Floor Statements

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

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

Mr. President, I think it is obvious to all Americans that we face a very severe and difficult financial crisis. We have had an election. The American people have voted for change. We now face significant challenges. I was thinking, as I was walking over to the floor of the Senate, about a visit I had recently at a nursing home in North Dakota.

This financial crisis is probably the most significant financial crisis since the Great Depression. We don't know where this will go. We don't know how many will ultimately be unemployed. We don't know how long it will last. This is a recession. We hope it is not extraordinarily deep. We hope we can find the menu to overcome it and the kinds of policies to try to make certain we move from this position to a position of economic strength and economic growth, once again.

But I went to a nursing home in North Dakota because North Dakota's oldest citizen was there. She had a birthday. She is a 110-year-old woman; very lucid, very conversational. We talked about the Great Depression, as a matter of fact. We talked about the tough times in her life. She was born in 1898. By the way, her niece was there at the nursing home who had put on a birthday party for her in August. Her niece is 103 years old and her son, who is still farming, is 80 years old.

I had a chance to talk to them all about what life was like from 1898 to 2008. One of the significant things she remembered was the difficulty of the Great Depression in the 1930s, when it was hard to find jobs and people had soup lines in the major cities and people were struggling to try to make ends meet.

Well, I think a lot of folks from the 1930s forward felt we would never again see these days because we put in place economic stabilizers and we put in place provisions in law that prohibited the kind of activities in the roaring 1920s that led us to the 1930s and the excess, the unbelievable debt, the greed that resulted in the economic collapse of the 1930s. So we put in place things such as the Glass- Steagall Act and other provisions that prevented banks from being engaged in real estate and securities and things that were inherently risky that caused major problems and collapse in the 1930s.

It is easy to forget lessons. The Congress over the years, Presidents over the years, and certainly the financial services industry moved ahead. I harken back to 1999, when something called the Financial Modernization Act was passed by the Congress. I said then it was a terrible thing to have done. It stripped apart the Glass-Steagall Act and essentially said you can create big bank holding companies, you can put firewalls in, you can merge real estate and securities with banking; it will all be fine. That was in 1999.

In fact, here is what I said during that debate on the floor of the Senate: I say, to 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. Don't do it through deposits that are guaranteed by the American people.

When we passed the Financial Modernization Act--and I was one of eight Senators to vote no, I said this during debate: The 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, farm businesses, and others.

I regret I was right. Massive taxpayer bailouts. It didn't take quite a decade. It took 9 years. Now we see the largest proposed bailouts in the history of our country.

It was a time of self-regulation. Alan Greenspan, the head of the Federal Reserve Board, said the financial services industry will regulate itself. Well, not quite. Here is what Alan Greenspan said last month:

I made a mistake in presuming that self interests of

organizations, specifically banks and others, were best

capable of protecting their own shareholders and their equity

in the firms.

What an unbelievable mistake. Regulators that were willfully blind saying: You know what. We will pass the Financial Modernization Act allowing real estate, securities, and banking to come back together, forgetting the lessons of the Great Depression. Then, those who were hired to regulate decided self-regulation will work. We don't have to regulate. We will be willfully blind. So what happened? Well, the subprime loan scandal happened. The subprime loan scandal, of course, is at the root of this because it is most evident of the greed that exists in our economy in recent years. It resulted in bad mortgages spread all around this country and around the world. They were put into securities and sold up

through banks into hedge funds, into investment banks, and then all of a sudden it all turned sour.

Here is what the subprime loan scandal is all about. The biggest mortgage bank in America, just to show you what they were saying: Do you have less than perfect credit?

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

mortgage payments? If you have been denied by other lenders,

well, call us.

It is a new business model, apparently.

Are you a bad credit risk? Call us.

Countrywide said that. The CEO of Countrywide was given the Horatio Alger award--until it all collapsed.

Millennium Mortgage said:

Twelve months, no mortgage payments. That's right, we'll

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

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

will reduce your current monthly payment by 50 percent and

allow you no payments for the first 12 months.

Zoom Credit, another mortgage company, 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 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?

That is the bottomless pit of greed that resulted in massive numbers of mortgages being put out there in this country. Then the brokers were making an enormous amount of money. The mortgage bankers were making money and business fees, and then they securitized it, like they put sawdust in sausage in the old days--good loans and bad loans. They wrapped them into securities and chopped them up and sold them upstream. By the way, what they did, when they locked people into that kind of credit, those loans, they put in resets of higher interest rates in 3 years, where they would have known the homeowner wasn't going to be able to pay the monthly mortgage, and they put in prepayment penalties so they could not pay it off if they wanted to. That is how they made these attractive investments with high rates of return.

So the subprime loan scandal made everybody rich, like hogs in a trough grunting and shoving and making lots of money. Then one day it collapsed like a house of cards. The hedge funds that were investing in these--the credit default swaps that surrounded them with massive amounts of leverage, it all collapsed. When you create a house of cards, it is destined to collapse.

I mentioned hedge funds. Some of you may have seen the hearing held in the House a few days ago. The highest income earner in the hedge fund industry last year earned $3.7 billion.

So we create this crisis, get rid of the protections that existed from the Great Depression, abolish Glass-Steagall, and create a Financial Modernization Act, and say everything will be great. Then the regulators turn into willfully blind public servants, and the Chairman of the Federal Reserve says let them regulate themselves, and it all turns sour and the house of cards collapses.

What is happening now is, the Treasury Secretary came to the Congress and said: We face very serious problems. I must have $700 billion in 3 days and, if not, I believe there is going to be a financial catastrophe of sorts. So the Congress didn't do it in 3 days, or with a three-page bill, as the Treasury Secretary suggested. But the Congress passed a $700 billion bailout proposal. The Treasury Secretary said he wanted to do that because he wanted to purchase toxic assets from the balance sheets of the firms that invested in all of this. So he got the $700 billion. Then he said: I have changed my mind. That is not what I am going to do with the $700 billion. I want to purchase capital from banks to extend their credit or lending opportunities because the credit markets are frozen. He took $125 billion of the $700 billion and gave it to nine banks, some of whom didn't want it. But he gave it to them with no strings attached, no requirement that they expand lending or not use it to pay substantial bonuses. We have seen examples of bonuses, with $33 billion in bonuses on Wall Street in 1 year. So no- strings-attached money was given to nine banks with no requirement to expand lending, no requirement to cut back on dividends, and no requirement that they not provide hefty bonuses.

So the question is, is that going to inspire confidence out there someplace? Now we discover there has been no expansion of credit as a result of $125 billion of taxpayer money being put into those nine banks because it was no strings attached.

So the next piece that occurs is unemployment. We hear constantly-- nearly 24 hours a day--about the financial sector. I agree the financial sector is unbelievably important to an economy such as ours, no question about that. How about the manufacturing sector, the working folks? Is that important?

About a week ago there was almost an apoplectic seizure over the notion that consumption was down. Consumers weren't consuming. It is not a surprise when there are more people out of work and people have less money that they are going to consume less. Does it concern anybody out there as they listen to Mr. Paulson say the $700 billion that Congress gave him is destined only to be used for the financial industry? Does it concern anybody out there that the consumers losing their jobs are not going to be able to consume? That is part of this economy as well.

Here is what we see on unemployment. The U.S. employment ranks have shrunk by 1.2 million in the first 10 months of this year--more than half of those jobs lost in the past 3 months alone. Last month, 240,000 jobs gone. About 800,000 workers exhausted their extended unemployment benefits, and more than 350,000 will exhaust theirs in November and December.

This chart shows what is happening in the industry in 2008. Manufacturing, down nearly a half million jobs. Construction, nearly 400,000 jobs. Business services, 361,000 jobs gone, vanished. These are hundreds of thousands. Behind every one is somebody coming home at night to his or her family and saying: Honey, I have lost my job. I don't know why. I did a good job. I worked there for 10 years, but I was told the job doesn't exist anymore.

This is about heartache by a lot of families. We experienced this before. Will Rogers, one of the interesting commentators on American life in the Great Depression, said:

The unemployed here ain't eating regular, but we'll get

around to them as soon as everybody else gets fixed up OK.

I wanted to visit a moment about these issues and ask the question, is there going to be a laser-like focus on working people just as there has been on the financial services sector? There are a good many in the financial services sector that caused this wreck. They are the ones who steered this country into the ditch with all kinds of financial engineering and exotic new products that turned out to create a house of cards.

It seems to me that one of the things we ought to look at is creating protection with respect to these new exotic financial products that turned out to be enormously risky and dangerous to our economy. Some have talked about creating a financial products safety commission. We have a Consumer Product Safety Commission to worry about unsafe products. That turned out to have been a commission without much teeth because of the person who currently runs it. Perhaps we can have a financial products safety commission that would take a look at derivatives, credit default swaps, and the kind of sophisticated engineering going on on Wall Street which might produce a lot of money for some in the short term but pose a great deal of danger for this economy in the intermediate and long term. That all makes a lot of sense.

I just described the Treasury Secretary talking about the $700 billion he has now been provided, and that it is going to go to the financial service industry exclusively, he says. So it is not available to those who might be creating jobs out there or trying to avoid losing jobs. At the same time, the Treasury Secretary is saying: I have this pot of money, and we are going to use it to try to unfreeze the credit markets. The Treasury Department is saying they favor new bank mergers, which is exactly the last thing this country needs. We already have big banks that are too big to fail, which means if they are set to fail, we have to rescue them. Now the Treasury Department says the solution is bigger banks; let's have more mergers.

It is unbelievable to me that the Treasury Department would not have

learned a lesson. Instead, they are out there promoting more mergers. I guess those mergers will be promoted with the very money appropriated by the Congress.

Mr. President, the action we have to take now, it seems to me, is to try to find ways to establish some confidence in this country. I have said often that I used to teach a bit of economics in college, briefly. I was able to overcome it. Economics is not a science; it is psychology pumped up with helium, and you can call yourself an economist, but nobody really knows.

The economy in this country is not about dials, gauges, knobs, levers, and all of the things like investment tax credit, depreciation, M-1B, and all those things economists study. It is about confidence. When people are confident in the future, they do things that manifest that confidence. They buy a car, buy a new suit of clothes, take a trip, or maybe buy a house. They do the things that you do when you are confident about your future and your job. That is called economic expansion. It is not sophisticated. It is about how people view the future.

When they view the future with great alarm and less confidence, they do exactly the opposite. They defer the purchase or decide not to buy that suit of clothes or buy that car until next year, or we will not move into that other home or take that trip. That is the way an economy contracts. It is all about confidence.

The question is, what can provide that confidence now? One of the concerns I had about the original bailout was that it did nothing to provide a set of regulations that stops the very behavior that caused all of this. You have to learn from it. It seems to me you have to provide the regulation and say to the American people that we will not let this happen ever again.

So there are a number of things we have to do. Any recovery plan--and I think we need a recovery plan, and some call it a stimulus. I think we need a recovery plan that gives people a sense that we care about whether they have a job. For example, there is discussion about the automobile industry. I don't view this as three companies or one industry. I view it in the context of what do we do to deal with this economy, especially as it relates to jobs. We are told that industry relates to about 3 million to 5 million jobs. That is the connector all the way through the industry. If that is the case, what would it mean if 3 million to 5 million jobs are lost in the next few months, coming from America's manufacturing base? It seems to me it would be devastating to an economy already at great risk.

So the question is, when will we also ask whether we will be willing to support, through a recovery program, the kinds of jobs that we need in this country and willing to support a world-class manufacturing base without seeing that base decimated as the economy gets weaker? I don't think you will long remain a world economic power unless you have world-class manufacturing capabilities.

When we look at those sectors of the economy that have that capability and then decide, as some suggest, that it doesn't matter who loses their job or gets laid off, well, it sure does matter. It matters to me. If there is all this concern about the financial sector, what about the concern about the job-creating sector in the manufacturing area? I think we need to do a number of things. No. 1, I think we need a stimulus or a recovery plan that would make significant investments. I don't think you do that by just giving people checks. That is not the way forward, in my judgment. I think you do it by putting people to work on public works projects, by investing in roads, bridges, schools, and libraries--the infrastructure needs that have been so long deferred in this country.

All of those projects are ready across this country to be done. It will put people back to work, and give people confidence about the future.

Second, we ought to take action this week so that we say to the Treasury Secretary: If you are going to continue to move money out of that $700 billion pot, you have to put conditions on it. We don't want the American people to have to read that they are anteing up money so the Treasury Secretary can move it to Wall Street and Wall Street can then pay bonuses in December and January and they can use that in any way they want without conditions that require them to expand lending or any other conditions that ought to be attached to that money. We ought to insist those conditions exist.

