Floor Statements

Madam President, there are more than 1.8 million family members of active duty servicemembers and an additional 1.1 million family members of reserve component members. Every one of these families makes sacrifices each and every day along with their servicemember and plays a very significant role in serving our country.

Military families often face unique challenges and difficulties throughout their loved one's career, including frequent relocations to bases across the country and overseas as well as the various demands stemming from continued deployments of members from every service. The Nation must ensure that all the needs of military dependent children and spouses are being met. The life of a military family member has never been an easy one, but in our 8th year of war, families are facing even more hardships.

Deployments are an undeniable strain on families. While a servicemember is away, spouses are often forced into the role of a single parent--juggling employment, child care, and household duties each and every day, all the while living with the pressure of having a family member deployed to a combat zone. Families are an integral part of the force, and stress on the force affects overall readiness.

Servicemembers will experience less stress in the field if they are assured their families are well taken care of back home. And it is imperative that families remain as resilient as possible in order to provide a stable environment for loved ones when they return home from those deployments. Families are often the first line of defense against posttraumatic stress and suicide, but may be experiencing similar feelings themselves. We must ensure that families and servicemembers have timely access to mental health resources and programs. We must make every dependent aware of the resources available to them to assist in everything from finances to job placement to health care and counseling.

Thousands of military family members have taken it upon themselves to confront these challenges by volunteering to provide critical assistance during deployments to servicemembers, their spouses, and children, as well as giving vital support to families relocating to a new area. And sadly, many families have made the ultimate sacrifice in the loss of a servicemember who proudly defended our Nation.

We in Congress have tried to do our part to help, and have made family support programs and initiatives a priority. In recent bills we have called for: the establishment of a Department of Defense Military Family Readiness Council; education, training, and tuition assistance to help spouses maintain careers; respite care for parents caring for children on their own due to deployments; authorized increased levels of Impact Aid for military dependents' education; and established and supported the nationwide expansion of the Department's Yellow Ribbon Reintegration Program which is aimed at helping members and families of the Guard and Reserve. But there is still more to do.

With President and Mrs. Obama placing the support of our military families among their top priorities, we must take this opportunity to renew our commitment and express our deepest appreciation to military family members who bravely serve this Nation alongside their servicemembers. It is my hope that this Year of the Military Family inspires us, the Department of Defense, the military Services, and Americans everywhere to commit to helping military families and servicemembers in any way we can, and to ensure that these strong men, women, and children are given the recognition, appreciation, and support that they so truly deserve.

Mr. President, I am pleased to join with Senator McCain in bringing to the floor the Weapon Systems Acquisition Reform Act. We introduced this bill. We did it on February 23, I believe, and we did it to address some of the problems in the performance of the Department of Defense major defense acquisition programs at a time when growth and cost overruns on these programs have simply reached levels which are unaffordable, unsustainable, and unconscionable, in some cases. Since that time, the bill has made rapid legislative progress.

I thank Senator McCain for all he has done. This was a bipartisan effort. Our colleagues on the Armed Services Committee worked out the differences that existed, and we unanimously recommended it to the Senate. But the magnitude of this problem is such that we must move quickly on it. The President has asked us to get the bill to his desk by Memorial Day, and it is our hope we will be able to do that.

On May 7, the bill passed the Senate unanimously. A week later, a companion bill passed the House. We

worked out the differences between the Senate and the House in record speed. The ability to do this was based on the working relationship which has been built up here. We work on a bipartisan basis in the Armed Services Committee. We work on a bicameral basis with the House and the Senate. When it comes to issues of national security, particularly, we are able to act so quickly.

I publicly thank not only Senator McCain, as I have, and colleagues of ours on the Armed Services Committee, but also Chairman Ike Skelton and John McHugh of the House Armed Services Committee.

