occasions I have given speeches on the floor of the Senate just since December 10, 2008. That day, plus on five additional occasions, I came to the floor to talk about the issues that persuaded me to say, as I did last week, that I don't even believe we should vote on Mr. Bernanke's nomination until he has decided to provide the Senate and the American people with information that he is now withholding. Let me describe what that is.

This is a Bloomberg report. It says:

The U.S. has lent, spent, or guaranteed $11.6 trillion to

bolster banks and to fight the longest recession in 70 years.

I have not come to the floor of the Senate critical of the Fed's policies by which they have lent, spent, or guaranteed $11.6 trillion; although it is fair to say the $11.6 trillion is not theirs. That represents the risks of the American people. That is the full faith and credit of this great country of ours.

The Federal Reserve Board has taken a number of actions to try to address this economic crisis. However, I would

suggest this economic crisis was caused, at least in significant part, by the malfeasance of the Federal Reserve Board and its previous Chairman, and, in some respects, this Chairman, who were content to take a long slumber, a very long nap, while the predatory lending was going on, the housing bubble was growing, and a massive amount of bad securities were finding their way--along with the payment of a lot of generous bonuses and fees--into the financial background of a lot of financial institutions in this country.

It says:

The Federal last year began extending credit directly to

companies that aren't banks for the first time since it was

created in 1913 . . . it has refused to divulge the details

about the companies participating in the 10 lending programs.

For the first time in the history of this country, during this response to the economic crisis, the Federal Reserve Board did this, which previously has only lent money directly to FDIC-insured commercial banks. That is the only group of interests that can come to the Fed and get direct money from them. For the first time in history, the Fed said, during this crisis, we will open that window to allow investment banks to come and get money directly from us.

So I began coming to the floor of the Senate, and I didn't come criticizing the Fed at that point because I don't know if what they did was necessary, but they did it. I wasn't critical. We were in the middle of a crisis. Then I began coming to the floor and saying: All right. Now that we have some amount of stability, let's at least make certain the Federal Reserve Board tells the American people who got the money, who ended up with the money, and what were the terms of its being made available to these investment banks.

Well, a Federal court, as a result of a FOIA request and a lawsuit said this, and it was reported in Bloomberg:

The Federal Reserve must, for the first time, identify the

companies in its emergency lending programs after losing a

Freedom of Information Act lawsuit.

The judge said the central bank improperly withheld agency

records. He said you have to disclose who got the money.

The Federal Reserve Board said we are going to appeal the judge's ruling. We don't intend to comply with that. We are going to appeal it and get a stay. The Federal Reserve is refusing to identify the recipients of almost $2 trillion in emergency loans from the American taxpayers or the troubled assets the central bank is accepting as collateral.

The Federal court says you have to do it, and they appealed the court ruling and got a stay and they are saying we don't intend to do it. In the meantime, I and Senator Grassley authored a letter with eight of our colleagues to the Federal Reserve Board last July and said: We want you to disclose to the Congress and the American people who got the money and how much and what the terms were.

We got a letter back from the Federal Reserve Board, dated September 16. It has a lot of paragraphs in it, but you can summarize it this way: No.

It is interesting to me that the Chairman of the Federal Reserve Board has said: We believe one of the hallmarks of what we are doing is transparency. I don't understand, if transparency means you are going to disclose things and give people the opportunity to understand what happened, why is there no transparency? Even after a Federal court said you improperly withheld records, even after Members of the Senate said make this information available, even after the American people said we deserve to know who got our money, the Federal Reserve Board said: We don't intend to tell you a thing.

There are a couple trillion dollars out there that the Fed has made available. It was a risk to the American taxpayer, and $2 trillion is not a small amount; it is a very large amount. The Fed said: That is our business, not yours. That is the business of the Federal Reserve Board. We, in effect, have a right to operate in secret and we intend to continue to do that.

My problem with Mr. Bernanke--as I have said last week, I don't think his nomination should be voted on in the Senate until and unless he discloses to us and the American people the details about this $2 trillion and who got it. What were the terms? We now see some of the investment banks reporting the largest profits in their history, and they are preparing now to provide bonuses, we are told, of $120 billion to $140 billion. These are firms, by the way, that would no longer exist were it not for the Federal Government. These are firms perched on the edge of a financial cliff, ready to go under, except for the guarantee of the Federal Government in all kinds of ways. Of course, they are the first to get well. No, it is not a company back on Main Street, not a company back in my hometown. The first to get well in this new economy are the investment banks.

Did they get well because they were able to get a couple trillion dollars from the Federal Reserve Board, probably at zero interest rate--I don't know--and invest back into Treasury securities and get paid interest on it? Were they arbitraging money? I don't know. I think we ought to know. We have a right to know.

Mr. President, the issue, from my standpoint especially, is, we have a right to know, and the chairman of the Federal Reserve Board has a responsibility to tell us and the American people. I noticed last weekend, when these writers, including editorial writers and others, were having an apoplectic seizure over this issue: Oh, My God, somebody might vote against Bernanke. Then they say: You know what. More than that being what they call Fed bashing--it is not--it is also the case that this Congress is thinking of tightening the rules on financial regulations to prevent those who were doing what they did to create this crisis from ever doing it again. Shame on them. That is antibusiness.

Isn't it interesting how this has morphed into a situation where, if we want to close the gate and create rules that prevent the kind of nonsense that happened from ever happening again, which drove this country into the ditch, somehow that is antibusiness. I don't think so. I think what is antibusiness is this notion of Alan Greenspan--and I will put up his quote--came to Congress after the fact, after the collapse, and he said:

I made a mistake in presuming that the self-interests of

organizations, specifically banks and others, were best

capable of protecting their own shareholders and their own

equity in the firms.

His point was, we don't need to regulate or oversee anything. Self- regulation will work best. They will be fine. Leave them alone and they will come home. What an unbelievable, tragic mistake by the Chairman of the Federal Reserve Board.

I made a mistake in presuming that the self-interests . . .

were best capable--

It is a suggestion that somehow capitalism works and you don't need any regulatory oversight at all because the free market is best left to its own devices. The free market is the best allocator of goods and services I know of by far, and I support the free market. I also understand that, such as in any other area of competition, you need a referee, somebody with a striped shirt who blows the whistle when there is a foul. There are plenty of fouls in the free market system. That is why you need a referee. You need regulation. That is not a 4-letter word. It is called regulation. You need effective regulation to make sure the free market system works the way it was supposed to work.

There are a lot of interests in this free market system that want to clog the arteries of the free market and cause some sort of substantial problem in the free market, as long as it exists in their self- interests to do so. There are plenty of interests wanting to do it. That is why effective regulation is important. I am not talking about overregulation or underregulation; I am talking about effective regulation that is anticipated and which, for about 8 years, took a vacation by the hiring of regulators who actually boasted they were going to be willfully blind and say: You all do what you want to do in this system because we will not look.

I brought, again--and I know it is repeating--some of the things nobody looked at. The biggest mortgage company in the country that helped set up the subprime scandal that fed itself into the balance sheets of banks--commercial banks and investment banks--and caused a massive collapse and about $15 trillion of lost value to the American people. We all have seen Countrywide's advertisements:

Do you have less than perfect credit? Do you have late

mortgage payments? Have you been denied by other lenders?

Call us. . . .

That is unbelievable. You may think: How on Earth can that be a business model? They were advertising to say: Are you a bad credit risk? We want to do business with you. If you have missed payments or been bankrupt, come see us.

This is Zoom Credit. Here is their advertisement. We saw these on television and heard them on the radio and saw them in newspapers. We thought: How did this work? They said this:

Credit approval is just seconds away. Get on the fast track

at Zoom Credit. At the speed of light, Zoom Credit will

preapprove you for a car loan, a home loan, or a credit card.

Even if your credit's in the tank. Zoom Credit's like money

in the bank. Zoom Credit specializes in credit repair and

debt consolidation, too. Bankruptcy, slow credit, no credit--

who cares?

Can you imagine that? This is an advertisement from a mortgage company saying if you have been bankrupt or have slow or no credit, who cares.

Finally, this is Millennia Mortgage:

12 months, no mortgage payment. That's right. We will give

you the money to make your first 12 payments if you call

within the next 2 days. We pay it for you. Our loan program

may reduce your current monthly payments by 50 percent and

allow you no payments for the first 12 months.