Third, we ought to require regulations be put in place as soon as possible to prevent the kind of things that we have seen happen that caused this financial wreck in the first place. Those regulations do not now exist. I know the former Fed Chairman Greenspan said he believed in self-regulation. He sure got a bellyful of self-regulation, and it completely collapsed this economy. We need to put in place a regulatory approach that gives people confidence that this kind of thing is not going to happen again.

We also ought to say to the Treasury Department: Stop the nonsense about more bank mergers. It is the last thing we need. Nor should we want the public money to be used to accommodate more bank mergers. I know some have celebrated the news of bank mergers. Not me. I think it weakens this country, not strengthen it.

I also believe we ought to create immediately an investigative task force of sorts that will begin to investigate and prosecute, if necessary, criminal behavior that was engaged in some of the practices that I described earlier.

All of that, I think, is necessary. I believe if and when we begin doing those kinds of things, we will give, once again, the American people the confidence about the future that they must have in order for this economy to get back on track.

There is, I know, a lot of discussion about what went wrong, and some might say: You know what, that is pretty irrelevant. It is not irrelevant at all. We are destined to repeat mistakes unless we understand the mistakes we have made. The route out of this circumstance where there is great economic peril to this country and its future, the route ahead, in my judgment, must be an active, aggressive set of actions by the Congress, working with this President and the new President, to understand the urgency of the things I have described.

Mr. President, I yield the floor. 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 the immediate consideration of H.R. 7082, which was received from the House.

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

Mr. President, I ask unanimous consent that the Rules Committee be discharged from further consideration of H.R. 6296, and the Senate proceed to its immediate consideration.

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

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar No. 778, H.R. 3480.

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

Mr. President, tragically, a month and a half ago, we lost a wonderful colleague of all of ours, Stephanie Tubbs Jones-- Stephanie Tubbs Jones was a member of the U.S. House of Representatives, a wonderful Congresswoman who, whenever you met her, had a big, broad smile on her face. She obviously loved her work on behalf of her country. All of us miss her.

There is legislation called the Stephanie Tubbs Jones Organ Transplant Authorization Act of 2008. I have worked on it in the Senate. I provided a companion bill in the Senate. Yesterday, I worked with Dr. Coburn on the other side to resolve any differences. I understand it is still being reviewed. My hope is that this legislation will be enacted today. Let me describe the importance of this legislation.

We have more than 99,000 Americans right now awaiting organ transplantation. They are on a waiting list to find an organ. In fact, two-thirds of those on the waiting list are waiting because they suffer from end-stage renal disease, and they are waiting for a kidney transplant. About 6,000 who are on that waiting list will die this year. We know how to save them, but they will die because they did not get a transplant--a kidney, heart, lung. They will die.

I have worked on this issue for many years. I recall some long while ago I worked on legislation that required every tax refund that went out to the American people in that year to be accompanied by a little sheet that told you how you could become an organ donor, how you could sign up. Seventy million Americans got a little piece of information on how to sign up to become an organ donor. On my driver's license in my wallet, it says ``donor.'' It is pretty easy to do for most Americans.

As I indicated, two-thirds of those on the waiting list are waiting for a kidney. Many will die before they get one. On the day the legislation that informed 70 million people how to become an organ donor passed, I held a press conference with a group of my colleagues. Senator Strom Thurmond came to the press conference. I believe Strom Thurmond was 90 years old then. He came to the press conference to sign a big plaque we had, to sign up as an organ donor at age 90.

You had to know Strom Thurmond to understand the irony. He was a remarkable American, a remarkable Member of the Senate. At age 90, he signed an organ donor card, and here is what he said: When I am gone, I don't know if I have anything anybody wants, but they are welcome to it. That was his notion of an organ donor card, and he signed up.

The fact is, not just in memory of our wonderful colleague, Stephanie Tubbs Jones, but in pursuit of doing the right thing. We can save a lot of lives by passing this legislation. This legislation will authorize an increase in the Federal contribution that has been the same since 1984. The Federal contribution to the Organ Procurement and Transplantation Network.

The Federal contribution to that network was $2 million in 1984, and that is what it is today. This legislation proposes an increase in that authorization--not a major increase but an increase that will allow us to do greater work to try to match those available organs with those who desperately need a donation.

The good news is that patients no longer have to wait for someone to die, for example, to get a kidney. Living donations and paired donations have dramatically increased the number of kidney donations every year. That is saving lives and, by the way, saving taxpayers money. The cost of renal dialysis is very high.

I come to the Senate floor today only to say this is a very important piece of legislation for tens and tens of thousands of people in this country who even now are waiting for an organ transplant, some of whom will die before they get it. We can save many lives with this legislation.

My hope is that at the end of today we will have cleared the bill on both

sides and then send it back to the House. They will then clear it tomorrow because it has had a very small change that we negotiated yesterday but not a material change. When we do that, we will have done something very important in terms of organ transplants and the ability to save lives in this country.

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

Mr. President, the tragedy of 9/11 is indelibly imprinted on the minds of all of us. What is not so well understood or remembered was that one month later, October 2001, something else happened. Graham Allison, someone who has worked on nonproliferation in the Clinton administration, has written a book about it. Time magazine wrote about it in March of 2002.

Here is what they said: A month after 9/11, for a few harrowing weeks, a group of U.S. officials believed the worst nightmare of their lives--something even more horrific than 9/11--was about to come true. In October of 2001, an intelligence report went out to a small number of government agencies, including the Energy Department's top secret nuclear emergency search team based in Nevada.

This is a Time report, but I have it also in a book written by Graham Allison.

The report said that terrorists were thought to have obtained a 10- kiloton nuclear weapon from the Russian arsenal and that they planned to smuggle it into New York City. The source of the report was a CIA agent named Dragonfire. Dragonfire's report actually was something that was claimed to be undetermined in terms of reliability. But it was something the CIA agent named Dragonfire had picked up. Dragonfire's claim tracked with a report from a Russian general who believed his forces were missing a 10-kiloton device. Since the mid-1990s, proliferation experts have wondered whether several portable nuclear devices might be missing from the Russian stockpile. That made the Dragonfire report all that more alarming. Detonation of a 10-kiloton nuclear weapon in downtown New York would kill about 100,000 civilians, irradiate 700,000 more, and flatten everything for a half a mile.

So the counterterrorist investigators went on the highest alert, we are told. The search team went to New York City. It was kept secret so as not to panic the people of New York. Mayor Giuliani was not informed. If terrorists had managed to smuggle a nuclear weapon into New York City, the question was, could they detonate it. About

a month later, after this report from a CIA agent named Dragonfire of a nuclear weapon having been stolen by terrorists, smuggled into New York City, about to be detonated, about to kill massive numbers of people, it was determined that perhaps this was not a credible intelligence report. But in the postmortem evaluation, they determined it is plausible to have believed a Russian nuclear weapon could have been stolen. It is plausible to believe, having stolen it, terrorists could have smuggled it into New York City, and plausible to believe they could have detonated it; one low-yield nuclear weapon. There are 25,000 of them on this planet. Think of the apoplectic seizure that occurred in October of 2001 over a report by a CIA agent that he picked up some information about one low-yield nuclear weapon being smuggled into New York City. There are 25,000 nuclear weapons on this Earth.

Our job is to provide the leadership to begin to reduce the number of nuclear weapons. The bill before us will almost certainly expand the production of nuclear weapons by India.

Here is what it says to India: Even as we take apart the basic architecture of nonproliferation efforts, the nuclear nonproliferation treaty, which India is one of three countries that has never signed, even as we take that nonproliferation architecture apart with this bill, we have said to India, with this agreement, you can misuse American nuclear technology and secretly develop nuclear weapons. That is what they did. You can test those weapons. That is what they did. You can build a nuclear arsenal in defiance of United Nations resolutions and international sanctions. After testing, 10 years later, all will be forgiven, and you will be welcome into the club of nuclear powers without ever having signed the nonproliferation treaty.

Let's understand what this does. First, let me say that never has something of such moment and such significance and so much importance been debated in such a short period and given such short shrift: one very brief committee hearing in the Senate and a total of a couple of hours here on the Senate floor today; pretty disappointing.

What this agreement says is, India needs various kinds of equipment and technology to produce and build nuclear powerplants. They need more power, and they want to get it from nuclear powerplants. They have been prevented from accessing the kind of material and equipment to produce those plants because they have not signed the nonproliferation treaty, and they developed nuclear weapons outside of the purview of all of us, misusing American nuclear technology to secretly develop these weapons. Now we have said in an agreement with them, yes, we will allow big companies now to sell you this technology--this is all about big companies being able to access a new marketplace for technology, to sell the technology and the capability to develop nuclear powerplants-- we will allow you to do that, and we will have the opportunity in this agreement for you to put eight of your plants behind a curtain that will have no international inspections, which is a green light to say, you may produce additional nuclear weapons.

That is not just a supposition. Almost everybody understands that is going to happen. This agreement does not prohibit them from nuclear tests in a way that would nullify the agreement, if they do test. The Administration's interpretation of this agreement is very ambiguous about that.

I want to go through a couple of points. India would have unlimited ability to import fuel for 14 civilian powerplants under this agreement. That is what they want. They want to produce additional power with nuclear plants. Then it says India could have eight other power reactors behind a curtain that we will not be able to inspect. India can then divert its entire domestic fuel supply to eight military reactors to produce additional nuclear weapons.

What does that mean? It is our agreeing that India, that has never signed the nonproliferation treaty and has tested nuclear weapons and developed nuclear weapons in secret using our technology, is now given an agreement that allows them to build more nuclear weapons. Their neighbor is Pakistan, also possessing nuclear weapons. Pakistan warned the international community yesterday that a deal allowing India to import United States atomic fuel and technology could accelerate the nuclear arms race between India and Pakistan. India and Pakistan have fought three wars since independence from Britain in 1947 and, through a peace process, have stabilized relations since 2004, but they remain deeply distrustful of each other. We have now reached an agreement that says one of them may begin to produce additional nuclear weapons.

UPI--Islamabad, Pakistan: Without naming sources, the Press Trust reported Wednesday that the Pakistani Prime Minister has reported construction of two nuclear powerplants with Chinese assistance. The move appears aimed at counterbalancing a nuclear fuel deal negotiated with India. The decision was made on September 19 in Islamabad. The point is, we will allow you to put eight reactors behind a curtain. We will allow you to produce additional nuclear weapons that we won't know about. Is there a reaction to that? Pakistan has a reaction, to engage with the Chinese.

The United States had agreed that the purpose of the agreement was not to contain India's strategic program but to enable resumption of full civil nuclear energy cooperation. So that is the India separation plan. That is what they say. They say the United States and India agreed the purpose of the agreement is not to constrain India's strategic program. That means they say the agreement is to not constrain India's ability to produce nuclear weapons. That is what that means.

I am going to offer an amendment today that the managers will oppose. The conferees believe there should be no ambiguity regarding the legal and policy consequences of any future Indian test of a nuclear explosive device. That is from a joint statement of the conference of the Hyde Act which passed the Congress. There should be no ambiguity. Here is what the Administration says it thinks the agreement provides: Should India detonate a nuclear explosive device, the United States has the right to cease all nuclear cooperation. Well, we know we have the right. Are we going to do it? No. That is deliberate ambiguity to say if India were to test a nuclear weapon, there is nothing that will require us to decide to nullify this agreement.

Let me say again, the India Prime Minister says the agreement does not in any way affect India's right to undertake future nuclear tests, if necessary.

This is a planet with 25,000 nuclear weapons, tactical and strategic. The suspected loss or stealing of one caused an apoplectic seizure in October of 2001. We have 25,000 of them. Our job as an international leader, a world leader, our job is to begin marching back from the abyss; that is, to reduce the number of nuclear weapons. Instead we are taking apart the basic architecture of nuclear nonproliferation that has served us for many decades. We are saying to India, who has never signed the nuclear nonproliferation treaty, it is OK if you produce additional nuclear weapons we can't see and we don't know about. We are going to sign an agreement that allows you to do that. That is almost unbelievable.