This is a tremendously important bill. It has major reforms. It is going to address some of the most persistent underlying problems we have had that led to the failure of defense acquisition programs. What are those problems? The Department relies too often on unreasonable cost and schedule estimates. Second, too often the Department insists on unrealistic performance expectations. Third, the Department too often uses immature technologies. Fourth, too often the Department adopts these very costly changes to program requirements, to production quantities, and to funding levels right in the middle of the ongoing program.

The conference report I hope we will be able to consider in the next few minutes is going to address these problems in the following ways:

First, we provide for a strong new Senate-confirmed Director of Cost Assessment and Program Evaluation. That person is going to report directly to the Secretary of Defense to ensure that defense acquisition programs are based on sound cost estimates. The independence of that office is new, and it is essential. That person goes directly to the Office of the Secretary of Defense, not as the situation is now where there is a level of bureaucracy between the cost estimator and assessor and the Secretary of Defense.

Second, we require the Department to rebuild systems engineering and developmental testing organizations and capabilities which have been almost dismantled or reduced significantly. We want to ensure that design problems are understood and addressed early in the process.

Third, we establish mechanisms to ensure early tradeoffs are made between cost, schedule, and performance objectives so that we do not overcommit to what the Secretary of Defense has called ``exquisite'' program requirements.

Fourth, we require the increased use of competitive prototyping so that we select the best systems and prove they can work before we start building them.

Fifth, we establish new requirements for continuing competition.

Sixth, we address the problem of organizational conflicts of interest to ensure we get the best possible results out of the defense industry.

Seventh, we require regular program reviews and root cause analyses to address developing programs in acquisition programs.

Finally, we establish tough new Nunn-McCurdy requirements, so-called. We put teeth in the Nunn-McCurdy approach. We establish a presumption of program termination and the requirement that continuing programs be justified from the ground up to ensure we do not throw good money after bad on failing programs. If a program is failing, now it is too easy to get by the Nunn-McCurdy test of continuing a program. It is going to be a lot harder to jump that hurdle should programs be failing in the middle or costing a lot more or taking a lot longer.

So we have a strong bill. It is going to help change the acquisition culture of the Department of Defense, and it is going to point our acquisition system in the direction it needs to go. We hope Members of the Senate will join us in supporting this effort and send the bill to the President for his signature.

Our staff has done extraordinary work, particularly Peter Levine and Creighton Greene on my staff, and Chris Paul and Pablo Corrillo on Senator McCain's staff. And, again, I thank all Members and the leadership for bringing this bill, pushing it along, and giving us the encouragement and support that is so essential to get a bill of this magnitude to the floor of the Senate in record time.

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

Mr. President, both Senator McCain and I spoke on this matter. I ask unanimous consent to yield back all remaining time. I think I can do this with the consent of Senator McCain.

Mr. President, I ask for the yeas and nays.

Madam President, first let me thank my dear friend, the majority leader, for his extraordinarily generous, warmhearted comments, and including my family. As he indicated, it is so important to me.

I also thank Senator McConnell. Thank you so much for your gracious comments, Senator McConnell, and to my dear colleague from Michigan, Senator Stabenow.

The only thing more important to me than the 11,000 votes--which seem to be just like 30 years ago when it began--is the friendships that have formed here, the hundreds of friendships that far surpassed the 11,000 votes. I thank all of my colleagues for their friendship.

I can't think of a better vote to cast for this 11,000th vote than a vote on the bill shepherded through by my friend Chris Dodd. To me, this vote has tremendous meaning--not only for the

work that has gone into it in our subcommittee over the years, but to be connected with a Dodd-Shelby vote, and Senator Dodd's incredible effort to get this passed, makes this a special treat.

Thank you all very much.

(Applause, Senators rising.)

Mr. President, I move to lay that motion upon the table.

The motion to lay on the table was agreed to.

Mr. President, for the Committee on Armed Services I report favorably the following nomination lists which were printed in the Record on the dates indicated, and ask unanimous consent, to save the expense of reprinting on the Executive Calendar that these nominations lie at the Secretary's desk for the information of Senators.