We saw all these things as they were creating the rot at the bottom of this system from which the house of cards collapsed. By the way, all this put mortgages out there in the country and the result was those mortgages were wrapped into securities and those securities were then sold from mortgage companies to hedge funds and investment banks, selling the risk north so they didn't have the risk anymore. There is no underwriting at the bottom because you don't have to underwrite if you sell the risk ahead.

Then we saw the spectacle of very large commercial banks with their financial belly loaded with this rot--CDOs, credit default swaps, you name it. There were securities rated AAA that were worthless. Then we all stood around scratching our heads wondering: How did this happen? It was unbelievable, unprecedented greed. A lot of people at the top made massive amounts of money. The guy who ran Countrywide got away with about $200 million, I believe. That is now under investigation. A lot of them got away with a lot of money. Then this country and the American people got stuck with about a $15 trillion bill and an economy that has been limping ever since.

One asks the questions: Is it Fed bashing? Is it antibusiness? Is it Fed bashing to say the Fed owes the American people information about who got the $2 trillion and what the terms were? Is it antibusiness for those of us who are trying to put together rules and regulations that say this cannot happen again, we will not allow that?

I wish to close with one additional quote. This one is from me. It was almost 10\1/2\ years ago on the floor of the Senate when we passed legislation at the request of all those big financial institutions, the investment banks, you name it. They wanted to strip away protections that were put into place after the Great Depression, saying it was old- fashioned; let's compete with the Japanese and Asians and others in commercial finance--one-stop financial service centers, create big holding companies and put it together, commercial and investment and securities, all in one big tub and put up firewalls and we guarantee you will never be hurt and we will be able to better compete.

On the floor of the Senate I said this:

This bill will, in my judgment, raise the likelihood of

future massive taxpayer bailouts. It will fuel the

consolidation and mergers in the banking and financial

services industry at the expense of customers and others.

It certainly did that. For those of us who decide: You know what, let's begin to put some of these pieces back together, let's begin to provide some protection for this country's economy, let's get rid of this orgy of speculation, that unbelievable greed, this bubble of incompetence of people who were supposed to be regulating but didn't-- yes, that includes the Federal Reserve Board. Let's do this right and put it back together. That is not antibusiness; that is probusiness. The businesspeople in this country who go to work in the morning and put a key in the door and open are going to work all day, risking everything they have. They want an economy that is working, not in collapse but one that is providing opportunity. That certainly cannot happen, and it doesn't happen, when you allow this kind of unbelievable speculation and the rancid behavior and the things that happened at the bottom with the predatory lending and exotic things such as CDOs and credit default swaps, so complicated that those on both ends of them, in many cases, didn't understand them. Will Rogers once described, a long time ago, people who bought things they will never get from people who never had them and both smiled because both made money.

That is the sort of thing that was going on in this country, and that does not work. The real economic health and the real wealth of this country is what we produce, not trading paper and especially not trading paper as a matter of speculation to try to build the bubbles we saw in the last decade or so.

We have a lot to do to fix what is wrong. I say to those who wrote the Washington Post editorial, the smallest amount of effort could have avoided that mistake in terms of the six speeches I have given on the floor of the Senate on this subject. This is not a revelation since the Massachusetts election. I have been coming to the Senate floor for a long time to talk about these problems.

Let me finally say, I think as we move from here to the issue of financial reform, aside from the Bernanke nomination, the question is: Are we going to do that right? Are we going to allow the kind of pressures that have built on the outside to influence what we do?

We should certainly know by now that if you are too big to fail in the financial industry, then you are too big and we ought to do something about it. We ought to know by now that putting together commercial banks that are insured by the taxpayers with investment banks is a recipe for disaster, and there is a way to separate them. That ought to be our business as we turn to financial reform in the years ahead.

I yield the floor.

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

Mr. President, yesterday President Obama made some recommendations that have caused quite a stir, especially on the morning shows on television today. The President suggested something that is called radical by some of the commentators: he suggested that banks--commercial banks, FDIC-insured banks, insured by the American taxpayers--should not be essentially gambling or investing in risky instruments, risky securities on their own proprietary accounts. It has been going on for a long time. This President said let's stop that. We have seen such a financial wreck, in which our economy was steered right into the ditch, where something like $15 trillion of value had been lost by American households.

The President said we need to make some fundamental changes. One change, which isn't even, in my judgment, a significant change--at least not in the context of what must be done and should be done--is to limit the ability of FDIC-insured financial institutions to invest in, speculate in, and buy and trade derivatives on their own proprietary accounts. That should not have been going on at all.

Fifteen years ago, I wrote the cover story for the Washington Monthly magazine on this very subject. The title of the article was ``Very Risky Business.'' I talked then about how FDIC-insured banks in this country were trading on their own proprietary accounts in derivatives-- $16 trillion of value in derivatives at that time. They were trading on their own proprietary accounts, which puts taxpayers at risk. They might as well put a Keno table or a craps table in their lobby. It is flatout gambling. The President said yesterday: Let's have legislation that stops that. I agree.

The President said something else that is very important: Let's limit the size of financial organizations that are ``too big to fail.'' We have a category in this capitalistic system of ours called ``too big to fail''--a category that is managed by the Federal Reserve Board. They have a list of which institutions are too big to fail. I thought this system of ours--capitalism--is that you succeed or fail based on your own merit. That is not the case. We have now witnessed in the last year and a half which institutions are not allowed to fail.

We have people who go to work every day to a business they started with their own capital. They and their family have invested in a shoe store or a hardware store or gas station, and they open the door in the morning and they are open for business that day and the risk is all theirs. By the way, they are allowed to fail, and many have done so during this economic downturn, but not the biggest financial interests--they are too big to fail. That is called no-fault capitalism. They can gamble in their lobby, and the American taxpayer will pay the bill. That is what has been going on. This President says--and he is right--if you are too big to fail, you are too big. Let's begin limiting the size.

This morning, I listened to some of the commentators have an apoplectic seizure. They said that if we cannot be bigger and bigger, how do we compete with the Europeans? That is exactly what we heard 10\1/2\ years ago now--when the Congress passed legislation that took apart the protections put into place after the Great Depression. This legislation gave free rein to this unbelievable orgy of speculation in high finance that led this country right into the ditch, led this country's economy into a colossal wreck. The result of all of that has been catastrophic for the American people. The result of all of that has been trillions of dollars of lost value for American families and an unbelievable unemployment problem--people by the millions losing their jobs, their homes, and losing hope.

The President made two recommendations yesterday, which I support. You would think he was suggesting somehow that he is going to completely take apart the American free enterprise system. That is absolutely absurd. I decided I wanted to give a little bit of history this morning because it is so easy for people to forget. Let's understand how we got to this place and what caused these recommendations to be made.

Alan Greenspan, former Chairman of the Federal Reserve Board, was involved in all of this. I know he wrote a book later implying he was exploring the surface of the Moon while all this was going on, but he wasn't. He was Chairman of the Federal Reserve Board. He had a responsibility to provide oversight and to rein in these excesses, and he didn't. Here is what he said in testimony before the Congress:

I made a mistake in presuming that the self-interests of

organizations, specifically banks and others, were best

capable of protecting their own shareholders and their equity

in the firms.

That notion that people will behave in their own self-interests and protect the shareholders and our country was pretty unbelievable because this occurred at the same time that the Chairman of the Federal Reserve Board and the Federal Reserve Board itself had responsibilities to provide a regulatory oversight to what was going on in our financial system.

At the same time that was the case, and they were doing nothing, we had new people come to Washington, DC, in the aftermath of the passage of the disastrous bill in 1999, the Financial Services Modernization Act, to be regulators at the Securities and Exchange

Commission, the CFTC--all of those organizations. People came here to assume those jobs, and they were boasting that they would be willfully blind: Let's take these regulatory jobs, and we promise not to look, we promise to close our eyes, and by the way, we are business friendly, so do what you want. It doesn't matter to us.

In fact, we have circumstances where people came to the Securities and Exchange Commission with Mr. Madoff's issue going on, and they said: This guy is running a Ponzi scheme, a scam. We had people show up to the SEC and say: Investigate this, it is a massive scam. The SEC couldn't even investigate it when they had people saying, here is what is happening. It is unbelievable. During that entire time period, we had regulators, starting with the Federal Reserve Board and Mr. Greenspan and others, in regulatory capacities who boasted about not being willing to regulate. The result is that big financial firms in this country, and a lot of others, were engaged in an unbelievable orgy of greed.