India is a very important trading partner. India is a very important ally for our country. I believe that. I accept that. But this administration and those in the Congress who have agreed to the measure before us today are making a grievous mistake. We will not have second chances with respect to this issue of nuclear weapons. If we don't provide the world leadership to begin marching back from the prospect of terrorists using nuclear weapons, the prospect of nuclear weapons being stolen and developed by terrorist organizations, we will one day wake up and tragically read that a nuclear weapon was exploded in a major city on this planet. This agreement marches in exactly the wrong direction. Do you think this agreement allowing India to produce additional nuclear weapons has no impact on Pakistan, has no impact on China, has no message to the rest of the world? The message is: You can misuse American nuclear technology and secretly develop nuclear weapons. You can test those weapons. You can build a nuclear arsenal in defiance of United Nations resolutions, and

you will be welcomed as someone exhibiting good behavior with an agreement with the United States. What kind of message is that? What message does that send to others who want to join the nuclear club who say: You have nuclear weapons, we want some.

If we don't find a way to begin systematically reducing the number of nuclear weapons and stop the spread of nuclear weapons and try to find every way to prevent a nuclear weapon from ever again being exploded in anger on this planet, one day we will ruefully regret what we have done here.

Again, let me close by saying that never in my life has such a large issue been given such short shrift. This issue has great consequences for this country, the world, and their respective futures for that matter, and this administration is, in my judgment, making a very serious mistake.

Mr. President, how much time remains?

Mr. President, I yield the floor.

Mr. President, I say to the Senator from Connecticut, I am waiting for the Senator from New Mexico to come to the floor. What we are going to do is we are going to combine our two amendments.

We will still wish to take the 30 minutes each, but we will combine the two amendments and have a vote on one amendment, provided, of course, that meets unanimous consent. But I will, in a few moments, be ready to consume my half hour on this subject if that is your desire. I want to wait for Senator Bingaman to come in order to consult. He should be here momentarily.

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

Mr. President, Senator Bingaman and I will be combining our amendments into a Dorgan-Bingaman amendment, with other cosponsors, and that is now being put together by legislative counsel. So we will have that here briefly. But why don't I proceed with my 30 minutes. I think Senator Bingaman will have 30 minutes. Then apparently there is going to be a response following that, and we will conclude a portion of this debate.

So, Mr. President, on the 30 minutes I now have available, let me read to my colleagues something written by Graham Allison. Graham Allison is someone who has been involved in nuclear nonproliferation with the Clinton administration. He wrote this in a book, and this, by the way, is published in an article. I want to read it. I will quote it:

One month after the terrorist assault on the World Trade

Center and the Pentagon, on October 11, 2001, President

George W. Bush faced a more terrifying prospect. At that

morning's presidential daily intelligence briefing, George

Tenet, the director of central intelligence, informed the

president that a CIA agent codenamed ``Dragonfire'' had

reported that Al Qaeda terrorists possessed a 10-kiloton

nuclear bomb, evidently stolen from the Russian arsenal.

According to Dragonfire, this nuclear weapon was in New York

City.

Continuing to quote:

The government dispatched a top-secret nuclear emergency

support team to the city. Under a cloak of secrecy that

excluded even Mayor Rudolph Giuliani, these nuclear ninjas

searched for the bomb. On a normal workday, half a million

people crowd the area within a half-mile radius of Times

Square. A noon detonation in Midtown Manhattan would kill

them all instantly. Hundreds of thousands of others would die

from collapsing buildings, fire and fallout in the hours

thereafter.

Continuing to quote:

In the hours that followed, Condoleezza Rice, then national

security adviser, analyzed what strategists call the

``problem from hell.'' Unlike the Cold War, when the US and

the Soviet Union knew that an attack against the other would

elicit a retaliatory strike of greater measure, Al Qaeda--

with no return address--had no such fear of reprisal. Even if

the president were prepared to negotiate, Al Qaeda has no

phone number to call.

Again, continuing to quote:

Concerned that Al Qaeda could have smuggled a nuclear

weapon into Washington as well, the president ordered Vice

President Dick Cheney to leave the capital for an

``undisclosed location,'' where he would remain for weeks to

follow--standard procedure to ensure ``continuity of

government''. . . .

Six months earlier the CIA's Counterterrorism Center had

picked up chatter in Al Qaeda channels about an ``American

Hiroshima.'' The CIA knew that Osama bin Laden's fascination

with nuclear weapons went back at least to 1992, when he

attempted to buy highly enriched uranium from South Africa. .

. .

As CIA analysts examined Dragonfire's report and compared

it with other bits of information, they noted that the

September attack on the World Trade Center had set the bar

higher for future terrorist attacks. . . .

As it turned out, Dragonfire's report proved to be a false

alarm. But the central takeaway from the case is this: The US

government had no grounds in science or logic to dismiss this

possibility, nor could it do so today.

Now, think of that. That is a discussion about one low-yield 10 kiloton nuclear weapon allegedly stolen from the Russian stockpile, smuggled into New York to be detonated by terrorists--one nuclear weapon. There are 25,000 on this Earth. One small weapon caused an apoplectic seizure about the prospect of hundreds of thousands of people being killed.

What does that have to do with this? Well, what it has to do with this is we have struggled since the end of the Second World War to try to put a cap on the bottle here and make sure a nuclear weapon is never again exploded in anger--not by a military power, not by a terrorist group. We have tried to prevent the spread of nuclear weapons. We have tried to see if we could find a way to reduce the number of nuclear weapons. We have created something called the Nuclear Non-Proliferation Treaty, the NPT. We have created something called the Nuclear Test Ban Treaty, which I regret to say our country has not ratified. But we have tried to find ways to stop the spread of nuclear weapons, stop the building of additional nuclear weapons.

One of three countries that did not sign the Nuclear Test Ban Treaty was India. They refused to sign it. In these intervening years, what we have discovered about India--a respected ally of ours, a trading partner of ours, a country we hold in high esteem--we have discovered that they misused American nuclear technology to secretly develop their own nuclear weapons. We have discovered that they tested those nuclear weapons. They have defied the United Nations resolutions and international sanctions.

Now we have discovered that an agreement has been reached with the Government of India that all will be forgiven. We will sign a new agreement with you--that I believe unwinds and undoes the entire architecture of nonproliferation of nuclear weapons. All will be forgiven. In fact, what we will do is we will say to you that you can create nuclear powerplants because you need nuclear power, and our corporations and international corporations can sell--this is about business, a lot of business--can sell to you the technology and the construction materials to produce nuclear powerplants. And, oh, by the way, the agreement also says you can have eight nuclear powerplants that are behind a curtain that will never be inspected by international inspectors. That is where you can produce additional nuclear weapons, which the Indian Government wishes to do.

This agreement is an unbelievable mistake. At exactly the moment when this country should exhibit its leadership, its world leadership that is required of this country to not only stop the spread of nuclear weapons but to begin marching back to reduce the number of nuclear weapons, at this exact time, this Government, this administration and this Congress, is saying to an ally: We will give you the green light to produce more nuclear weapons even though you have never signed the nonproliferation treaty. That is almost unbelievable to me.

The nonproliferation treaty prohibits peaceful nuclear assistance to so-called nonnuclear states unless they agree to put all their facilities under international safeguards and give up the option of producing nuclear weapons. With this agreement, we say that does not matter anymore. It does not matter. You do not have to subject these eight plants to international safeguards. You do not have to give up the option of producing nuclear weapons.

The five traditional nuclear powers in the post-Second World War period--Russia, the United States, Britain, France, and China--all have signed the nonproliferation treaty. All other countries are considered to be nonnuclear states according to the nonproliferation treaty.

Article I of the NPT obligates the recognized nuclear weapon states, including the United States, ``not in any way to assist, encourage, or induce any non-nuclear weapons State to manufacture or otherwise acquire nuclear weapons. . . .'' With this agreement, we have decided that does not matter. We have no intention to pay attention to Article I any longer.

Section 128 of the Atomic Energy Act requires all states other than the five I mentioned to have full-scope safeguards as a prerequisite for receiving U.S. civil nuclear exports. That does not matter anymore.

Section 129 of the Atomic Energy Act requires the termination of nuclear exports if a nonnuclear weapon state has, among other things, tested nuclear weapons after 1978. We have said that does not matter anymore.

Section 102 of the Arms Export Control Act requires sanctions on any nonnuclear weapon state that has detonated a nuclear device. That doesn't matter anymore. The United Nations Security Council resolution 1172 condemned India and Pakistan's 1998 nuclear tests. The United States-India agreement says that none of these provisions will be applicable to India anymore, even though it secretly used our technology to develop nuclear weapons and then tested them.

Now, a working nuclear bomb can be produced with as little as 35 pounds of uranium 235 or 9 pounds of plutonium 239. I think nuclear terrorism and the threat of nuclear terrorists gaining access to nuclear weapons represent the gravest security threats to our Nation, bar none.

Retired GEN Gene Habiger, who commanded America's nuclear forces, has said that nuclear terrorism ``is not a matter of if; it is a matter of when.''

In 2006, Henry Kissinger wrote in the Washington Post:

The world is faced with the nightmarish prospect that

nuclear weapons will become a standard part of national

armament and wind up in terrorist hands.

It will become a standard part of armament for countries, because they want to possess it, and it will inevitably end up in terrorist hands.

Former Senator Sam Nunn wrote in the Wall Street Journal:

We know that terrorists are seeking nuclear materials--

enriched uranium or plutonium--to build a nuclear weapon. We

know that if they get that material they can build a nuclear

weapon. We believe that if they build such a weapon, they

will use it. We know terrorists are not likely to be

deterred, and that the more this nuclear material is

available, the higher the risks.

We know Osama bin Laden has been seeking the opportunity and the materials to build nuclear weapons since the early 1990s. In 1998, Osama bin Laden issued a statement titled ``The Nuclear Bomb of Islam,'' declaring:

It is the duty of Muslims to prepare as much force as

possible to terrorize the enemies of God.

I described the book entitled ``Nuclear Terrorism'' written by Graham Allison, an official in the Clinton administration who worked on these issues: The potential stealing of one low-yield weapon terrorizing the country and a city.

Nowhere is the threat of nuclear terrorism more imminent than in South Asia. It is home to al-Qaida, which is seeking nuclear weapons. It is an area where Pakistan and China and India have always had tense relations. All three possess nuclear weapons. India and China fought a border war in 1962. India and Pakistan have fought three major wars and had two smaller scale contests. Both detonated nuclear explosions in 1998 and declared themselves a nuclear power. After that, the world held its breath while India and Pakistan fought a limited war in Kashmir. India is thought to have a modest cache of nuclear weapons at this point. You can go to the journals and get estimates of 25 to 50 or 60 nuclear weapons, but India wants more.

It seems to me that to do this in the absence of an understanding of what it means in the region, and in the absence of what it means to unravel the regime by which we have tried to move toward nonproliferation of nuclear weapons is a dangerous step.

I wish to describe something The New York Times wrote yesterday, and I fully agree: President Bush and his aides were so eager for a foreign policy success they didn't even try to get India to limit its weapons program in the future. They got no promise from India to stop producing bomb-making material, no promise not to expand its arsenal, and no promise not to resume nuclear testing. The Senate should postpone action until the next Congress can figure out how to limit the damage from this deal.

I fully agree with that. I don't have any understanding why we are rushing--with one short hearing before one committee in this Congress-- to a short, truncated version on the floor of the Senate, and then agreement.

Here is the agreement: India would have unlimited ability to import fuel for 14 civilian nuclear powerplants, and it could then divert all of its current domestic fuel supply to 8 military reactors which are used for nuclear weapons production, with no international inspection at all.

If anyone thinks this makes sense for our country, I think there is something wrong with that thinking.

Will it have a consequence with respect to Pakistan? I expect so. Pakistan warned the international community in July that a deal allowing India to import United States atomic fuel and technology could accelerate a nuclear arms race between Delhi and Islamabad. They have fought substantial wars before, as I said.

So what does Pakistan do? They go off and they will seek nuclear fuel assistance from China to build 10 nuclear powerplants. Will they be inspected? The move appears aimed at counterbalancing a nuclear fuel deal negotiated this year between India and Western suppliers.

Paragraph 5 of the India separation plan says: The United States and India--this is India's portion of the agreement--had agreed that the purpose of the agreement was not to constrain India's strategic program.

That is a fancy way of saying their understanding is we are not constraining their ability to produce additional nuclear weapons.

Now, the Hyde Act passed the Congress and allowed this negotiation to take place. I didn't vote for it. I was one of a minority who didn't vote for it because it had some huge holes in it, but here is what the conferees said:

The conferees believe there should be no ambiguity

regarding the legal and policy consequences of any future

testing of a nuclear explosive device by India.

That is what they said. Here is how the Administration interprets the agreement that is on the floor of the Senate:

Should India detonate a nuclear explosive device, the

United States has the right to cease all nuclear cooperation

with India.

We already have that right. But is that ambiguous? It surely is. The Administration doesn't say we are going to shut down or nullify this agreement; it says we have the right to.