Madam President, service to your community and to those most in need is one of the most important legacies we can leave as individuals or as institutions. It is with this in mind that I am honored to congratulate the Adrian Dominican Sisters, the Congregation of the Most Holy Rosary as they celebrate their 125th anniversary today. Guided by the humble yet inspiring mission to seek truth, make peace, and reverence life, this congregation has made a profound and enduring impact on many lives.

The Adrian Dominicans trace their history back to the establishment of the Holy Cross convent in 1233. A presence in the United States was established in 1853 with the arrival in New York of three sisters from this convent. Since the establishment of a hospital for injured railroad workers in 1884 to meet a pressing need in the Adrian community, the sisters of this congregation have devoted their energy, talent, and efforts in pursuit of meeting the spiritual, educational, and practical needs of those within the Adrian community and those far beyond its borders. Mother Camilla Madden was the first mother provincial, and she became the first mother general when the province became an independent congregation in 1923.

Adrian has grown steadily since its founding and has not only maintained a presence in Adrian, but has branched out into communities far beyond through ministries in 31 States, the District Of Columbia, Puerto Rico, Canada, the Dominican Republic, Italy, and Swaziland. The Adrian Dominican Sisters currently number more than 900 and are involved in ministries primarily in areas of education, health care, and social work. The congregation currently sponsors two universities, including Siena Heights University; two hospital systems; a long-term health care facility; three congregation-owned schools; and two retreat centers.

The Adrian Dominican Sisters have impacted many throughout its rich history, and I am truly delighted to recognize this impressive milestone, as well as their many important contributions over the years. Their influence and service to the community are apparent and appreciated by the many who have benefitted from their many spiritual and outreach efforts. I know my colleagues join me in congratulating Adrian Dominican Sisters on 125 years of dedicated service, and I wish them continued success as they build upon their legacy of accomplishment and excellence.

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

Madam President, it was my intention to call up two first- degree amendments at this time: Amendment No. 1094, which is an amendment that is cosponsored by Senator McCaskill and Senator Collins; and then it was my intent to call up amendment No. 1095. Both of these amendments are germane amendments. I understand that if I attempted to call them up now and set them aside, there would be an objection. So I will not do that at this time, but it is my intent to call up these, either before cloture or postcloture, because they are germane amendments. I just wish to alert our colleagues it is our intent to call up these two amendments.

I note the absence of a quorum.

Mr. President, Senator McCain and I are today introducing, by request, the administration's proposed National Defense Authorization Act for fiscal year 2010. As is the case with any bill that is introduced by request, we introduce this bill for the purpose of placing the administration's proposals before Congress and the public without expressing our own views on the substance of these proposals. As chairman and ranking member of the Armed Services Committee, we look forward to giving the administration's requested legislation our most careful review and thoughtful consideration.

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

Madam President, I understand there is a unanimous consent agreement that needs to be propounded, and I yield for that purpose.

Madam President, I am here today to strongly support the Dodd-Shelby substitute to the House bill on credit card reform. Before I proceed with my statement, I wish to say how appreciative I am, and the country will be, for the efforts of Chris Dodd and Senator Shelby. This has been an effort on the part of Senator Dodd which has been ongoing for a long time. It is a very difficult, complex effort that he has taken under his wing and mastered. When we can get this passed--and hopefully we will by the end of May, as the President has requested-- there will be a very strong feeling across this country that, hallelujah, the Congress has finally acted to correct some of the abuses which have cost our consumers so many hundreds of billions of dollars in unfair charges by some credit card companies.

Millions of Americans today are facing the worst economic crisis of their lifetime. Their hardship is being compounded by unfair credit card fees and interest charges. It is long past time for us to do something about it. The Credit Cart Accountability, Responsibility, and Disclosure Act of 2009, which is 414, introduced earlier this year by Senator Dodd, myself, and a number of our colleagues to combat credit card abuses, is the best chance we have to do just that. With this substitute, we are going to be able, I believe, on a bipartisan basis, with hopefully enough support in the Senate, to accomplish our goal.