Let me show a little of what was going on. The Fed should have been attentive to this. It was their responsibility, among others. We all see these kinds of ads when we wake up and brush our teeth in the morning if we have a television set on. Here is one where Countrywide Mortgage said:

Do you have less than perfect credit? Do you have late

mortgage payments? Have you ever been denied by other

lenders? Call us. We would like to loan you money. If you are

a bad credit risk, call us.

How can that work? It didn't work. This company went bankrupt. The owner of the company is now under investigation, at long last. He went away with about $200 million, I believe. He left the party with a couple hundred million dollars. These advertisements saying: If you have bad credit, come to us--this is the biggest mortgage company, not some fly-by-night company.

This one is an Internet company. It is called speedybadcreditloans.com. Isn't that great? What a country. What a system. Apparently, somebody has a business model to advertise speedy bad credit loans. It says:

Bad credit, no problem. No credit, no problem. Bankruptcy,

no problem. Get guaranteed bad credit personal loans now.

Does it surprise anybody, having watched over a decade of this, that this collapses?

I won't go through all of them.

Here is Millennium Mortgage:

Twelve months, no mortgage payments. That's right. We will

give you the money to make your first 12 payments if you call

in the next 7 days. We pay it for you. Our loan program may

reduce your current monthly payment by as much as 50 percent

and allow you no payments for the first 12 months. Call us

today.

Too good to be true? Get a loan from these guys and they will make the payment for you. They didn't tell you that they will put that around the back side of the loan and wrap it around higher interest rates.

This is Zoom Credit:

Credit approval is seconds away. Get on the fast track at

Zoom Credit. At the speed of light, Zoom Credit will

preapprove you for a car loan, home loan, or a credit card,

even if your credit is in the tank. Zoom Credit is like money

in the bank. Zoom Credit specializes in credit repair and

debt consolidation, too. Bankruptcy, slow credit, no credit,

who cares?

We have all heard these for a long period of time and wondered: How does this work? What kind of business model is this? It was not a business model. It was a scam and a scheme that undermined the American economy and went on under the nose of, yes, Mr. Greenspan and so many others who had promised us they were interested in being regulators. The list goes on and on.

Let me go back to 1999. We were told in this Chamber--and I was here then--we were told: America has to modernize its financial system, for if we do not, the Europeans and others are going to win this debate and win the economic competition. So we have to modernize. The things that were put in place after the Great Depression were probably important at some point but no longer necessary. We now have Mr. Greenspan protecting us and others. It is a sophisticated system. We need to be able to compete.

They said: We need to have a financial modernization system to allow very large holding companies to put together all the financial systems--investment banks, commercial banks, real estate, and securities operations. By the way, if we can do all that, we can create one-stop financial shopping for the American people.

I stood on the floor of the Senate at great length in 1999 and opposed this. I know it is a little cheesy probably to quote yourself, but I do want to provide some description of what concerned me prior to the passage of this legislation.

Here are some of the things I said at that point. I said:

I will bet one day somebody is going to look back at this

and they are going to say: How on Earth could we have thought

it made sense to allow the banking industry to concentrate,

through merger and acquisition, to become bigger and bigger

and bigger, far more firms in the category of too big to

fail? How did we think that was going to help this country?

That was May 6, 1999.

The same day I said:

I say to the people who own banks: If you want to gamble,

go to Las Vegas. If you want to trade in derivatives, God

bless you. Do it with your own money. Do not do it through

deposits that are guaranteed by the American people and by

deposit insurance.

The same day I said:

This bill--

The Financial Services Modernization Act--

will, in my judgment, raise the likelihood of future massive

taxpayer bailouts. It will fuel the consolidation and mergers

in the bank and financial services industry at the expense of

customers, farm businesses, family farmers, and others.

I said:

I think it is a fundamental mistake to decide to repeal

Glass-Steagall and allow banks and all of their financial

industries to merge into a smorgasbord of financial services.

Those who were around to vote to bail out the failed savings

and loan industry, $500 billion of taxpayers' money, are they

going to want to be around 10, 15 years from now when we see

bailouts of hedge funds putting banks at risk? Or how about

banks not just bailing out hedge funds, but banks having

ownership of hedge funds?

I said: We also have another doctrine at the Federal Reserve Board called too big to fail.

Remember that term ``too big to fail''? They cannot be

allowed to fail because the consequences to the economy are

catastrophic and therefore these banks are too big to fail.

That is no-fault capitalism. Does the Federal Reserve care

about that? Apparently not.

Fusing together the idea of banks which requires not just

safety and soundness to be successful but the perception of

safety and soundness with other inherently risky speculative

activity is, in my judgment, unwise.

Finally--these are about four or five speeches I gave in 1999:

We will, in 10 years' time, look back and say: We should

not have done that because we forgot the lessons of the past.

So here we are, trillions and trillions of dollars. There have been, we believe, $11 trillion or so lent, spent or committed by the Federal Government to try to keep afloat some of the largest financial firms in our country because they did what they wanted to do. They engaged in unbelievable amounts of risk.

I showed the examples of advertising to people who come to get mortgages when they had bad credit. That was not just people who had bad credit. People who had existing loans were enticed by these companies that said: Are you paying 7 percent or 8 or 9 percent interest? Come to us. We want to give you a loan in which you do not have to pay the first 12 months. Come to us. We are going to give you what we call a no-doc loan. You do not even have to document your income to us. Come to us. We will give you a liar's loan. They did not call it a liar's loan, but that is a no-doc loan. Come to us. We will give you a loan where you do not pay any of the interest. We will give a loan where you do not pay any of the interest or any of the principal. All these were entreaties to people to come to these companies and redo their mortgages.

What happened to these mortgages when they were put together? They wrapped them into a security, a mortgage security, and then the mortgage company, Countrywide, for example, would sell it. They would sell it perhaps to a hedge fund or an investment bank. It was rated as a security. By the way, most of them were rated triple A. The ones that went bad were rated triple A.

What happened was those who placed the mortgages no longer had the risk because they sold the risk to others. They sold it to hedge funds, investment banks. All the brokers making money,

the people putting out the mortgages at the bottom, they were making $5,000, $10,000, $25,000 in bonuses, brokers' fees. The mortgage companies were awash in cash.

I mentioned Countrywide's CEO left with a couple hundred million dollars, now under investigation, by the way. The hedge funds were making massive amounts of money. They could not count it fast enough. Just before the economy collapsed, the highest earner in the country was a hedge fund manager who earned $3.6 billion--$3.6 billion. Think about that person coming home from work and the spouse says: How are you doing? I am doing pretty well; $300 million a month. By the way, I am only paying 15 percent income tax because I get a special deal. I pay a 15-percent rate. Nobody else does. I get to pay some of the lowest income tax rates in America. These folks do because they have a deal called carried interest. They were all making money, all awash in cash, giant bonuses, bonuses that were unreal--$15 million, $20 million a year, some of the folks who were running the security agencies, some of the salespeople, and others in these investment banks.

By the way, all these institutions would have collapsed and failed. Even the ones that this morning are reporting record profits, they were about to collapse were it not for the American people who, through their government, saved them.

Now they are willing to complain about everything, and they are ramping up a huge effort in this town to prevent any effort to change the way things were. This President has said: Let's decide, at least, to stop the pernicious practice of having FDIC-insured banks trading in derivatives and other risky instruments on their own proprietary accounts. I think that is nuts to allow that to continue, and this President is right to try to stop it. They are even now gathering an army to try to oppose it.

This issue of too big to fail, the President is right about that, absolutely right.

This shows the house of cards. We have all seen it. We saw it collapsed or nearly collapsed. Were it not for the Congress, the President, the American people in backstopping these largest investment banks, they would be gone. Now, all of a sudden, they are reporting record profits and are on the edge and verge of providing record bonuses at a time when a whole lot of folks are in lines trying to get to a soup kitchen or in lines trying to find a job.

The President of the Dallas Federal Reserve Board, in an editorial review in the Dallas Morning News, said:

Too bill to fail is not a policy. It's a problem. Too big

to fail means too big.