The proposition of the Hyde amendment that passed the Congress said it should be unambiguous. No ambiguity. Yet the Administration is deliberately being ambiguous so that if India tests a nuclear weapon, that country may still not be subject to sanctions.

The BJP, which may be India's next ruling party, says:

The BJP would like to clearly reiterate that any compromise

on India's right to nuclear test is wholly unacceptable.

Finally, the agreement does not in any way affect India's

right to undertake future nuclear tests, if necessary.

This last statement was from the Prime Minister of India. Do we need to say more about what might or might not be here?

Senator Bingaman and I are offering an amendment, the Dorgan-Bingaman amendment, with a good number of cosponsors, that makes clear two things. No. 1: If India would test, it would nullify this agreement with respect to United States cooperation. No. 2: Senator Bingaman has added--and we are

putting them together--if India were to test a nuclear weapon, the export controls we can enact to deal with other suppliers around the world and their dealings with India should be fully utilized.

Let me go back to where I started for a bit. Probably all of my colleagues have been in the same discussions. I hear people say nuclear weapons are like any other weapon. I hear people say nuclear weapons are usable. I hear people say we need to build new nuclear weapons here in our country. We need to build bunker-buster weapons, nuclear weapons that can go under and bust some caves; Earth-penetrating bunker-buster weapons. Designer nuclear weapons. We have all heard it. This administration has wanted to build new designer nuclear weapons.

Some believe a nuclear weapon is like any other weapon. It is not. It can never be used. To the extent and when it is used, if it is used by a terrorist group or country, nothing on this Earth will be the same.

It was different in the 1940s. The last time a nuclear weapon was used in anger, outside of tests, was to end the Second World War. Then virtually no one else had nuclear weapons. Now we have nuclear weapons spread around this globe. This country has assumed the responsibility for many years--the mental responsibility to try to stop the spread of nuclear weapons. It is a desperate attempt to say: You know what. The only way this planet is going to continue is if we stop the spread of nuclear weapons. Does anybody think if people start lobbing nuclear weapons back and forth, killing millions of people, that this planet survives? I don't. We have 25,000 of them on this planet, and we are going to sign up to an agreement today that says let's produce more? Not us, although we have people here who want to produce more in this country. This says let India produce more in secret. What does that mean to Pakistan? What does that mean to China? What does that mean to that South Asian region? What does it mean to the world?

This is such a truncated debate and such a shame. There are a lot of very interesting, qualified, serious people who ought to be weighing in on this to describe what we are doing here today in terms of the consequences to this planet. What are the consequences to the regime that has existed for many years--five or six decades now--to try to stop the spread of nuclear weapons?

I had a hearing one day in my appropriations subcommittee, because we fund the nuclear weapons portion of the appropriations process in the Department of Energy. In that hearing, someone described the fact that the last time a nuclear weapon was used in a conflict was in 1945, and it has been all of these decades--all of these decades--that we have constrained the use of nuclear weapons. The Soviets and the U.S. built massive stockpiles of nuclear weapons under a doctrine called Mutually Assured Destruction, believing that if either attacked the other, the retaliation would essentially destroy both. The original attack would inflict massive damage on the country that was attacked, but the country that was attacked would also retaliate in a manner that virtually obliterated the attacking country. So that mutually assured destruction represented a standoff during the Cold War with the Soviet Union.

In the meantime, other countries aspired to become nuclear weapons powers, to obtain nuclear weapons, and to this day not only do many countries still desire these things, but now terrorists do as well. So the question is, Who is going to step us back from this cliff? We have a former Secretary of Defense who believes there is about a 50-percent chance that a nuclear weapon--I believe he said a 50-percent chance-- will be exploded in a major city within 10 years. I don't doubt that could be the prospect if we don't use all of our energy and all of our leadership capability as a leading nuclear power in this world--a nuclear weapons power in this world--to try to march back from 25,000 nuclear weapons to far fewer nuclear weapons; to try to put up walls by which we will not allow people or countries to proliferate nuclear weapons.

We have a man in Pakistan who is under house arrest, and has been for a long while, Mr. A. Q. Khan, who apparently is a national hero of sorts in Pakistan. He spread nuclear secrets all around the world for money. Our country has never even been able to interview him, to talk to him, to understand where these secrets went. As I said, he is not in prison, he is under house arrest. He is still considered a hero by some.

We have to get serious about this issue of the proliferation of nuclear weapons. We are not getting serious about an issue such as this by dismantling the very structure that has helped us now for some 60 years to prevent the spread of nuclear weapons or at least prevent the use of nuclear weapons.

In the Appropriations Committee hearing I described earlier, I said: We have been lucky, and someone said: Well, it is much more than luck. I said: I agree it is more than luck. It is a regime, it is a structure of nonproliferation that we have worked on. Many administrations worked seriously in this area.

This administration, regrettably, appointed people to positions of authority on nuclear nonproliferation who didn't believe in the mission. They didn't even believe in the mission. The question for us now is: Is this the way forward, to take apart the structure?

When I said we have been lucky, what I meant was that the structure has certainly helped, but we are going to need more than that. We are going to need some good fortune. If we think we can live on a planet with 25,000 nuclear weapons, that somehow, some way, some day, somebody is not going to steal one and detonate it in a major city--we have to be serious about this.

India is a wonderful country. India is an ally of ours. It is an ally of the United States. But that should not justify our deciding to give a green light to India--a country which has never signed the nonproliferation treaty--give the green light to produce more nuclear weapons. That is exactly what this agreement does. No one can stand up in this discussion and say: This agreement doesn't allow a country that has refused to sign the nonproliferation treaty, this agreement does not allow them to produce more nuclear weapons. It does on its face, and everybody knows it. Everybody wants to pretend as though it doesn't exist.

This is a horrible mistake. I am enormously surprised, after so many decades of people talking and thinking seriously about nuclear nonproliferation, that we reward those countries that misuse nuclear technology in order to secretly produce nuclear weapons and secretly test nuclear weapons. We now say to them: By the way, here is your reward, an agreement by which you can continue to do it; an agreement which is written in a way that says we will allow you to produce more nuclear weapons and, oh, by the way, if you test, we won't even put in the agreement that we will nullify it. An agreement we might nullify. We ought to put in the agreement, ``We will,'' which was promised in the conference report.

So maybe I am not capable of understanding the world view of some that allowing an ally of the United States, that has not signed the nonproliferation treaty, to produce additional nuclear weapons is somehow strengthening our country or the world or is good for us. Maybe I missed something, but I don't think so. I think what is missing is the logic and the commitment to nonproliferation of those who negotiated this. What is missing is the determination and the relentless effort by this country to lead in the direction of reducing the number of nuclear weapons and not allowing the production of more.

Mr. President, I yield the remainder of my time. How much time do I have remaining?

I reserve the remaining 5 minutes.

Mr. President, providing a $700 billion financial rescue plan without requiring reform and regulation of the financial markets is a serious mistake. That is exactly what this legislation does.

I believe that we are in an economic crisis that does require a response by Congress.

But it cannot be a response that commits the American taxpayers to a large

rescue fund for many of America's biggest financial institutions while still leaving in place unregulated financial markets that allowed this financial crisis to happen.

Despite my best efforts there is nothing in this legislation that will require the regulation of the very financial markets that have, in recent years, helped create a casinolike atmosphere with large financial institutions exhibiting unprecedented greed in search of short-term profits and big bonuses that knew no bounds.

I will not vote for a plan that I believe fails to address the central cause of this crisis: unregulated financial markets that hide the unbelievable speculation and reckless investments by some major financial institutions whose losses are now being loaded on the backs of the American taxpayers. Those financial markets must be regulated now!

In 1999 when Congress debated a large deregulation bill titled the Financial Modernization Act, I was one of only eight Senators who voted no and I warned then in Senate debate that ``this bill will also raise the likelihood of future massive taxpayer bailouts.'' I wish I had been wrong.

Nine years later we are considering a ``massive taxpayer bailout'' plan that provides no regulation of the hedge funds and derivative trading that has caused much of the financial wreckage in our economy.

The plan also fails to restore the protections that were removed in the Financial Modernization Act to separate FDIC insured bank operations from the risky speculative investments in real estate and securities.

Under this plan the creation of exotic securities that are traded in financial darkness by unregulated hedge funds and other institutions can continue. It is estimated that there is a notional value of more than $60 trillion of credit default swaps in our economy. No one knows where they are, whose balance sheets they may threaten, or how much additional risk they pose to financial firms. Yet, I was told this plan could not require regulation and transparency of these financial markets because there was opposition in Congress and the White House. That is not a satisfactory answer for me. And I don't believe it is satisfactory to the taxpayers.

The legislation contains some provisions that I strongly support. I believe we should increase the FDIC insurance to $250,000 per account. I also strongly support the tax extenders and the tax incentives for renewable energy.

But in the end, if this plan is about restoring confidence, the failure to include reform and regulatory measures along with the money is a fatal flaw that I believe will end up hurting our country.

The following are the six steps I called for including in the financial rescue plan. While there was some improvement in the plan along the way, it fails to do what I think is necessary to protect both the economy and taxpayers.

1. Restoring the stability and safety of the banking system by re- creating protections of the Glass-Steagall Act, which prohibited the merging of banking businesses with riskier investments. That post- Depression Era protection served us well for seven decades before its repeal.

2. Addressing the wildly excessive compensation on Wall Street, which has incentivized reckless behavior. In recent years, Wall Street has doled out more than $100 billion in bonuses to the very people who have steered us into this mess, including more than $33 billion in each of 2007 and 2006.

3. Developing a system of regulation that would require accountability for the speculative investment activities of hedge funds and investment banks that create and sell complex securities.

4. Providing for a period of forbearance on mortgages where homeowners could continue to pay mortgages at a set rate.

5. Creating a Taxpayer Protection Task Force that would investigate and claw back ill-gotten gains. This would be targeted at individuals and firms that profited from creating and selling worthless securities and toxic products. Despite the fact that this practice caused the current economic crisis, many of these individuals and firms now seek to benefit from a Government bailout.

6. Making sure that U.S. taxpayers get to share in the increased values, not just the burden of risk, of the firms they are bailing out.

Mr. President, the amendment I and Senator Bingaman have offered is to the India nuclear agreement. We both feel it is a flawed agreement that would result in the production of additional nuclear weapons on this planet, exactly the last thing we need. But I understand--and I think Senator Bingaman understands--that this Senate will likely approve this agreement by a wide margin this evening.

Our amendment is relatively simple. It says that if India tests nuclear weapons, this agreement is nullified and we work to try to shut off supplies from the other supplier groups. The last thing we ought to allow is to have India begin testing nuclear weapons without consequence to the agreement that has been negotiated with India. Once again, let me point out that this agreement, I believe, will result in the production of additional nuclear weapons on this planet--the last thing we need.

Our amendment is a very important amendment dealing with the prohibition of nuclear testing, and we hope our colleagues will be supportive.

I ask unanimous consent that Jon Cary, a legislative fellow in my office, be allowed the privilege of the floor during debate on H.R. 7801.

Madam President, are we in a period of morning business?

Madam President, I wish to talk about what is happening in the economy, the consequences, a bit about what happened yesterday, and what I think we should do going forward.

Yesterday, as most Americans now know, the stock market had a very significant down day--777 points down. Today it is up over 300 points as I speak.

We have gone through a very difficult time for a long period of time in this country. I wish to talk about the causes of it and the consequences of it. I am not going to, as some do, come to the floor to describe one party or another that is responsible for this or that. I don't think that is particularly helpful today. But I do wish to say that, tracking back to a couple of significant events--one in 1999 when the Congress, without my support, passed a piece of legislation that essentially repealed what is called the Glass-Steagall Act. This legislation was put in place by Franklin Delano Roosevelt during the Great Depression to protect banks and depositors by separating banks from riskier enterprises of real estate and securities--I pulled out some of Franklin Delano Roosevelt's radio addresses.

Here is an address he made in 1933. As my colleagues know, this is a President who had to confront the Great Depression, and here is what he said:

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

shown themselves either incompetent or dishonest in their

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

entrusted to them in speculations and unwise loans. This was

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

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

into a sense of insecurity . . . It was the government's job

to straighten out this situation and do it as quickly as

possible . . . After all, there is an element in the

readjustment of our financial system more important than

currency, more important than gold, and that is the

confidence of the people. You people must have faith; you

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

at banishing fear. We provided the machinery to restore

our financial system. It is up to you to support it and

make it work.