With home prices falling and unemployment rising, millions of Americans

who are still managing to pay their credit card bills on time have nonetheless been subjected to hiked interest rates. They have been hit with a double whammy--hard economic times and abusive credit card interest rates and fees. It is simply wrong for America's banking giants to try to dig themselves out of the hole they put themselves in by putting American families into a deeper hole with fees and sky-high interest charges that are often retroactively applied. Even as the prime rate of interest has gone down, some credit card companies have hiked interest rates on millions of customers who play by the rules. To add insult to injury, banks that received bailouts are frequently the ones that are punishing the very taxpayers they came to for financial rescue.

Credit card companies have used a host of unfair practices. They unilaterally hike the interest rates of cardholders who pay on time and comply with the credit card agreements they entered into. They impose interest rates as high as 32 percent, and they apply higher interest rates retroactively to existing credit card debt. They pile on excessive fees and then charge interest on those fees, and they engage in a number of other unfair practices that are burying American consumers in a mountain of debt.

I have received thousands of letters from people who have been treated unfairly by their credit card companies and feel they are powerless to do anything about it. The letters come from people from all over the country, from all walks of life; letter after letter, each more poignant than the next.

The President has also heard those voices. He has made clear his support for ending abusive practices which cause so much pain and financial damage to American families, and he has called on Congress to send him a bill by the end of this month.

We can and we should meet that deadline. The House has acted. Their version of this bill passed the House on April 30 by a vote of 357 to 70, garnering support from a majority from both parties. A similar vote in the Senate on the CARD Act will send a strong message that standing up for the American taxpayer and consumer is a bipartisan priority.

Under this bill, card issuers will no longer be able to engage in the abusive business practice of first extending credit at one interest rate, and then unilaterally jacking up the interest rate after the money is owing. Our bill doesn't restrict fair lending; it only affects credit card companies that engage in irresponsible lending practices that bury people unfairly in debt, the sort of debt that the companies often don't even expect to fully recover, but profit from nonetheless, through the extraction of fees and interest.

Some argue that it is the role of regulators, not Congress, to combat unfair lending practices. But for years Federal regulators have not taken up that task. Instead, they stood largely by silently while deceptive and unfair practices became entrenched in the credit card industry. The Federal Reserve, in particular, charged with issuing credit card regulations, failed to take action until congressional hearings and public outrage forced attention on credit card abusers.

Six months ago, the Federal Reserve and other bank regulators finally acted, issuing a regulation last December to stop some of the unfair practices. For example, the new regulation prohibits banks from retroactively raising interest rates on cardholders who meet their obligations, requires banks to mail credit card bills at least 21 days before the payment due date, and forces banks to more fairly apply consumer payments.

But the regulation, regrettably, leaves in place blatantly unfair credit card practices that mire families in debt. It fails to stop, for example, abuses such as charging interest on debt that was paid on time, charging people a fee simply to pay their bills, and hiking interest rates on a credit card because of a misstep on another unrelated debt, a practice known as universal default. It doesn't stop the charging of interest on fees. Legislation is needed not only to end those abusive practices that are not prohibited by the Federal Reserve regulation, but also to provide a statutory foundation for the new credit card regulation so that it cannot be weakened or withdrawn in the future.

The Dodd-Levin bill, as introduced, banned each of these unfair practices that were still allowed by the Federal Reserve rules. The substitute introduced today would not go as far as the Dodd-Levin bill, but offers a good compromise with strong consumer protections that ought to attract widespread support in the Senate. The substitute remains stronger, for example, than both the Federal Reserve credit card regulations and the House credit card bill in a number of ways. For example, it would prohibit retroactive interest hikes for cardholders who pay their bills on time and would allow them only for those who pay more than 60 days late. Even then, if would require banks to restore a lower interest rate for persons who had paid 60 days late but then made 6 months of on-time payments. The bill would also prohibit interest charges for debt that is paid on time, a key consumer protection for which I have been fighting for years. In addition, the bill would put its consumer protections in place 9 months from now instead of the longer regulatory deadline of July 2010 or the 1-year delay in the House bill.