I am glad he said that. I say that. I am glad he said that. He is president of the Dallas Federal Reserve Board.

Joseph Stiglitz--I believe he was a Nobel Prize winner--said:

We have much to gain by breaking up these behemoths.

Talking about the large financial institutions.

We need to begin now the admittedly gargantuan task of

breaking out their commingled activities.

There has been discussion in the last couple days about Paul Volcker, former Federal Reserve Board Chairman. I had an opportunity to meet with him in the last several weeks. Paul Volcker has spoken very strongly in support of the policy the President has now embraced. Paul Volcker says:

I would exclude from commercial banking institutions

ownership or sponsorship of hedge funds and private equity

funds. So should, in my view, a heavy volume of proprietary

trading with its inherent risks.

It is common sense for us to begin to shut down those kinds of activities.

Let me quickly say, I understand the need for financial institutions. I understand that. It is a very important part of this country's economy. But I also understand, having studied economics and taught economics ever so briefly, that we have in this country, for 200 years, had a contest about who rules the roost--those who produce or those who finance production. I am telling you, in recent decades, those who finance production have had an unbelievable amount of influence in this country. I must say I do not think it contributes one thing to this country's economy to have big financial institutions trading synthetic derivatives.

Does anyone know what a synthetic derivative is? A derivative is something that derives value from something else. Presumably, whatever the value on the front end or something elsewhere has some value, something that is tangible. A synthetic derivative is wagering, gambling, a derivative that is created with nothing on either side of it, except you are making a wager or a bet. That is going on in this country with respect to big financial institutions. It has in the past, aggressively. That is where they made a lot of money. It continues to go on to this day, and it makes no sense.

Does anybody think that contributes very much to this economy? It does not. The fact is, it darn near ruined this economy with that unbelievable amount of speculation, starting right down at the broker placing loans that should not have been placed that created the subprime scandal and all the way up with credit default swaps and CDOs and synthetic derivatives and all these issues.

A former colleague once described investment banks by saying investment banking is to productive enterprise like mud wrestling is to the performing arts. I do not put it quite that way. But his point was a whole lot of what goes on is pretty worthless. A whole lot of what can go on and should go on is very important in investment banking. That is the part of our banking structure that provides loans in riskier categories. You put loans out there to businesses with ideas and so on. That is very important. Community banks are very important. Commercial FDIC-insured banks are important. Investment banks are important.

My point is not to suggest that our economy can exist without them. That is not the case. But I wish to make a very important point. You look at the heyday of production in this country. I am talking about when our manufacturing plants were humming, when we were turning products out, the best in the world. We were expanding the middle class. We were putting men and women in factories with good jobs that paid well, with benefits.

Look at that period of time in this country and ask yourself: Under what kind of conditions did that exist? It existed before all these changes were made to the financing system of this country that let the finance industries decide to coagulate and combine and create these behemoth organizations with so-called firewalls that turned out to be made of tissue paper.

People suggested somehow we were old-fashioned prior to 1999 and we needed to modernize to compete with somebody else to allow all our financial systems to come together, to merge, to get bigger, to engage in all these activities and create unbelievably exotic instruments, instruments that many of those who trade cannot even explain, thought that was somehow essential to the economic health of this country?

The economic health of this country was much better prior to the enactment of those changes. I did not vote for those changes I just described. I stood on the floor and fought like the devil against them. Eight of us in the Senate voted no on the Financial Services Modernization Act. Eight voted no. The fact is, it set this country up for an unbelievable fall.

So now here we are. The question is, What next? Where do we go from here? I understand, in this country, it is reasonable for every interest group to organize to support their vested interests. I understand that completely. But I also understand there is a higher purpose and a much larger issue for the American people and for our future.

What kind of future do we want? What kinds of activities, what kinds of things can we do to put our country back on track, to restart the economic engine, to put people back on payrolls once again? There is nothing we can do in this Chamber that is much more important, as far as I am concerned, than finding a way to create jobs to put people back to work. There is no social program that is as important as a good job that pays well and allows people to take care of their families. That is just a fact, and we have seen in this country how you expand the middle class--with good jobs that pay well.

I am going to speak later in this next couple of months again about the issue of trade. I have written a book about that subject, but I am going to speak at greater length about it because, in the middle of an economic downturn, when we talk about jobs, if we are hemorrhaging jobs once again outside of

this country in search of 50-cent-an-hour labor, and we have people lining up here looking for work, that doesn't work for me. That is a lot like filling a bathtub with the drain open. So there are a lot of things that are elements in this.

What I wanted to talk about this morning was to say that it is not a coincidence we have ended up at this intersection in deep financial trouble trying to find a way to see if we can rebuild the economy, to start putting people back to work again. It is not a surprise we have wound up here, anybody who watched what happened with the creation of bubbles and unbelievable speculation that was going on, and the massive amount of money ricocheting around and the creation of exotic financial instruments and no regulation at all, with people in regulatory authority who covered their eyes, and the head of the Fed, who actually was a cheerleader for all of it, who said: We don't need to regulate hedge funds or regulate derivatives. I oppose all of that. It isn't a surprise to us that this thing collapsed. It certainly isn't to me. The question is: How do we set it right?

This President--though I don't agree with him on everything-- inherited the biggest economic wreck since the Great Depression. That is a plain fact. Had he gone to sleep from January, when he was inaugurated, and done nothing until today, there was going to be a $1.3 trillion budget deficit. That is what he walked into the White House and assumed. It is not just this financial situation, this is most of it, but we went to war and decided not to pay for a penny of it. We sent young men and women to fight and die and risk their lives day after day after day in Iraq, Afghanistan, and elsewhere, and we decided we weren't going to pay for one penny of it.

Some of us in the Senate, by the way, said we ought to at least find a way to pay for some of this cost. We are going to send kids to fight and risk their lives, and we don't have the courage to begin to pay for it? We went 8 years and didn't pay for a penny. Every bit of it went to the debt. To those of us who said let's pay for some of it, the last President said: If you do, and you pass that bill, I will veto it. I don't intend to allow for that at all. So that is another part of this.

Look, this country knows better. The American people know better. That is not a policy that works.

I talked yesterday about the Chairman of the Federal Reserve Board, Mr. Bernanke. I did not speak ill of him, I mean, despite the fact I think he has some ownership of these issues as well. He was part of the economic team at the Federal Reserve Board as well. I indicated yesterday, and I just want to make the point, his nomination is coming up, and I indicated I was not going to vote in favor of the nomination. When he decided to open the lending window at the Federal Reserve Board for the first time in the history of our country to investment banks, I didn't criticize him for it. I wasn't sure whether it was necessary, but I didn't criticize. We were in the middle of a very difficult time. But when he decided to do that, he put the American taxpayers' funds at risk.

We waited, and I and a group of nine other Senators wrote him a letter about 6 months ago and said: All right. Now we want to understand who came to that window and how much money did they get and what were the terms. Who did you give the money to? Who has our money?

He wrote back to us and said: I don't intend to tell you that. I don't intend to tell the Congress, and I don't intend to tell the American people, despite the fact that he said transparency is a big issue for him. Apparently not on this issue.

So I don't think the Congress should proceed with his nomination until he tells us what was the consequence of opening the loan window at the Federal Reserve Board to investment banks for the first time in history.

Well, Mr. President, I see my colleague from Kansas is here and would like to speak, perhaps. This is a long and tortured discussion about this country, its finances, and its future. There is plenty of criticism to go around. I have had kind of a belly full of standing in the Senate and hearing about President Obama and socialism and that sort of thing. The fact is, as I said, he inherited the biggest mess since the Great Depression, and had he done nothing, the budget deficit was going to be $1.3 trillion. So he is trying to do some things that will set this country back on track.

We have gone through almost a lost decade in terms of smart, effective, good public policies that invest in this country's future. It has set us back a lot. What we need to do now, it seems to me, is to try to see if we can't find a way that what both political parties offer to this country can be brought together, to links arms and try to lift up this country.

We see almost every single day people sawing away and ratcheting away about what is wrong with the country. I can spend a lot of time talking about what is wrong with America. But there is a whole lot right about this country, and it deserves, in my judgment, a lot more cooperation than I have seen in the Senate. It deserves the best of what both political parties have to offer America rather than the worst of each. I hope in the next 6 or 8 months we can find ways to ask people of both political parties to decide to stand up for tough things--for things that are going to require some courage and that will restart this economic engine, put America back on track, and try to make certain what has happened to us in the last couple of years will never happen again.