That was Franklin Delano Roosevelt in 1933. In 1934, he said this:

The second step we have taken in the restoration of normal

business enterprise has been to clean up thoroughly

unwholesome conditions in the field of investment. In this we

have had assistance from many bankers and businessmen, most

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

the sale of securities, in the deliberate encouragement of

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

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

saw that without changes in the policies and methods of

investment there could

be no recovery of public confidence in the security of

savings.

Sounds a little like today, although Franklin Delano Roosevelt then took very aggressive steps to say we are going to separate banking from risk. You are no longer going to be able to have an FDIC-insured deposit institution called a bank and merge it with the speculation in real estate and securities. You just cannot do it. The Congress passed, at the President's request, something called the Glass-Steagall Act. That lasted for nearly 80 years, until 1999, when it was repealed.

There was a story this morning in a Wisconsin newspaper quoting me and quoting my late colleague, Paul Wellstone, who sat at the end of that row. We both spoke on the Senate floor. There were eight of us who opposed the Financial Modernization Act, they called it, because they always wrap bad things in good names. The Financial Modernization Act, what a misnamed act, but it repealed the Glass-Steagall Act. It set the stage for large financial holding companies. It set the stage for banks to be engaged in more risk. They said: We have to do this to move forward. Senator Phil Gramm actually led the charge. Gramm-Leach-Bliley was the name. Modernization they called it.

Some of us said it was going to be an unbelievable debacle. Here are a couple things I said when it passed the Senate the first time:

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

the deposits guaranteed by the American people.

Further, I said on the same day on the floor of the Senate:

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

future massive taxpayer bailouts.

I wish I had been wrong. I take no joy in being right.

When the bill came back in November as a conference report and eight of us voted against it in 1999, I said:

Fusing together the idea of banking, 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 . . .

Then I said on the same day in November 1999 before the vote:

We will in 10 years time look back and say: We should not

have done that

Repeal Glass-Steagall--

because we forgot the lessons of the past.

What did we allow to happen as a result of all of this? We have seen today a substantial amount of activity as a result of the collapse on Wall Street and in the banking industry. Here are just a few of the actions most recently. J.P. Morgan decided to buy Bear Stearns because Bear Stearns was going to go belly up. And over a weekend, they worked, and the Federal Reserve Board and the Secretary of Treasury said the taxpayers will put up $29 billion so that J.P. Morgan can buy Bear Stearns so Bear Stearns doesn't have to go belly up.

I was looking in the Wall Street Journal today, and there is something about Bear Stearns. It is kind of interesting because it relates to what I am going to talk about in a whole range of these areas. It relates to something I call ``dark money.'' That is a massive amount of money, essentially like money in a casino, that is moving around speculating that no one can see, no one knows who has it, where it is, how much it is.

This article is entitled ``Too Much Money Is Beyond Legal Reach,'' from the Wall Street Journal. It talks about the ``$1.9 trillion, almost all of it run out of the New York metropolitan area, that sits in the Cayman Islands, a secrecy jurisdiction. And another $1.5 trillion is lodged in four other secrecy jurisdictions.''

Then they say:

Most recently, two Bear Stearns hedge funds, based in the

Cayman Islands, but run out of New York, collapsed without

any warning to its investors. Because of the location of

these financial institutions--in secrecy jurisdiction,

outside the U.S. safety net of appropriate supervision--their

desperate financial condition went undetected until it was

too late.

You run the dark money through hedge funds, through Bear Stearns, through the Cayman Islands, it all goes belly up, no one even knows it is there. Then we have to find in a weekend that the American taxpayers should put up $29 billion so that J.P. Morgan can bail out a failed Bear Stearns.

Madam President, $300 billion immediately following that was available to investment banks that are unregulated because the Federal Reserve Board said: Investment banks can come to our loan window and get loans directly from the Federal Reserve Board. Never in the history of this country has that been allowed. Only FDIC-insured regulated banks could do that. It is estimated that $300 billion in direct loans from the window of the Federal Reserve Board went out to unregulated Wall Street firms.

Then bailing out Freddie and Fannie. J.P. Morgan Chase in Lehman financing. They have been around since the Civil War and went belly up through bad investments. AIG, the insurance company, goes belly up, and so there is an $85 billion loan provided by our Government to prevent their failure. Why did they fail? We are told a small unit in England with about 375 employees were engaged in something I will talk about in a bit, credit default swaps, which is essentially a huge gamble, and it pulled that whole company down, so the Federal Government had to bail them out with $85 billion. And $50 billion has now been pledged as guarantees for certain money market funds.

In recent days, Washington Mutual, a big bank, had to be taken over. Then in more recent days we have had Wachovia bank subsumed.

Here is what is happening. We have all these financial institutions we are told are too big to fail, which means we guarantee them. The Federal Reserve Board has a list of firms too big to fail. They are apparently not too big to regulate, just too big to fail, so the American taxpayer has to guarantee it.

Here is what has happened as a result. Bank of America buys Merrill Lynch. Washington Mutual is put on top of J.P. Morgan Chase. Citigroup, yesterday, buys Wachovia. What we have done is continued to consolidate even bigger and bigger firms. These three firms comprise almost one- third of all the banking activity in America now. Too big to fail? What is the answer? Make them bigger. It doesn't make any sense to me, but that is exactly where it is going.

Let me describe what I think is no-fault capitalism. You have all this dark money, and what has happened is you have had all of these fancy financial engineers who have concocted in recent years since 1999--since the shackles were taken off to do whatever they want, by and large, and since this administration came to town bragging it wasn't going to regulate. We hired the regulators, paid the regulators, but they boasted they were not interested in regulating anything.

I am quoting Steven Pearlstein who wrote a terrific piece on this earlier this year:

Wall Street has been brilliant at dreaming up other

financial innovations that picked up where junk bonds left

off. These included complex futures and derivatives

contracts; loan syndication; securitization; credit default

swaps; off-balance-sheet vehicles; collateralized debt

obligations . . .

And on and on.

What happens is this financial engineering that was so brilliant put everybody at risk--everybody. He says junk bonds were the first. I know something about junk bonds because I am the person who passed the legislation that brought down that market on junk bonds when, in fact, Michael Milken, sitting in his car in the morning riding as a passenger, going to work at Drexel Burnham, was wearing a miner's hat with a lamp on it so he could study his financial sheets. What he was doing is creating junk bonds and parking them in federally insured institutions.

The hood ornament of the excess back in those days was that the American taxpayers eventually ended up having to own and take possession of nonperforming junk bonds in one of America's largest casinos. Think about the stupidity of all that. I passed the legislation that shut that down, so I know about those excesses.

Now we have credit default swaps and CDOs and so many other exotic instruments and, by the way, so complicated that a lot of people don't even know what they are. Even those who have issued them cannot very easily understand them. What they have done is been able to hide risk, liabilities and losses from investors. ``They have given traders a greater ability to secretly manipulate markets,'' Mr. Pearlstein says, and I agree.

Let me talk about this chart, the no-fault capitalism portion.

Merrill Lynch went belly up. What did the CEO of Merrill Lynch make last year? He made $161 million for running a company that got into trouble and had to be purchased. I don't understand.

John Mack, Morgan Stanley--they got into trouble--$41 million compensation last year.

Bear Stearns, the first company I mentioned, we had to arrange the purchase, the American taxpayers had to put up $29 billion to guarantee it, and the CEO of Bear Stearns made $34 million last year.

Lehman Brothers went belly up. The CEO made $22 million last year.

Washington Mutual went belly up. The CEO made $14 million last year. By the way, they just had a new CEO, or did. He had been on the job 3 weeks and signed a contract for a $7 million bonus for signing and a $12 million termination fee. I understand that has been voided. But it just shows you the same money is ricocheting around in the halls of these firms.

AIG, Martin Sullivan--we had to bail out AIG he made $14 million last year.

The question is, Where is the discipline? There is so much money ricocheting around Wall Street from all of these issues, and now we are told they all went sour. There are toxic, mortgage-backed securities, and the American taxpayers somehow have to come up with the money.

Let me talk for a moment about hedge funds. Warren Buffett once called hedge funds ``financial weapons of mass destruction'' because of the damage they can do to Wall Street in an instant. I just talked about some $20 million, $160 million for folks running failed institutions. Let me talk about the big income earners. The big income earners were John Paulson. He was the top of the heap last year. John Paulson made $3.7 billion. That means when he came home from work and his wife said, How did we do this month, sweetheart? he said: Well, we made $300 million this month. Madam President, $3.7 billion. Or perhaps he would say to his spouse: I made $10 million today. That would be more accurate--$10 million a day. John Paulson was the top income earner last year.

How did he make that money? In a hedge fund he bet very big in the drop of housing values and made $15 billion for his hedge fund. By the way, he also hired former Federal Reserve Board Chairman Alan Greenspan as an adviser. Yes, that is the same Alan Greenspan who was content to be an observer as this housing bubble burst, as predatory lending existed, and all these exotic instruments and all those mortgages I will talk about in a moment were created and traded. Nothing really seems too wacky these days in the world of finance.

There are some wonderful and creative people who work in finance and who run America's corporations and, by the way, many of them are worth their weight in gold. But what I see here is a form of no-fault capitalism in which a substantial amount of money is paid to some who run these corporations right into the ground, run their financial firms right into the ground with unbelievably risky bets on credit default swaps, collateralized debt, in which they back their balance sheet with risk, in some cases even move it offshore to tax haven countries at unbelievable risks, and then the American taxpayers are told: You know what. It didn't work very well, and you need to pay for it.

Let me go through the roots of this situation. I have done this many times. But as people sit on the edge of the chair watching what is happening to the Dow Jones Industrial Average today, they need to understand what is the root rot that exists out there, what is spoiled and rotten at the bottom. Let me describe what happened. It is not very complicated.

Almost every American has heard the radio and television ads over recent years: You know what you really need to do is get a better home mortgage, and we have one for you. We will give you a home mortgage where you get a 2-percent interest rate. Yes, that is right. Sounds unbelievable; it is not. We will give you a 2-percent interest rate on your home mortgage. We are not going to tell you, at least not very loudly, that it is going to reset in 3 years to 10 percent, but we can get you in at 2 percent. And by the way, home values are increasing. Get this loan at 2 percent, cut your monthly mortgage payment by two- thirds, and then, if 3 years from now you can't pay the reset mortgage, you can sell the house. Between now and then, you will make a lot of money anyway because home values are continuing to go up. That was the sales pitch.

So here is what happened all around this country. Here is Countrywide mortgage bank. They were purchased. They were run by a guy named Mozilo. He was given the Horatio Alger Award. Barron's named him one of the 30 most respected CEOs in America. In 2006, he made $142 million. As he was touting his company's stock, the New York Times reports he was selling $130 million of his company's stock, even as he was describing what a wonderful stock it was.

But here is what Countrywide said. They were advertising:

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

mortgage payments? Have you been denied by other lenders?

Call us.

That is their advertisement. If you have bad credit, call us. We will give you a loan. The biggest mortgage bank in the country, run by a CEO who made a fortune and then got out--and by the way, he got away with it--before the company went down.

But it wasn't only Countrywide. Here is what Millennia Mortgage said:

12 months, no payments. That's right, we will give you the

money to make your first 12 months' payments if you call in

the next 7 days. We will 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.

Here is a mortgage company saying, get a home mortgage from us and you don't have to make a payment for 12 months. They didn't, of course, say we are going to put that on the back end and that, ultimately, you will pay more for that home, and we are going to increase the interest rate.

Zoom Credit. I don't know who the CEO is or what he made, but here is what they said.

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 consolidations, too. Bankruptcy, slow credit, no

credit--who cares?

That is unbelievable, isn't it? So we had all these mortgages put out there, and we had a lot of people buying them, and here is what would happen. Countrywide would get a broker. They would sell somebody one of these mortgages--perhaps call them at home at night and say: You want to cut your home mortgage payment by two-thirds? We have a good deal for you. So they would go to Countrywide, they would securitize the loan, package them together with other loans into what is called a security, and then they would sell it upstream. They would put good loans in with bad loans, subprime with regular. They would cut them, slice them and dice them and hedge funds and investment banks and others would buy them. They didn't have the foggiest idea what they were doing. By the way, the rating companies were rating these as pretty good securities. So everybody was fat and happy and making lots of money.

Now, the result is that all these companies--and Wachovia is a good example because Wachovia was bought by Citigroup yesterday. Wachovia bought a company called Golden West about a year and a half ago, and Golden West was putting out these options mortgages. By the way, these are mortgages in which they advertise, we will give you a no documentation mortgage. You don't have to document your income. Or we will give you a no doc or low doc loan. No doc meaning you don't have to document how much money you make.