The bill, of course, will not only help protect consumers and ensure their fair treatment, but it will also make certain that credit card companies that are willing to do the right thing are not put at a competitive disadvantage by companies continuing unfair practices.

In 2006, Americans used 700 million credit cards to buy about $2 trillion in goods and services. The average family has five credit cards. Credit cards are being used to pay for groceries, mortgage payments, and even taxes. And they are saddling U.S. consumers, from college students to seniors, with a mountain of debt. The latest figures show that U.S. credit card debt is now approaching a trillion dollars. Credit cardholders are routinely being subjected to unfair practices that squeeze them for ever more money, sinking them further and further into debt.

I strongly commend Senator Dodd, chairman of the Banking Committee, for taking action to move our credit card bill through the committee, despite some opposition. I also commend Senator Shelby for joining him in this substitute. Now is the time for the full Senate to act so that we can then resolve any differences with the House, and send the bill to President Obama, who has said he is ready to sign credit card legislation.

For years now, we have been combating abusive credit card practices on our Permanent Subcommittee on Investigations, which I chair. The subcommittee held two investigative hearings in 2007, exposing those practices. I introduced legislation that same year, S. 1395, the Stop Unfair Credit Practices in Credit Cards Act. I am pleased that at that time we had so many cosponsors, including Senators McCaskill, Leahy, Durbin, Bingaman, Cantwell, Whitehouse, Kohl, Brown, Kennedy, and Sanders. We followed that by introducing the Dodd-Levin bill in this Congress. It incorporated much of the previous Senate bill that I referred to, and it added other important protections as well. The Dodd-Levin bill then provided the foundation for the Dodd-Shelby substitute.

Senator Dodd already outlined most of the important provisions in the CARD Act. I want to highlight three provisions that I believe are critical to delivering relief to American families and returning common sense to the credit card business.

First, the bill will prohibit interest charges on any portion of a credit card debt which the cardholder paid on time during a grace period. Virtually all credit cards provide a grace period, so called, in which a credit card debt can be repaid without incurring interest charges. But what most people don't realize is that the credit card industry restricts this grace period to people who pay off their entire balance in full. If a cardholder repays only part of the balance during the grace period, even though it is more than the minimum amount, the issuer charges interest on the entire balance--even the portion that was repaid on time.

If I charge $5,000 in a month and pay off $2,500 by the due date-- again, an amount far more than the minimum payment required--I will still be charged interest on the full $5,000 balance, starting with the first day of the

billing period. That policy is unfair, counterintuitive, and it is unknown to a vast majority of cardholders who pay the added interest. The CARD Act will return a commonsense interpretation of the grace period and simply prohibit the charging of interest on debt that is paid on time.

Another key provision would limit the circumstances under which a credit card company can hike the interest rate applicable to a cardholder's existing debt. Right now, credit cards are the only type of loan I know of whose terms can be unilaterally changed after the loan is incurred. Even in the toughest market conditions, for example, car companies cannot increase the interest rate on a car loan, even if a borrower pays late. The credit card companies can unilaterally hike a cardholder's interest rate at any time, for just about any reason, or no reason at all. This patently unfair practice violates accepted practice in the lending field outside of credit cards, and the bill will put an end to that. The substitute will ban retroactive rate hikes for existing balances except in limited circumstances, the most important of which is that it would ban such interest hikes for cardholders who pay on time and would allow them only for cardholders who pay more than 60 days late. Even then, it will require banks to restore the prior lower rate if the cardholder follows with 6 months of on-time payments. While our Dodd-Levin bill would have gone even further and banned retroactive rate hikes, period, the substitute offers a reasonable compromise that will provide greater protection in this area than the Federal Reserve regulation, or the House bill, both of which would allow retroactive interest rate hikes if a person paid more than 30 days late.