Most importantly, we need to give people an understanding that their future can be better than the past. We need to restore confidence. It is hard for people to have confidence watching the proceedings in this Senate. I understand that. But confidence is everything. If people are confident about the future, they do the things that manifest that confidence and that expand this country's economy. That is just a fact. If they are not confident about the future, they do things that contract the economy--they defer and delay the kinds of things they would otherwise do to expand the economy.

I hope in the near future we can find a way to create some jobs initiatives to put people back to work more quickly. But there are just a lot of issues that confront us, and I wanted today especially to talk about the two things this President mentioned yesterday, both of which are so right and so important, both of which this town will organize to oppose.

The first is asking or deciding or telling FDIC-insured banks: You can't be investing and trading risky instruments on your own proprietary accounts and putting the American people at risk any longer. You can't do that anymore. That is not radical; it is right and it is long overdue. I wrote the first article about that 15 years ago as a cover story for the Washington monthly magazine titled ``Very Risky Business.''

Second is the issue of too big to fail. If anybody in this Chamber wonders whether we ought to do something about too big to fail, go to any town cafe in this country and sit around and ask folks whether they think this capitalistic system works well when you say to almost everybody else: You risk your savings to start a business, and if you don't make it, tough luck. You are on your own. But, by the way, we have some big financial interests that can make record profits, pay the highest bonuses in history, and we have decided they can't fail. We have a special class for them. We will open loan windows at the Fed, we will lend or make $11 trillion available to them if they need it. We will do anything to prevent them from failing because they are too big to fail.

That is no-fault capitalism. That is not what I believe to be the American way. That is something this President wants to change and something I support very strongly.

Mr. President, I yield the floor.

Mr. President, I would like to announce that the Committee on Indian Affairs will meet on Thursday, January 28, at 2:15 p.m. in Room 628 of the Dirksen Senate Office Building to conduct a hearing on the nomination of Lillian A. Sparks to be Commissioner of the Administration for Native Americans, U.S. Department of Health and Human Services, to be followed immediately by an oversight hearing entitled on ``Unemployment on Indian Reservations at 50 percent: the urgent need to create jobs in Indian Country.''

Those wishing additional information may contact the Indian Affairs Committee.

Mr. President, first let me say to my colleague, Senator Casey, his comments about the nearly unspeakable tragedy that has occurred in Haiti strike all of us in a very poignant way. I have been to Haiti. It is one of the poorest regions in the world. We have people in Haiti living in unbelievable poverty. Fly to the airport and near the airport is an area called City Soleil. It is a slum of nearly a half million people living in desperate conditions. The entire country of Haiti has suffered such immense difficulties for so long. The people of Haiti are wonderful people. To be visited now by this great tragedy with an unbelievable loss of life that will exceed 200,000 people is heartbreaking to me, and I know to all Americans who watch this tragedy play out on television as volunteers are digging through rubble and, in some cases, finding people still alive and, in most other cases, finding a lot of people who have lost their lives.

The American people are a people full of great generosity, and that expression of generosity in the form of contributions to organizations that are there helping these people is something that is very important. All of us can be proud of the generosity of this country and what is now happening in the outpouring of support.

Mr. President, I rise to briefly explain why I am going to vote against the nomination of Mr. Ben Bernanke as Chairman of the Federal Reserve Board. Mr. Bernanke has been serving as Chairman of the Federal Reserve Board. I will be the first to say I think there are things that Mr. Bernanke has done that are very important to this country. He steered our country in a very difficult circumstance. There was a time when our economy could have completely collapsed, which would have been devastating. It was teetering on the precipice of that. Mr. Bernanke and others made decisions, some of which I thought were good decisions.

It is the case that Mr. Bernanke worked for the previous administration that in many ways created circumstances that took us to that cliff or near the cliff with economic policies. I will talk about that for a moment. But when Mr. Bernanke became Chairman of the Fed, I understood that his background fit fairly well what we were going through, and I think he did some things that should be commended and supported. I have told him that I supported a number of these actions that were very important.

One of those actions was to open, for the first time in history, the window at the Federal Reserve Board to extend credit directly from the Federal Reserve Board to the biggest investment banks in the country. It has always been the case that FDIC-insured banks, commercial banks, would have a window at the Fed to go get direct loans from the Fed, but it has never been the case that the investment banks were able to do that. During this great crisis, Fed Chairman Bernanke and the Board of Governors opened that window for direct lending from the Federal Reserve Board to the investment banks.

I wasn't critical at that moment. I didn't come to the floor and express criticism. I don't know exactly what they saw that persuaded them to do that. But some months later, I sent, along with nine of my colleagues who signed the letter, a letter, dated July 31, to Chairman Bernanke and said: The Federal Reserve Board took action to allow all of the major investment banks in the United States to effectively access direct lending from the Federal Reserve Board for the first time in history.

Down in the letter I say: We now urge you to release the names of financial institutions that have received the emergency assistance and how much each has received. The American taxpayers' funds were put at risk, and we believe the American people deserve information about the Federal Reserve Board's bailout activities to determine how much and what kind of funds were used, and so on.

We received a letter back from the Chairman of the Fed in which he said: Publicly releasing the information on the names of borrowers and amounts borrowed under the Federal Reserve Board liquidity program could seriously undermine our liquidity programs. He essentially said: I don't intend to tell you, and I don't intend to tell the Congress or the American people.

It is interesting to me that a Federal judge last year ordered the Fed to release the names of the institutions that received the emergency financial assistance from the Federal Reserve Board and the amount of the assistance. A Federal judge said to the Fed: You must release that information to the American people. The judge in this case, which was an FOIA case, found that the Federal Reserve had ``improperly withheld agency records.'' The judge said that the Fed's argument that borrowers would be hurt if their names were released was ``conjecture without evidence of imminent harm.'' But the Fed went ahead to appeal the judge's ruling and, therefore, it has been stayed.

The American people are now in a situation where their Federal Reserve Board said for the first time in history: We will give the biggest investment banking institutions direct access to loan money from the Federal Reserve Board, and we don't intend to tell anybody who got it, how much they got, or what the concessions or prices were. We don't intend to give anybody that information.

I find that completely untenable. I just am not going to vote for the nomination of a Chairman of the Federal Reserve Board who says to Congress and the American people: Yes, we opened that window. We decided to do direct lending to the biggest investment banks, which, by the way, steered this country right into a huge wreck. Take a look at what and who caused this financial wreck that cost this economy $15 trillion in wealth. American families had lost $15 trillion in wealth.

The Federal Government had either spent or lent or committed $12 trillion to bail out particularly Wall Street and the biggest firms on Wall Street. All of those biggest firms on Wall Street, I believe, and even those that are now the healthiest firms that are experiencing record profits and are preparing to pay out record bonuses of somewhere around $120 to $140 billion, those firms would not have survived. They would have gone under were it not for the help of the American people through their government.

The question for the Federal Reserve Board from the Congress and the American people is: What did you do? How much did you do? What was the collateral? Under what conditions? We need to know.

The Chairman of the Fed said he supports transparency. If that is the case, show us a little transparency. How is it that someone can possibly argue that telling us now that they gave $200 billion here or $1 trillion there to firms that are now showing record profits and preparing to pay the biggest bonuses, how can that possibly injure those firms? In fact, many of them have apparently paid the TARP funds back, let alone the direct loans from the Federal Reserve Board.

My only point is simple. I don't have a beef against Ben Bernanke personally. I kind of like him. I met him a number of times. I think he steered us through some tough times and probably made some good decisions at the right time. I also have some differences with him on economic policy and monetary policy. But I have a very big difference on this question. This question is controlling for me. If the Federal Reserve Board believes it has unlimited capability to decide it will change the rules on everything, open a direct lending window and give it to the biggest investment houses in the country, and they don't intend to ever tell any of us what they did or why or how; they don't intend to disclose any of it, that is not what I call open government.

That is not something that is written in the Constitution. It is not something that this Congress should tolerate.