They also say that if you can't pay all your principal, that is okay. You can pay a part of the principal of the mortgage. Or you don't have to pay any principal, just pay interest. Or you don't have to pay any principal or all the interest, just part of the interest. Or with Millennia, you don't have to make any payments for the first 12 months. It got better and better and better. Why did they do that? Because they were locking people into bad mortgages--mortgages with teaser rates, very low, 2 percent in some cases, to be reset to a much higher rate

in 3 years--and then they would lock in a prepayment penalty so you could never get out of it. Or to get out you would have to pay a huge penalty. Then they would sell it upstream. As they sold it upstream, they would sell a security that promised a 10-percent interest rate in 3 years with a prepayment penalty so it was unlikely the person could get out of it, and that security then had a higher yield. All these folks were amazed that they were able to buy securities with such a wonderful rate of return.

In the meantime, of course, it all collapsed. Because all those securities got out there on the balance sheets of these companies buying these securities in the name of greed--big returns. Then it all turned sour and began to smell like rotten fish, lying out there on the balance sheets, these nonperforming assets. It all turned sour. It began to pull under companies that were unwise enough to make these investments, and they were companies all over the country.

I mentioned some of the ways they did it. This is describing part of it. No documentation loans, low documentation loans. Even as we talk about its impact on the economy, if you think this has stopped, it has not. There is a credit lockup in this country, they say. Probably so, in some areas. But I went to the Internet a couple days ago and I found, under a search for a no doc income loans, I found 325 different places on the Internet that provide these kind of home loans right now: No credit check. Bad credit loans.

It has not yet stopped. Here is part of what I found on the Internet.

Easy loan for you. Do you have bad credit? Get approved

today.

You can go find that on the Internet right now. Here is another one you can find on the Internet right now: speedybadcreditloans.com. Think of that. How unbelievably ignorant, speedybadcreditloans. When we face the crisis we now face because of this unparalleled greed and the toxic mortgage-backed securities that exist on the balance sheets of all these companies, threatening to bring down these corporations, and they are still selling them.

SpeedyBadCreditLoans. Bad credit, no problem. No credit, no

problem. Bankruptcy, no problem.

I think I have described what has put out a substantial amount of toxic investments throughout this country, which has caused unbelievable chaos not just in this country but across the world. I think there are a number of things we ought to do.

I know the discussion yesterday was about a $700 billion bailout, or rescue fund, that did not survive in the House of Representatives. I hope now those who are going to put together some changes to that plan--I assume there will be some changes, and I do support some of the discussion today about increasing the size of bank accounts that are FDIC insured from $100,000 to $250,000. If we had changed that over time for the value of money, it would be well over $200,000 now. So I believe it would be useful and provide some confidence to provide that additional insurance to a $250,000-per-account level. But I strongly feel that a couple other things have to be done.

We can't let this moment pass, and we can't have this economy in peril because of the greed and the avarice of some who decided to take dramatic risks and to gamble with other people's money. We can't do that. We can't proceed without deciding we are going to regulate hedge funds and regulate the trading of derivatives. We cannot do it. Where I come from, you call that leaving the gate open. You have to close the gate.

In 1999, and even beyond, these institutions and traders and others were allowed to go hog-wild here and do almost everything with almost no supervision and no regulation. We have to learn from that and understand that part and parcel of this action by the Congress has to be re-regulation. Now, I have talked about the three Rs that are necessary, and I believe you have to do all of it here. I am willing to support something that deals with some kind of recovery. I understand the need to address this. But I also think you have to do some reform and you have to do some regulation at the same time.

You can't say to the American people, by the way, ante up a bunch of money for recovery and forget reform and forget regulation. If we don't patch that which we tore in 1999 and decide to take apart again the fundamental banking functions of the federally insured institutions, if we don't separate them from the inherent risk that exists in investment banking and others, where they take these risks with things such as swaps and collateralized debt obligations and others, if we don't understand the lesson, we are destined to repeat it, just as sure as I am here. You have to have reform. Reform is to back up some steps and to decide to protect the banking institutions from excessive risk. Regrettably, we went in the wrong direction in 1999. I think we need to go back some ways.

Second, there is so much dark money out in this economy that you can't see. Hedge funds. We must have a regulatory provision for hedge funds. I am not suggesting the recovery bill itself has to describe the specific set of regulations, but the bill can, as it has in a couple other areas, describe a rulemaking process for regulating hedge funds. The same is true with respect to derivative trading. We have been told there is somewhere around $62 trillion in notional value of credit default swaps out in this country. Most people think that sounds like a foreign language. They wouldn't even know what it is. It is an unbelievable amount of insurance out there against securities that have become toxic--securities that are lying and smelling, fouling in the bowels of the balance sheets of some of these corporations. We have to do something that does reform and regulation. There may never be another moment to be able to do it.

I understand a whole lot of folks have been opposed to this for a long time. I have pushed it for years on the floor of the Senate. Senator Feinstein, I, and many others have been pushing for regulation of hedge funds and the regulation of derivative trading. But as I indicated when I started, when you have a Bear Stearns that has derivative or credit default swaps running through the Cayman Islands and they go belly up, and nobody even knew it was there--and they helped pull down this firm--then you wonder how does that happen outside the gaze or view of regulators? How on Earth does that happen?

We have, unfortunately, been looking only at this question of providing the funding. As I said, I am willing to consider a process that deals with rescue. I am willing to consider that. But I believe that if we move past this moment and don't address the reform and the regulation piece, we will be back again--maybe in 5 years, maybe 10 years. We will be back again, almost certainly.

Warren Buffett once said, when I talked to him on the phone, that there is an old saying on Wall Street: You can't see who is swimming naked until the tide goes out. Well, you know what, the tide is going out. We have lots of trouble, and now we see the consequences of unbelievable, rampant speculation in institutions that should have known better. We have to try to protect the financial system of the United States from collapsing. I understand that. We have to do that. But we cannot possibly ask our constituents to believe in that mission if we don't also provide the regulation and reform that must accompany it. We can't do half a job.

As I indicated, I am not suggesting that legislation has to, in the 130-some-page bill, describe exactly how you regulate hedge funds or how you regulate derivative trading.

But I do believe we ought to describe a specific date by which a rulemaking process proceeds for that regulation.

I would be happy to yield.

That is correct. My point was, that which has occurred that has caused this unbelievable collapse, I think the Senator from New Mexico would agree that what has precipitated this is the massive amount of failure out there of mortgage-backed securities that are held on the balance sheets of these financial institutions. They turned out to be sour. It has begun to pull down on some of these institutions.

My point was that you can go to the Internet today and you can find exactly the same kind of irresponsible advertising that existed for a long time, including the biggest mortgage bank in the country, Countrywide, which is saying: Bad credit, come over here, we will give you a loan. The same things exists. Go to the Internet today, and you will find exactly the same kind of advertising.

It has.

Well, let me talk about the banker's role for a minute, because the way the Senator describes it is part of my concern. It used to be that when you bought a home, you would go down to the local savings and loan or the local bank and try to negotiate a home loan. Then sitting across the desk, they would evaluate what kind of job do you have, how much family income do you have, how secure is your job, is this a loan we want to provide to you because of the risk, and so on. They would make a judgment about you. They would check your credit rating. That is the way it would work. It doesn't work that way in most cases now. It does in some cases, in most cases not. This has become a big go-go effort to get home loans out there, securitize them, and sell the mortgage-backed securities.

So when we are talking about banks buying mortgage-backed securities, I asked the question: Why should they be buying mortgage-backed securities? They shouldn't even have the right to buy mortgage-backed securities that are cut into these little pieces of sausage and sent upstream when they do not even know what is in them. How many of them are subprime? They don't have any idea. All they see is an advertised yield that says: Well, if I buy this security, I am going to get a big, fat income from it.

Going back, I would like to see us get back to the day when a mortgage is something negotiated across the desk from the local banker. I would like to see the day when you can take a look at the balance sheet of a bank--and I would say in my home State most of our bankers have not been engaged in this at all. They do not have toxic mortgages, by and large. They have not invested in these things. But this became a go-go industry--I described some of them, and I will do it again in a minute--with massive amounts of money being made, on Wall Street, I might say. So Wall Street was wallowing in cash. You know it and I know it--I mean, the highest income earner last year, $3.7 billion; that is $300 million a month, $10 million a day.

So I understand why the American people are angry. They are saying, you know: If you have to do something to rescue the financial system, for gosh sakes, don't let the system collapse, but they also say: Let's clean up this carnival of greed that existed around here that caused this to happen.

So that is why I think the American people--I do not know who uses the term ``bailout'' or ``rescue,'' but that is why the American people looked at this and said: Wait a second, I want you to do the whole job, not half a job. In my judgment, half a job is putting up whatever money you need at this point. Perhaps there is a better way to do it. Perhaps we ought to invest in the capital structure of some of the failing institutions and get a return from that. The other side of it is to decide that, in addition to whatever we decide on the money, we are going to re-regulate and reform. If those two things are not in the bill, I hope those who are now negotiating will put that in the bill because I think the American people might better understand what is going to be done.

I appreciate the comments of my colleague from New Mexico. He has been involved in all of the great debates in this Senate for a long time. I always appreciate his thoughts and comments.

Let me say that the collateralizing and securitizing of these exotic instruments was not something that was done for fun; it was because it could become very profitable to securitize everything, roll them up into these little sausage deals and sell them upstream. Everybody was making a lot of money doing it, and nobody knew what was in them. The interesting thing is that at least when you negotiated your home loan across the desk of the banker in the old days, if you found a time when you really could not make your payment--something happened, an illness in the family or something happened--you went back to the bank and sat down and said: Look, here is my situation. Can we work something out? And the banker, in most cases, would say: I understand. Let's work something out. Nowadays, you do not know who has the mortgage. The local bank does not have it anymore; they have sold it. Countrywide mortgage bank had it. They do not have it for a very long period of time. They have sold it to two or three different people, so you do not even know who has it.

That is why, as these things go belly-up, because I think they had predatory lending, I think they had terms in them that were unbelievable, resetting mortgages, and so on. These homeowners were set up for failure, and they have no one to go talk to to work it out.

That is precisely why one of the most important provisions that should be in this new agreement, and I hope is in a new agreement, is something that some now strongly object to; that is, in a bankruptcy proceeding, allowing a bankruptcy court to discharge and allow the renegotiation of that home loan. They would allow the renegotiation of a second home or a mortgage on a boat or a mortgage on almost anything else but not the prime home. That makes no sense.

If you believe--and I think most people do--that the foundation of this mess we are in is these bad mortgages out there, these toxic securities, then the quickest and best and most effective way to begin putting some sort of a foundation under home values is to allow those with those home loans that are troubled to be able to negotiate with somebody; in this case, through a bankruptcy court, to negotiate that they could continue to pay, albeit at a lower interest rate. At least you would have someone who can stay in their home. You would have someone who is making a payment every month, probably not what they had intended to pay, but they are making the payment. They are in the home. They have provided some value to that mortgage. All of a sudden that provides a foundation. Instead of empty homes and mortgages that are destroyed, you have someone living in the home with a mortgage and making monthly payments on it. That would provide some stability for home values. It would keep some people in their homes. We have 2 million people this year who will have lost their homes. That is pretty unbelievable.

My colleague said it would be hard to put together a regime of doing the necessary regulation of hedge funds or regulation of derivatives trading. It would be difficult to do that. I am not suggesting they have to do that. I am suggesting that they mimic what they did in the original bill on a couple other pieces and require by law a rulemaking on the regulation of hedge funds, require by law a rulemaking on the regulation of derivatives by a date certain. They don't have to describe to me exactly what the rulemaking would require in detail or what the regulation would require in detail. At least we ought to expect that we begin to reform and regulate, even as we try to rescue. One of the important things the American people continue to ask--and it is a very important question--is, who is accountable for all of this? Not just how did it happen, but who is accountable? Who has been made accountable? The answer is no one. They all got away with their big bonuses and their money. The consequences are, we are bailing all these organizations out. We are creating bigger banks. These three banks will represent one-third of all the banking business in America now with these new acquisitions. It used to be that we had these folks who were too big to fail. Now we have gotten them too ``bigger'' to fail. So no matter what happens to them, the American taxpayer has to be the backstop. We are going to have to bear the consequences of their failure because they are bigger. They were too big to fail previously. Where is the accountability for predatory lending that was out there? Where is the accountability for brokers who were putting people into subprime loans. They qualified for other loans, but they still put them in subprime. A substantial portion of subprime loans were put to people who would qualify for regular loans. They put them in loans with very bad conditions in which they were almost destined to fail, with higher interest rates being reset in the future.

People are also concerned about this issue of compensation. There are some great CEOs in this country. There are people running companies and banks and others who do a great job. But this has been a wild ride for unbelievably excessive compensation. Why is it that we read that Washington Mutual failed and last year the CEO made $14 million? For what? Maybe the board of directors will answer for what. Or AIG, the CEO made $14 million last year. They had a little operation over in

London that nearly brought that whole company down. We had to bail them out. Lehman Brothers, $22 million the previous year, Merrill Lynch, $161 million. There is plenty of reason for the American people to take a look at all that and say: That is a carnival of greed, creating exotic financial instruments they can't even explain that are so complicated. Trading them upward and backward and sideways, everybody making massive amounts of money, and then all of a sudden it goes belly up and starts to pull down the entire financial system. All of a sudden we are talking rescue, but nobody is talking regulate.

As I said, in my part of the country, they say that is not closing the gate. You have to close the gate. You have to shut the gate. If you don't include reform and if you don't include regulation, we are not going to solve this problem.

The next day and a half we will talk a lot about these issues. My hope is whoever is negotiating--I know some, and I have been in meetings last evening on this subject--will understand the need that some of us feel that anything that is done require the issues of reform and regulation that do not now exist in the plan that has been offered.

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

Madam President, today I applaud the passage of the Native American Housing Assistance and Self-Determination Reauthorization Act of 2008, NAHASDA. This act will continue to provide thousands of homes for American Indian and Alaska Native families.

The bill passed today reauthorizes and enhances the Native American Housing Assistance and Self-Determination Act, NAHASDA, adopted in 1996. The act provides formula-based block grant assistance to Indian tribes, which allows them the flexibility to design housing programs to address the needs of their communities.

The system set up by this housing law has been very successful in addressing the housing crisis in Indian Country, and this reauthorization will go even further in providing homes to thousands of Indian families who desperately need them. Instead of being a one size fits all national program; it provides grants to tribes, allowing them to tailor housing programs to fit their needs. It has already enabled thousands of families to rent and own homes, and now thousands more will have access to much needed housing.

Despite the continued success of NAHASDA, there is still a housing crisis in Indian Country, where 90,000 Indian families are homeless or underhoused. Of those who do have housing, approximately 40 percent of on-reservation housing is considered inadequate, and over one-third of Indian homes are overcrowded.

The legislation passed today will strengthen NAHASDA by providing tribes with increased flexibility, with the goal of producing more homes in Indian Country. The bill will allow funds to be utilized for community buildings such as daycare centers, laundromats, and multipurpose community centers, with the hope of not only building homes but also building communities. The bill also authorizes a study to assess the existing data sources for determining the need for housing and funding programs.

Adequate housing is the first and most necessary step in building a strong community, and many people in Indian Country have gone on for far too long without a roof over their heads. This bill is more than just a housing act--it will give tribes more authority over their own land and truly help build stronger communities in Indian Country.

Mr. President, please allow me to thank Leader Reid, Senator Murkowski, Senator Dodd, Senator Inouye, Senator Akaka and Senator Shelby for their commitment in getting this legislation passed.

Thank you to the Senate staff for their hard work on this bill, including Allison Binney, Heidi Frechette, Tracy Hartzler-Toon, David Mullon, Jim Hall, Jenn Fogel-Bublick, and Mark Calabria.

Also, thank you to Representative Kildee, Representative Frank, Representative Watt, and their staff, Kimberly Teehee, Dominique McCoy, Cassandra Duhaney, and Hilary West.

Finally, this bill would not have been possible without the tireless work of tribal leaders, the National American Indian Housing Council, the National Congress of American Indians, the National Indian Health Board, and Indian housing advocates.

Mr. President, are we in morning business?

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

Mr. President, the discussion late last night and many days before, and perhaps tonight and beyond, is about the financial crisis that is described in this country by the Treasury Secretary and the chairman of the Federal Reserve Board. They have been indicating to us most of this year that we have a strong economy in this country and indicated that there have been some problems with toxic mortgage-backed securities that have gone sour and so they have dealt with them in a number of ways, but still indicated that the economy is essentially strong and the fundamentals are all right.

But in recent weeks, especially, step after step taken by the Treasury Secretary and the Federal Reserve Board is to commit American taxpayers' dollars to try to remedy some very serious problems in the economy. The discussion these days--especially in the last few days-- has been about a proposal by the President and his Secretary of the Treasury for $700 billion as a rescue fund for the economy. What most people are not talking about is the fact that we have already committed $1 trillion for this purpose before the Congress would vote on $700 billion more. Let me describe why.

When Bear Stearns went belly up, the Federal Reserve Board provided $29 billion to buy Bear Stearns to J.P. Morgan, so that was taxpayer money. That is our guarantee: $300 billion through the Fed window direct lending to investment banks. For the first time in the history of this country, the Federal Reserve Board opened its lending window to nonregulated, unregulated banks. So investment banks go to the Fed: $300 billion.

Fannie and Freddie. We assumed the liability of Fannie and Freddie. That is $200 billion.

When Lehman went belly up, the funding was provided by the taxpayers for J.P. Morgan to buy Lehman Brothers: $87 billion. American International Group: $85 billion. Propping up money market funds: $50 billion.

That is $1.7 trillion in total, $700 billion of which is before this Congress as a proposition by the President for a rescue fund.

Now, the reason I wanted to visit about this today is it seems to me this is a proposition--if you equate it to a bathtub--of suggesting that we put water in the bathtub before we plug in the drain, you are not going to fill the bathtub. You are just going to put water in the top and it is going to drain out the bottom.

This morning I woke up, as did most Americans, to discover one of America's largest banks had failed and had been purchased by an investment bank overnight. The purchase was arranged by the Federal Reserve Board. So I was curious about this: Washington Mutual, one of America's largest banks. I went back to take a look to see what the president of Washington Mutual earned last year. Obviously, the bank was headed, apparently, toward a crash landing someplace. Well, Mr. Kerry Killinger, the president of Washington Mutual, which was bought last evening by J.P. Morgan, earned $14 million in compensation last year. Fourteen million dollars was paid--to the CEO of a company that last night we were told was going belly up--with insured deposits, so our Government arranged a purchase by an investment bank called J.P. Morgan.

Now, there is another piece to the story. Washington Mutual, which failed last evening, not only paid its CEO $14 million last year; it hired a new chief executive officer weeks ago. By the way, the new chief executive officer 3 weeks ago signed with a bonus of $7 million. And we are told this morning that the new CEO, having been on the job 3 weeks for Washington Mutual, now purchased by J.P. Morgan, will keep-- likely keep--the $7 million bonus signed 3 weeks ago, and 12 million additional dollars as a severance. Three weeks' work: $19 million.

Now, I was trying to figure out: Here are some folks at the top of the food chain on these big companies, how

much money they are making. Well, as I said, last year the CEO of a company that went belly up last night made $14 million, and the replacement, working 3 weeks, will make $19 million. What does $19 million equate to? Well, I figured at $50,000 a year for an average salary in this country, it would take 382 years for a worker to earn what this man is going to get in severance payments and bonuses for a 3-week stint in a failed company. Unbelievable. Absolutely unbelievable. But it is a hood ornament on a carnival of greed that has existed now for some while, unabated, in which people at the top have made massive quantities of money. Then the whole thing comes crashing down because they began creating exotic securities that were supported, in some cases, by worthless mortgages, placed by bad brokers and, in some cases, bad mortgage companies; sold up the chain to hedge funds and investments banks, all of them making massive quantities of money, and then it goes belly up and everybody wonders why.

So I asked the question: What do all of these folks make? How much money did they make as this was collapsing? Well, some of these, I am sure, are perfectly good people with good reputations. Stanley O'Neal, people tell me he is a good guy. Last year he made $161 million with Merrill Lynch. Lloyd Blankfein, Goldman Sachs, last year he made $54 million. John Thain, Merrill Lynch, he made $83 million last year. I am just talking about 2007 published compensation numbers. John Mack at Morgan Stanley made $41 million. James Cayne at Bear Stearns made $34 million. Poor Martin Sullivan down here at AIG, that went belly up, he only made $14 million, and we had to come up with $85 billion of the taxpayers' money to backstop this company. The CEO made $14 million last year.

I mentioned Washington Mutual went belly up last year; the biggest bank failure in the history of this country. What did the CEO make last year? Fourteen million dollars in compensation.

So the question is: What does all this mean? On Wall Street--on Wall Street alone--in the past 3 years--not salaries, bonuses--have represented $100 billion. Let me say that again. It is almost too big to comprehend. In the last 3 years on Wall Street, bonuses equaled $100 billion.

In 2007, the 500 largest businesses in this country, the CEOs averaged $14.2 million. That is about 350 to 400 times the salary of the average worker. Thirty years ago, the average CEO made 30 times what the average worker made.

Let me go back to ground zero and explain what caused all of this and then why I am concerned about what is happening around here. I have spoken on the floor many times, but I am going to do it again, because I want people to understand what is at the root of all of this. They say: Well, there are toxic securities being held by all of these institutions, and when you have toxic assets that have devalued and aren't worth anything, it threatens the lifeblood of the institution. Some of them go belly up, right? So how do they have all of these toxic mortgages, these securities? Here is what they did. A bunch of the smartest guys in the room, a bunch of high flyers, said: You know what let's do? Let's securitize things and then we can move them up the chain and sell them and resell them.

It used to be: You want to get a home mortgage? Go downtown. Go to the businesses that make home mortgages--a bank or a savings and loan-- sit across from somebody who knows about it and negotiate it and sign a paper, and then they held your mortgage. And if you had a little trouble, you said: I am having a little trouble making this month's payment. That is the way it used to work. Kind of a sleepy industry that allowed people to get home mortgages in their hometown and that is where the mortgage paper was.

Now, if you go down and get a mortgage, or perhaps a broker will call you and solicit you to get a mortgage under this regime, and they will sell it immediately, and then they will sell it up and somebody will securitize it with a bunch of other mortgages. Then they will resell that, and pretty soon you have mortgage securities. As I have said often, it is like packing sausage in sawdust and slicing them up and selling them up the line. They didn't have the foggiest idea of what was in these securitizations.

So this is all about big yields. This is all about greed. Here is the origin of that greed. The biggest mortgage company in the country is bankrupt now, taken over by somebody else. In fact, the guy who ran this, Mr. Mozilo, escaped this with over $50 million, so he is sitting pretty well. This company, Countrywide, here is what they advertised. They said: Do you have less than perfect credit? Do you have late mortgage payments? Have you been denied by other lenders? Call us. We will give you a loan. Bad credit? Call us. Biggest mortgage banker in the country.

Mr. Mozilo, who grew this company, was given the Horatio Alger Award a couple of years ago, listed as one of the most respected top businessmen in America. The company is gone, of course, now.

Millennia Mortgage. I don't know who ran Millennia Mortgage. Twelve months, no mortgage payment. That is right; we will give you the money to make your first 12 payments if you call in 7 days. We will 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.

Here is the example that all of us have seen. Zoom Credit. I don't know who ran this company. 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, a home loan, or credit card. Even if your credit is in the tank, Zoom Credit is like money in the bank. We specialize in credit repair and debt consolidation. Hey, listen: Bankruptcy, slow credit, no credit, who cares? Come get a mortgage from us.

All over this country, people filled with greed, companies saying, Come and get a mortgage. In fact, I tell you what. We will allow you to get a mortgage from us with what is called a no doc loan. What does that mean? It means you don't have to document your income. It is called a no doc loan. We will give you a mortgage and you don't have to document your income. In fact, here is what you find on the Internet about that. No doc and low doc. Is that English? Yes, it is English. No doc. These mortgage companies said, We would like to give you a mortgage, a home mortgage, and you don't have to document your income for us. You just heard me say these companies say: You got bad credit, slow credit, no pay, been bankrupt? Come to us. They also say this: We will give you one without having to document your income to us.

Then they say this: You know what. You don't have to pay any principal--interest only. No documentation of your income and interest only. But they say, If that is not good enough, we will tell you what. You not only pay interest only, we will make your first 12 months payments for you, and then you pay interest only. But if that is not good enough, you don't pay any principal and you don't pay full interest; we will actually cut part of your interest and have no principal and add it to the back end of your loan after you have gotten a loan from us with no documentation of your income. Been bankrupt? Are you a bad credit risk? Come to us.