This Congress should say to Mr. Bernanke: Your nomination is here in front of the Senate. We will act on it as soon as you provide the information Senators have requested of you--by the way, the information that a Federal judge has already ordered that you disclose. As soon as you comply with that, then your nomination shall have a vote in the Senate.

I wanted to explain in more detail my response to people who had asked me what I was going to do on the nomination. That gives adequate explanation.

I also wanted to comment briefly that the President today said something quite extraordinary, and I want to compliment him for it. I know he is walking into a thicket of trouble because a whole lot of big interests are going to gang up on these proposals. Let me tell you the two proposals the President offered that make a lot of sense.

No. 1, he said big financial institutions that are too big to fail are too big. That is pretty simple. If they are too big to fail, they are just flat out too big. We ought to stop this concentration because too big to fail means no-fault capitalism. If they run themselves into trouble, the taxpayer picks up the tab. The taxpayer bails them out. That is what too big to fail means.

The President says no more. Let's get rid of that too-big-to-fail tag and let's decide that if they are that big, let's stop this concentration.

The President also has indicated that we ought to have financial institutions that are not trading in derivatives on their own proprietary accounts. I wrote a piece in 1994, 15 years ago, that was the cover story for Washington Monthly magazine. The piece I wrote was ``Very Risky Business.'' I believe at the time there was $16 trillion of notional value of derivatives in our country. I said what is happening is outrageous. We have taxpayer-insured banking institutions that are trading on derivatives in their own proprietary accounts, putting taxpayer money at risk. It is flat out gambling. I said they may just as well have a craps table or a Keno table in their lobby. Oh, they can still call it a bank, but it is a casino.

Fifteen years ago, I wrote that article. The fact is, we have gone through this unbelievable collapse of the economy--$15 trillion of wealth lost by the American people--and we still have

these institutions trading on proprietary accounts. The President says it ought to stop. I agree with him.

The President also says we ought to separate, as Paul Volcker suggests, the FDIC-insured commercial banking institutions from the investment banks over here. They were put back together. I said on the floor of this Senate 10 years ago--five, six, eight times--and gave long speeches predicting that if you do this, if you fuse together commercial banks and investment banks, you are headed for trouble. I said on this floor: Within a decade I think you are going to see massive taxpayer bailouts. People have asked me: How did you find the crystal ball? I just guessed. But I worried that if you put this together, this is a bargain for trouble, this is asking for trouble. Ten years later, we have seen this unbelievable collapse.

The President is right; and it takes courage for him to say it--let's decide to separate investment banking from commercial banking. Paul Volcker has talked a lot about that, and he is right about it. So I know what is happening.

I just saw, in CongressDailyPM: ``Banks Kick Off Effort Against Volcker Rule.'' ``A furious lobbying effort among large banks was set off today by President Obama's announcement that he will push a rule forcing them to choose between being a commercial institution or an investment bank that focuses primarily on trading for its own profits.'' The President dubbed this plan the ``Volcker Rule.''

I met with Paul Volcker in my office recently. I have talked with him at some length about this. Paul Volcker is dead right, and so is the President. This is going to provoke an unbelievable battle here. I understand that. There is a lot at stake. The big interests--they want to keep doing what they are doing. The big investment banks, at the moment--you take a look at their balance sheet. They are not, by and large, loaning money to the interests in this country that desperately need it. They are trading on proprietary accounts and making a lot of money trading. The fact is, if they are still too big to fail--and they are--that is called no-fault capitalism, and it is our risk, not theirs.

None of them would be around anymore had the U.S. Government not stepped in to provide a safety net. Now they are telling us: Well, these changes the President and others suggest, they are radical changes. No, they are not. They are changes that go back to the future in many ways. They are changes that go back to a period--1999--before a piece of legislation that was passed by the Congress to decide: Let's put together these big old holding companies and put everything into one. One-stop financial shopping, they said. Compete with the Europeans. We will put up firewalls. It turned out they were made of tissue paper and the whole thing collapsed.

I just say I think the President has made the right call. It is gutsy. It is going to provide a big fight around here. But it is not a secret, perhaps--given my history and what I have said in opposing the kinds of things that were done 10 years ago that set us up for this fall--it is not surprising that I fully intend to support the President's effort. I think it is critically important to get our financial system reformed and done right.

Then, it is important to do one other thing; and that is have regulators who do not brag about being willfully blind. We had a bunch of folks in here for a bunch of the last decade who said: Do you know what? We have decided to take this important government job--in any number of these regulatory areas--and we are proud to say we are probusiness. What does that mean? We are proud to say we are at the SEC, we are at this agency or that agency, and you all do whatever you want. We won't look. We won't watch.

In fact, some of them were so incompetent that even when people-- whistleblowers--came and said: Bernie Madoff is running a Ponzi scheme, even when somebody told them what was going on, they did not have the guts or the time or the intelligence to investigate it.

But being willfully blind ought not be something to boast about anymore. Going forward, we want effective regulation. Regulation is not a four-letter word. The lack of regulation caused this crash in many ways and cost trillions of dollars to American families.

I am not suggesting overregulation. I am saying when you have certain areas that are regulatory in this government, to make sure the free market system works, and works well, when people commit fouls in the free market system in this area of competition, you need to have somebody there with a whistle and a striped shirt to blow the whistle and say: That's a foul. If you do not have that, the system does not work and the system gets completely haywire. That is what happened in the last decade. That is not a technical term, that haywire issue. But we have the right and the opportunity to get this right now, and I say to the President, good for you. This proposal is the right proposal.

Then, let's see, in the weeks ahead and the months ahead: Whose side are you on? I say to those in public service on these issues: Whose side are you on? Are you on the side of the big investment bankers who helped steer us into the ditch that involved substantial wagering and gambling here, and then we pick up the tab because it is no-fault capitalism on too-big-to-fail issues? Or are you going to stand up for the American people here and decide you have to put this back in place the right way? I hope we will have enough support to follow the President's lead on this issue.

Let me just make one final comment. I understand the need for a financial system that works. I admire bankers who do banking the old- fashioned way: take deposits and make loans and do underwriting in between, looking in somebody's eyes to say: You want a loan? What is it for? Let me evaluate that. Can you repay this loan? That is underwriting. That is the way it works. The Presiding Officer, I know, ran a bank and understands that.

We need a good financial system. You even need investment banks. I know one of my colleagues once said: Investment banking is to productive enterprise like mud wrestling is to the performing arts. Well, that was tongue in cheek. But we need investment banks to take the riskier investments out there. But our investment banking system went completely off the map. We need good commercial banks that are capitalized. We need investment banks. All of that is important. We need to get it right. I do not mean to denigrate all finance because finance is very important in this system to help this free enterprise system work, to help people who want to start businesses and hire people. That is very important for our country.

So we will have that debate in a longer fashion in the weeks ahead.

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

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

Mr. President, I ask unanimous consent that the Senate proceed to a period of morning business, with Senators permitted to speak for up to 10 minutes each.

Mr. President, I ask unanimous consent that the Judiciary Committee be discharged from further

consideration of S.J. Res. 25 and the Senate proceed to its immediate consideration.

Mr. President, I ask unanimous consent that the joint resolution be read a third time and passed, the preamble be agreed to, the motions to reconsider be laid upon the table, with no intervening action or debate, and that any statements related to the measure be printed in the Record.

Mr. President, I ask unanimous consent that the Senate now proceed to the consideration of S. Res. 391 which was submitted earlier today.

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

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. Res. 392 submitted earlier today.

Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motions to reconsider be laid upon the table, with no intervening actions or debate, and that any statements related to the resolution be printed in the Record.

Mr. President, I ask unanimous consent that when the Senate completes its business today, it adjourn until Friday, January 22, at 9:30 a.m.; that following the prayer and the pledge, the Journal of proceedings be approved to date, the morning hour be deemed to have expired, the time for the two leaders be reserved for their use later in the day, and that the Senate resume consideration of H.J. Res. 45, the debt limit.

Mr. President, for the information of Senators, there will be no rollcall votes during tomorrow's session of the Senate.

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

Mr. President, I support the Conrad-Gregg fiscal action

task force amendment. I am going to vote for it, and I do so not because I think it is the best solution. The best solution would be for us, year to year, to reconcile that which we spend and the amount of money we have to spend. But we don't do that, and we are now in a position where we have an unsustainable fiscal policy. It just is.

I know people on that side want to blame this administration; people on this side want to blame the last 8 years. Whatever the blame might be, let me say that we are on an unsustainable course, and it is required, in my judgment, by Republicans and Democrats, to come together to find a way to address it. This is not the best way, but it is probably the only way we are ever going to get some control.

I have heard so many people come to the floor of the Senate to say this administration is a socialist administration; it is going to spend this country into the ground. I have heard all of that. It is easy for me to stand here and go all the way back to a time when I stood on this floor--a time when we had the only budget surplus in several decades-- and say in response to a President's proposal to spend it before it even existed, and all we had was 10 years of projections, why not be conservative? These surpluses only exist this year, not for the next 10 years. Let's be a little conservative. And the blowback was: Katey, bar the door. Let's do big tax cuts. Let's do all these things. Then immediately--and I didn't vote for it--but immediately we ran into a recession, then we ran into a terrorist attack, then a war in Afghanistan, and a war in Iraq--which, by the way, we never paid a penny for. We just sent men and women to go to war and said: We won't pay for it except with emergency supplementals every year.

So there is plenty of blame to go around. This current President, President Obama, has been in office just 1 year. There are things with which I disagree with this administration, for sure. But, look, he inherited the biggest mess in the history of a Presidency, in my judgment. So let's try to figure out how we can get the best of what both parties have to offer in this country rather than the worst of each.

I have often quoted Ogden Nash's four lines that I think captures this the best when he was talking about a guy who drinks too much and a woman who scolds.

He drinks because she scolds, he thinks. She scolds because

he drinks, she thinks. Neither will admit what's true. He's a

drunk and she's a shrew.

So it is perhaps with the political parties. Neither will admit what is really true. Both have some responsibility, and both have a responsibility to lead. We are not leading year to year in the normal budget process and in the normal appropriations process to reconcile the amount of money we have and the needs that exist. We are not reconciling that. We are offering a level of government that exceeds the amount of money we have, exceeds the American people's willingness or ability to pay for it, and that is not sustainable in the long term for this country.

So the question is, What do we do? Some say, Well, you can never increase any taxes. I say: Why not, if you have people who aren't paying their fair share? How about increasing taxes on them? Some of the biggest folks in the country, who are running hedge funds, are paying the lowest tax rates in America. How would you like to make $3 billion a year?

By the way, when somebody comes home and says: Honey, how are you doing?

That person says: Well, I'm doing pretty well--$3 billion a year. That is almost $250 million a month salary. Doing pretty well. By the way, I don't know whether you know it, sweetheart, but I get to pay the lowest taxes in the country. I get to pay, on carried interest, a tax rate of 15 percent.

So if somebody says: What is the solution to this? Cutting spending? Yes, I think so, in areas where we are spending money we shouldn't-- such as beaming television signals into the country of Cuba. We have spent $\1/4\ billion sending television signals to the Cuban people in TV Marti. Yes, we have spent that, and there are television signals beamed from 3 a.m. to 7 a.m. and blocked by the Cuban Government so nobody can see them. So we have spent $\1/4\ billion sending television signals no one can see. I guess some people here feel better about that. I have been trying to shut that down for 10 years and can't even shut down that kind of insanity.

So cutting spending, yes. How about asking those who aren't paying their fair share of taxes? Yes. Let's do all of that. Perhaps we are requiring that be done if we set up this mechanism. Perhaps that is what will happen. I wish we didn't have to do this, but with the choice of yes or no, which is a very simple choice on should we do something or should we just continue down this bumpy road that leads to a destination none of us wants and none of our children will like, my answer is let's vote yes on this amendment. Let's decide to do something that maybe can put this country back on track, help us restart this economic engine and give the American people confidence again.

I used to teach a little economics in college, and I used to teach that it didn't matter what the supply and demand curve and all those issues dealt with, with the graphs. What really matters is do people have confidence about the future--about themselves, their family, and their future. If they do, they do the things that expand the economy. They take a trip, buy a suit of clothes, buy a car, buy a home. That is what expands the economy. If they are not confident, they do exactly the opposite, and they contract this economy.

Let's do some things that give people some confidence in the future. Let's give them confidence that finally, at last--at long last--we are going to grab these issues, look them square in the eye, and say: We will fix them. Why? Because our kids and grandkids deserve that, and this country deserves that leadership.

Mr. President, I yield the floor.

Mr. President, there has been a lot happening in this country with respect to politics and the economy over these past months, and I know there is great angst and concern across this country. There are questions: When will America get the bounce back in its step? These are troublesome times, for sure, for a lot of reasons, but I am convinced we will find ways to put America back on track. I am convinced of that.

You know, you go back a couple hundred years in American history, and this country has been through some very tough times but always-- always--rebounds. There has always been a sense of optimism that the future will be better than the past, that kids will have it better than their parents. I am convinced of that.

I think the American people have plenty to be steamed about, and they need to find ways to let off that steam. They have a right to be steamed, and let me describe a bit of it.

One year ago, this President took office and he inherited an economic wreck. That is just a fact. The question at that moment was, will this economy completely collapse? That wreck was caused by a lot of things, but deciding to go to war and not paying for a penny of it year after year--everybody knows better than that. You can't do that. Hiring regulators who were boasting that they weren't willing to regulate, saying to the big shots on Wall Street, the speculators, the big investment bankers, and others: Do whatever you want. We won't watch. The sky is the limit. We don't care. Now we see the carnage that results from that: derivatives--instruments that derive value from something else--CDOs, mortgage-backed securities, synthetic derivatives. Do you know what a synthetic derivative is? That is something that doesn't have any value of any kind. It is just a wager. You might as well put a craps table in the middle of an investment bank lobby and say to them: You don't have to go to Las Vegas, you can gamble here. And by the way, you can gamble with other people's money, not your own. But even investment banks and FDIC-insured banks have been gambling on their own proprietary accounts on derivatives. We ought to know better than that. So what happens is the regulators give a green light to that kind of rancid behavior, and it steers this country into an unbelievable bubble of speculation. Then the center pole of the tent collapses, the economy nearly collapses,

and a whole lot of the American people are paying for it. The fact is, these folks fleeced America. It is the great bank robbery in American history.

When I talk about big investment banks and some others, the community banks out there weren't involved in this. Go to most of your hometown banks and take a look at how they are doing. They are doing just fine because they weren't involved in these sorts of shenanigans. It was the biggest financial firms in this country that steered this country into the ditch, and it started, yes, with mortgage brokers and mortgage banks and investment banks and hedge funds and derivatives traders. All of them steered this country into the ditch. By the way, now they are driving the getaway car, going to the bank to deposit their big bonuses. They got big bonuses even while their firms lost a lot of money. Now, all of a sudden, many of the firms that would have collapsed were it not for the help of the American people are now earning record profits and set to pay the biggest bonuses in history in the next few weeks. That is unbelievable, and in my judgment, it shouldn't be allowed.

In my judgment, we have to do something about this, and one of the pieces of the agenda in front of us is to reform this system of finance and try to wring out the unbelievable orgy of speculation in this system that puts the American economy and the American people at risk. So one of the pieces of this agenda at this point is so-called financial reform legislation.

As I said, I am convinced that while this ship of state has a lot of leaks, we can fix it and set it right and set it back on course, but it is not going to be done by revisionist history of the past by some, by those who put their hands over their eyes and plug their ears and decide, you know, we are not interested in learning the lessons of the past.

This President inherited a wreck. He may not have done every single thing right in the last year, but I will tell you this: He took action to try to put a foundation under this economy to prevent its collapse, and I think he deserves some credit for that. Had he done nothing after walking in the White House door, the Federal budget deficit was going to be $1.3 trillion. That is what this President was left with from the previous administrations.

So, as I said, we have a lot of work to do, and it is going to require the cooperation of people in this Chamber. There has not been much cooperation recently. This Chamber has been pretty divided. You know, I have I guess dozens of times quoted Mark Twain when he was asked once by someone if he would engage in a debate. And he immediately said: Yes, if I can take the negative side. And they said: Well, we have not even told you the subject. He said: That doesn't matter. The subject doesn't matter. The negative side will take no preparation for me. And so it is here in this Chamber--the negative side saying no to every single initiative, even those initiatives that I believe saved this economy from collapse. But we need to do better than that. We need to work together and find ways, in a bipartisan manner, to cooperate for this country's benefit.