So now here is the trick, and here is how it all worked. Once they got you to do this, they locked in what was called prepayment penalties, and they said: If you get this mortgage, you should understand we are going to cut your monthly payment by a fourth. Are you paying $800 a month now? Get a mortgage from us, it will cost you $200 a month. That is a good deal. Now, it is going to reset with a new interest rate in 3 years. We want you to know that. We won't exactly tell you what that is going to mean; we will fuzz that up for you. But, of course, they never said you won't possibly be able to afford the payments in 3 years because the interest rate is going to go to 10 percent.

What they did is they put in a prepayment penalty that was very substantial which meant that when this reset with a much higher interest rate and a much higher payment, people could not repay it, they could not prepay it to get out of the mortgage. That is the basis on which they slice up these mortgages and send them forward because they said these have very

high yields with these prepayment penalties; we locked them into big interest rates in the outyears.

Two million Americans are going to lose their houses this year because of this kind of trash. This is not good business. This is not capitalism as we know it. This is unfettered greed.

Two million Americans will lose their homes this year. Think of that. Think of 2 million supper tables across this country, sitting around with the kids and the spouse saying: We are going to lose our house and there is not a thing we can do about it. Two million times this year?

In addition to that, which I think is the most important piece of this sad story, in addition to 2 million people losing their homes, then we see the consequences of all these bad, toxic securities, mortgage-backed securities lying in the bowels of these big investment banks and regular banks as well, whose deposits are insured by the Federal Government. When they turn sour, it goes belly up. Then we wake in the morning and we hear big firms whose names we have been accustomed to for years that have been beneficial to this country, providing investment capital for expansion of this country's economy, all of a sudden they have gone belly up. Why? Because they are laden now with these toxic mortgages.

I went to the Internet yesterday and I found 300 examples of companies that want to provide loans today; 325 examples under ``home loans with no credit check.'' Just today. Try it. Go to the Internet and see if you can find companies advertising: Come to us. Bad credit? Been bankrupt? No credit check. Hundreds of them are still doing it. The question is, Why is that being allowed? ``You have bad credit? Get approved today.'' These examples I have taken off the Internet in the last 24 hours.

Let me go back to one more part of the story. I wish to read something Franklin Delano Roosevelt said on March 12, 1933. I know with all the newfangled securitization, the new rules, new approaches, the growth of the investment banks and all that, what we have seen, I know it is probably old-fashioned to think this way, but here is what Franklin Delano Roosevelt did.

The banks went belly up during the Great Depression. He created a bank holiday and then reopened. But he wouldn't let them do what they used to do. The reason they went belly up is because banks were investing in real estate and securities and they were merging what has to be inherently safe and secure--that is banking, and it is not just being safe and secure with their balance sheet; it is having the perception of being safe and secure. If people think you are not safe and secure and they run on the bank, I don't care how strong your bank is, your bank is going to close its doors. A run on the bank and it is over. The perception of safety and security is critical.

What we had in the Great Depression is banks merging up with real estate. It was go-go time in the roaring twenties. We had banks with real estate and securities and so on. Back in the Great Depression, Franklin Delano Roosevelt created something called the Glass-Steagall Act. He said: No more. We are separating basic banking from risk. You want to gamble, I say go to Las Vegas. He didn't say it that way back in 1934. He said you can't gamble with respect to banks. If you want to do securities, buy, sell, make money, lose money, God bless you, you have the right to do that in this system. If you want to do real estate speculation, you have a right to do that. But no longer will anyone have the right to do that with respect to fundamental banking enterprises. He separated them.

In 1999, on the floor of this Senate, a financial modernization bill called the Financial Modernization Act came to this Senate. Senator Phil Gramm, Gramm-Leach-Bliley--we have to modernize the financial system. We are going to take apart Glass-Steagall. We are going to let financial homogenization occur. You can do one-stop shopping. Let everything happen under one big roof. We will create firewalls. It turns out the firewalls were made of thin paper.

Eight of us voted against that Financial Modernization Act that stripped bare the protections put in place in the 1930s that has served us 80 years. The Senator from Iowa voted against it. Eight of us voted against it. I voted against it.

I wish to show my colleagues what I said on May 6, 1999, during debate on that bill. I wish I had not been right. But here is what I said:

The bill will also, in my judgment, raise the likelihood of

future massive taxpayer bailouts.

I sure wish I hadn't been right. That is exactly the position we find ourselves in now.

I said during that debate:

Fusing together the idea of banking, which requires not

just the safety and soundness to be successful but the

perception of safety and soundness, with other inherently

risky speculative activity is, in my judgment, unwise . . .

I said on November 4, 1999, when the conference report came to the floor of the Senate:

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

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

As I say, I wish I had not been right.

What I see happening these days are proposals I call no-fault capitalism. Things go bad, things turn sour, things go under, you know what, we will have the taxpayer take care of that. That is not the way capitalism is supposed to work.

I am not interested in seeing this economy go down or seeing the wreckage of this economy, but I am interested in seeing if we can discover, even as we try to think through how we fix this situation, putting in place protections that will give us some notion of safety as we perceive it.

Here is what I think we should do:

Restore the firewalls that existed in Glass-Steagall in some form. We are going to propose a massive rescue fund of hundreds and hundreds of billions of dollars and not fix this situation? That is unthinkable to me, absolutely unthinkable. It makes no sense.

Address the wildly excessive compensation on Wall Street. I described the company that went belly up last night. The CEO of that company made $14 million last year. For what? The CEO they hired 3 weeks ago got a $7 million bonus for signing a new contract and has a $12 million termination contract. So working for 3 weeks in a company that is now failed, bought by an investment bank that is undergirded by the U.S. taxpayers, being able to go to the Federal Reserve bank window for direct lending, a guy who works 3 weeks is going to get $19 million. Does anybody think we have solved this problem of wild speculation and wild CEO salaries? I don't think so. At least it doesn't seem that way to me.

Next, we have to regulate speculative investments by hedge funds and investment banks. I have been talking about this for 10 years in the Congress, and we cannot get it done. If we are not prepared to regulate hedge funds and regulate the trading in derivatives, of which, by the way there is $46 trillion to $56 trillion of notional value of credit default swaps right now in this country--think of that--and nobody knows exactly where they are, nobody knows who has them all, nobody has the jeopardy of where they exist on someone's balance sheet. We don't know because we have had lots of people in this Congress willing to protect the institutions so they don't have to be regulated.

If we decide we are going to do something to provide stability to the financial system and decide we are not going to regulate hedge funds, we are not going to regulate the trading in derivatives, shame on us. Shame on us. Yet there is no discussion of that because, well, that is too complicated. Oh, really? That is more complicated than putting together $700 billion in a bailout or rescue package? I don't think so.

At the bottom of this discussion are the 2 million people who are sitting around the supper table talking about losing their homes. Wouldn't it have been smarter and would it not be smarter that while this repair is taking place that we decide to repair it at the bottom rather than pouring at the top, with respect to these toxic mortgages? How about working out family to family, by county, by city, working out the ability when a family can make payments, even at a lower interest rate, to keep that family in their house, to begin putting a floor under those mortgages? Wouldn't that make much more sense for everybody, including the American taxpayers, including the financial institutions for whom it costs much more to have an empty home

foreclosed upon, to dispose of that? Wouldn't it make sense, especially for the families who would like to find a way to work out their mortgage? It sure seems so to me.

The problem is, they cannot even find somebody to talk to because that mortgage has been put in these little pieces of security sausage, so exotic a lot of people don't understand them, and sold upstream three times, and they have all made a fortune. The problem is, the family is now going to get kicked out of their house, and all those folks who bought these now have toxic mortgages on their balance sheets, and we are told: You know what, we should bear the responsibility to solve that problem. I don't think so.

We ought to create a taxpayer protection task force to investigate and claw back the ill-gotten gains in this whole system. There has been no oversight. Regulators have been dead from the neck up for 10 years. We pay them. They are on the job, but they are woefully blind, and shame on them. We have a right, it seems to me, and an expectation of aggressive oversight to find out who cheated, who engaged in predatory lending, and who will be made accountable for it. Where is the accountability?

Finally, this Government has already done almost $1 trillion, let alone this $700 billion that is being proposed. Anything we do ought to make certain that the U.S. taxpayers share in the increased values of the very firms that have received the benefit of the backstop of the American taxpayers.

I see no discussion about these issues. All I see is a roundtable discussion about who is going to provide the money and when and can't we hurry up.

I will say one additional thing. It is curious that this administration and others spend most of their day talking this economy down and raising panic. The fact is, this country would be a whole lot better off talking about how we fix that which caused this problem, beginning with step 1.

What Franklin Delano Roosevelt did was not old-fashioned. In fact, it is exactly what we need to do now. We need to decide that we are going to get in some control of this financial system. Financial modernization, my eye. That is what they called it, financial modernization. It took apart the protection. It allowed an unbelievable carnival of greed to occur with massive money being earned by a few. We are not talking about a lot of people. But virtually all the American people now are being asked by some to pay for it. I think it makes no sense. I do not intend to support any plan that does not begin to address these issues.

Again, I am not somebody who thinks you ought to put water in the bathtub before you put the drain in the plug. That is exactly what we would be doing financially if we marched down this road and don't restore Glass-Steagall, don't regulate hedge funds and derivatives, don't deal with the wildly excessive compensation. If we don't do that, count me out; I am not part of this process.

Yes, I will be happy to yield.

Well, Mr. President, the Senator from Iowa makes a good point. I know Professor Galbraith. He also said we should regulate hedge funds. Certainly we must do that, he said, in the context of all this.

It is interesting. My dad said: Never buy something from somebody who is out of breath. There is a kind of breathless quality to what has happened to us in the last week, with the Federal Reserve Chairman and the Secretary of the Treasury saying, things are going to hell in a hand basket; you need to act in 3 days. And they send us a 3-page bill saying, we want $700 billion and we insist no one be able to review our work. There is a kind of a breathless quality to that, isn't there?

The Senator asked a question: If there is an investment--and we have already made a good number of investments, almost a trillion dollars-- if there is an investment in public firms, shouldn't there be some responsibility for the Government and the taxpayer to have access to and to understand what is in the balance sheets of those firms? The answer is: Absolutely.

We don't even have a standard. You wouldn't give kids an allowance with the standard we have, would you? Almost every kid, in exchange for getting an allowance, has to own up to some sort of chores or some duties. This proposition is: Time is of the essence, we have a crisis, load up the money and deliver. That makes no sense to me. I know others are waiting to speak, but I started yesterday with a quote that I have used often, and somehow, at the end of every single major debate we have in this Congress, it ends up going back to that quote from Bob Wills and the Texas Playboys. Most of my colleagues know it, from my having used it so often, but it is:

The little bee sucks the blossom and the big bee gets the

honey. The little guy picks the cotton and the big guy gets

the money.

It is always that way, it has always been that way, and it will always be that way, unless we decide to change it. The question is whether in the next days we will decide to do the right thing or we will rush off breathlessly to, one more time on behalf of the American taxpayer, bail out those at the top of the food chain--one of whom made $14 million last year as one of the largest banks in the country that he ran and was apparently headed right into the ground.

I tell you what: There is a right way to do things and a wrong way to do things, and the wrong thing for us at

this point is to decide that we have to meet a midnight hour and ignore the basics of what ought to be done--regulate hedge funds, regulate derivative trading, and reinstate some basic modicum of protection that existed from Franklin Delano Roosevelt forward dealing with Glass- Steagall and protecting our banking institutions from the riskier enterprises. If we don't do those things, we will be back again because we will not have solved the problems that caused this crisis.

I yield the floor.

If the Senator from Oklahoma will yield for a question.

I thank him for his courtesy in yielding.

I want to say one additional thing which I forgot to say, and ask a question while I do that.

No. 1, it may be that the cure that is being proposed is much worse than the potential that exists without it. Let me tell you what I mean by that.

On Monday of this week, we had the largest 1-day drop in the value of the U.S. dollar in history. We had the largest 1-day increase in the price of oil in history, accompanied by a 350-point drop in the stock market. The analysts say it was because they thought people were worried about the unbelievable amount of debt, our fiscal policy, our trade policy, and now the proposed bailout debt, but the unbelievable amount of debt that would erode the value of the U.S. currency.

If the electronic herd of currency traders goes after our dollar and collapses our dollar, the consequences for this economy can be far worse than that which is described by the Treasury Secretary and the Fed Chairman. And I am saying it occurs to me that if $700 billion plus tips the balance in terms of currency traders evaluating whether they want to come after the dollar, we face a greater peril than that which they suggest if we do nothing.

I appreciate the Senator for yielding, because I wanted to make the point about indebtedness. The Government is deep in debt, and we have to somehow put it back on track. This issue that is being proposed, as you know, increases to $11.3 trillion our indebtedness.

I appreciate the Senator's yielding.