So what are the issues? Well, I just mentioned financial reform. We have to fix this system of ours. The fact is, the same firms that steered this country into the ditch, the same people, the same interests are doing exactly what they did before: trading on their own proprietary accounts and taking on massive amounts of risk. We have to decide whether we should separate investment banking from FDIC-insured banking. We have to decide if you are too big to fail, you are just flatout too big. We have to decide those things in a financial reform bill that comes to the floor of the Senate.

The American people are concerned about a lot of things--first and foremost, jobs. There is no social program in this country that is as important as a job that pays well, in my judgment. A good job that pays well makes everything else possible for families. So we need to focus like a laser on trying to create jobs once again in this country and put people back on payrolls. If we want to do something for the economic health of both families and America, it is good jobs that pay well, with some security and some benefits. There is no better tonic than that.

It is also the case that we need to focus like a laser on this issue of deficits and debt because the fact is, we were left with an economy that is not sustainable with respect to the current deficits. It just isn't. You can't fight wars without paying for them. You just can't do that. You can't enact programs without paying for them. And when you fall into a very deep recession and your revenues dry up and you have $400 billion a year less in revenue--because of unemployment and many other stabilizing programs that try to help people who have been laid off and who are in trouble, you have $400 billion more in outlays--and you run into giant Federal budget deficits, we have to fix that. We have to do that because this course is not sustainable.

There is one other issue I want to talk about for a moment. I hope that early on in this year, we will do something else that is important to the economic strength of America, and that is to pass an energy bill that moves in the direction of giving us the freedom from foreign oil. Let me describe why this is important in the context of trying to also fix what is wrong in this economy. We are a nation that uses a substantial amount of oil. We stick little straws in this planet every day and suck out oil. We suck out about 85 million barrels of oil a day from this planet called Earth. Of the 85 million or 84 million barrels of oil a day, one-fourth of it is used in this little place on the planet called the United States of America. We need one-fourth of all the oil that is produced every day just to keep America going, and a substantial amount of that oil is produced in areas of the world that don't like us very much, areas of the world that are very troubled. So we have great vulnerability with respect to our nation's energy security.

The fact is, energy powers this country's economy. We don't think about it. We get up every single day and we flick on a switch, we plug something into a wall socket, we turn a key in an ignition. In dozens of ways, beginning when we first step out of bed and turn on the light, we use energy, and we use a lot of it. So the question is, What can give this country some energy security? Being 70 percent dependent on foreign oil? Certainly not. By the way, in addition to getting nearly 70 percent of our oil from other countries, nearly 70 percent of the oil is used in our transportation fleet.

So what do we do about all that? The fact is, we passed the Energy bill out of the Energy Committee, about 6, 7 months ago here in the Senate, and that Energy bill, in my judgment, has a lot to commend it. I believe that early on in this Congress, the President and the Senate ought to decide we are going to take up this bill. It is bipartisan. We should pass this legislation and give America another step in the direction of being less dependent on foreign oil.

It is also about jobs. You create a lot of jobs by new production and conservation systems and so on.

Let me describe what is in this legislation. The legislation deals with increasing production of energy here at home. It also increases conservation and efficiency and maximizing the production of renewable energy. It also creates the first ever national renewable electricity standard, which means that a certain percentage of our electricity to come from renewable energy. All that is in this legislation and it has already been passed by the Senate Energy Committee on a bipartisan vote. Let me start for a moment with some good news.

Mr. President, could I be notified at the end of 15 minutes, please, of my presentation.

Let me start with some good news because we almost never hear good news these days in America. All the news in America is about what went wrong, the old saying about bad news is that it travels halfway around the world before good news gets its shoes on. Almost nobody has any interest in saying let's broadcast good news all day.

The good news last year, with respect to oil, was that for the first year in a long time, America actually increased its production of oil. We have been on this declining path. No more. Last year

we increased the production of oil. Part of that comes from a formation in my part of the country called the Bakken shale. It is unbelievably complicated what we have done, but our country has learned to go explore and get oil from formations that 5, 8, 10 years ago you could not get oil from. There is up to 4.3 billion gallons of oil in the Bakken shale formation, 4.3 billion barrels of recoverable oil, that can now be unlocked using today's technology. They drill down 2 miles with a drilling rig, do a big curve, and go out 2 miles. With one rig they go down 2 miles, then go out 2 miles and then they hydrofracture it and the oil drops. They are getting up to 2,000 barrel-a-day wells. That is just one part of the substantial additional production available in this country, and it is producing now in a very significant way in Montana and North Dakota in the Bakken shale.

Also, in the Energy bill that was passed by the Senate Energy Committee, I introduced an amendment that was agreed upon on a bipartisan vote that opens the eastern Gulf of Mexico. We believe that there is at least 3.8 billion gallons of recoverable oil and at least 21 trillion cubic feet of natural gas in the eastern Gulf of Mexico including the Destin Dome. There is a lot to be achieved by additional production and we should do that. There is no question we should do that. The legislation that has been passed on a bipartisan vote, with my amendment to open the additional production, would allow that to happen.

That is one piece of the Senate Energy Committee's legislation. But there is much more. We understand our most abundant resource is coal, but we need to have a lower carbon future as we continue to use fossil fuels for energy. So the research and the science that is exciting, to be able to continue to use coal and capture and sequester or capture and provide beneficial use of CO2, is something we are working on very hard. We advance it in this legislation.

If you are going to maximize production of energy where the wind blows and the Sun shines, through solar energy and wind energy, you need to develop an interstate highway of transmission. We don't have that. We have an interstate highway system to drive on, but we don't have an interstate highway system to move electricity on and to produce energy where the wind blows and the Sun shines and then move it to the load centers. That does not exist at the moment.

In the last 10 years, we have built about 11,000 miles of natural gas pipeline to move natural gas around the country. During the same period, we only built 668 miles of high-voltage transmission lines between the States. We have to fix that. If you are going to maximize the production of energy where the wind is blowing and the Sun is shining, and we should, then you need to have an interstate highway of transmission to move that energy to the load centers. This transmission section is in the Senate Energy Committee's bill.

We have included a national renewable electricity standard, for the first time in history, in this legislation. That will drive the production of renewable energy because 15 percent of the energy that is sold must come from renewable energy sources. I think the votes exist on the floor of the Senate to get to a 20-percent RES. All of that, I think, is very important.

The other thing we do is we move toward an electric drive vehicle system with investments in battery technology and all of the related issues that would involve electric drive vehicles. That is going to be part of our future.

Beyond the electric drive future, I think, is hydrogen and fuel cell technology. There is so much to be excited about. We do need to get the legislation that has already passed the Senate Energy Committee to the floor of the Senate. Let me describe it briefly by saying this. There are some who say the issue is climate change, and we have to bring a climate change bill to the floor of the Senate.

Here is my view. To address climate change and have a lower carbon future means that you have to put in place policies that actually reduce carbon. How do you do that? By doing the very things I have described in this legislation that is now out of the Senate Energy Committee and ready to come to the floor. It is addressed to the specific policies that will reduce carbon, that will actually allow us to make progress in addressing climate change issues.

I know there is a lot of discussion, and also a lot of controversy surrounding the issue of cap and trade. My own view on cap and trade is that I don't have the foggiest interest in providing a $1 trillion carbon trading market for traders and speculators on Wall Street to decide on Monday and Tuesday what our energy is going to cost on Thursday and Friday. I am not interested in doing that, given the history of what has happened on Wall Street and the economic wreck they caused in recent years.

Having said that, we still need a lower carbon future. I agree with that. The way to do that is to pass smart energy policy. We have a bipartisan bill that addresses all these issues: additional production, additional conservation, more efficiency, maximizing renewables, the first ever renewable electricity standard. All these issues will strengthen our country, and I hope very much one of the priorities in the coming months will be to pass the energy legislation that was passed by the Senate Energy Committee and advance our country's interest.

I yield the floor.

If the Senator will yield, I have always refrained from using the word ``retire'' because I can't sit around very much. So I don't intend to quit working. But I am not seeking reelection, the Senator is correct about that. This is a great institution, and it is a great privilege to serve here. I look forward to a lot of work this year with my colleague from Illinois and I hope, together, we will frame the policies that will help put America back on track to a better future.