Finally, while the substitute before us does not go as far as our Dodd-Levin bill did to prohibit universal default, the substitute does place important limits on how card companies can raise rates when cardholders have met their obligations and pay their credit card bills on time. Right now, credit card companies can unilaterally hike a cardholder's interest rate if the company receives information indicating that the cardholder is an increased risk of not paying his or her debts, even if the cardholder has a years-long record of on-time payments and has never paid a bill late to that company. The companies can apply the new higher rate to the cardholder's existing debt, as well as future debt.

The substitute would put an end to that practice as it applies to existing balances. It provides that if a cardholder meets the obligation of the card agreement by paying on time and staying under the credit limit, the credit card company must hold its end of the bargain and honor the terms of the agreement. In other words, it cannot raise the interest rate applicable to the cardholder's existing debt. The substitute would, however, allow the credit card company to increase the interest rate applicable to future debt--meaning debt not yet incurred. In addition, under the substitute, if a card company increased an interest rate on a cardholder because of credit risk, or market condition, the company would be required to review the increase after 6 months and reverse it if conditions warrant. While my preference would be to prohibit unilateral rate increases entirely, the compromise is a significant improvement over current law. It would ban unilateral interest rate hikes on existing debt for consumers who play by the rules.

To understand why these protections are needed, here are some examples of the credit card abuses we uncovered and some of the stories that American consumers shared with us during the course of the inquiries carried out by my Permanent Subcommittee on Investigations.

The first case history we examined illustrates the fact that major credit card issuers today impose a host of fees on their cardholders, including late fees and over-the-limit fees that are not only substantial in themselves but can contribute to years of debt for families unable to immediately pay them.

Wesley Wannemacher of Lima, OH, testified at our March 2007 hearing. In 2001 and 2002, Mr. Wannemacher used a new credit card to pay for expenses mostly related to his wedding. He charged a total of about $3,200, which exceeded the card's credit limit by $200. He spent the next 6 years trying to pay off the debt, averaging payments of about $1,000 per year. As of February 2007, he had paid about $6,300 on his $3,200 debt, but his billing statement showed he still owed $4,400.

How is it possible that a man pays $6,300 on a $3,200 credit card debt, but still owes $4,400? Here's how. On top of the $3,200 debt, Mr. Wannemacher was charged by the credit card issuer about $1,100 in late fees, $1,500 in over-the-limit fees, and about $4,900 in interest. He was hit 47 times with over-limit fees, even though he went over the limit only 3 times and exceeded the limit by only $200. Altogether, these fees and the interest charges added up to $7,500, which, on top of the original $3,200 credit card debt, produced total charges to him of $10,700.

In other words, the interest charges and fees more than tripled the original $3,200 credit card debt, despite payments by the cardholder averaging $1,000 per year. Unfair? Clearly, but our investigation has shown that exhorbitant interest charges and fees are not uncommon in the credit card industry.

The week before our March hearing, his credit card company decided to forgive the remaining debt on the Wannemacher account, and while that was great news for the Wannemacher family, that decision didn't begin to resolve the problem of excessive credit card fees and sky-high interest rates that trap too many hard-working families in a downward spiral of debt.

These high fees are made worse by the industry-wide practice of including fees in a consumer's outstanding balance in a manner that would also incur interest charges. Those interest charges magnify the cost of the fees and can quickly drive a family's credit card debt far beyond the cost of their initial purchases. It is one thing for a bank to charge interest on funds lent to a consumer; charging interest on penalty fees goes too far.

Another troubling case history involves Charles McClune, a 51-year- old Michigan resident who is married with one child. Mr. McClune had a credit card account which he closed in 1998, and has been trying to pay off for more than 10 years. Due to excessive fees and interest rates, and despite paying more than four times his original credit card debt of less than $4,000, Mr. McClune still owes thousands on his credit card, with no end in sight.

Mr. McClune first opened his credit card account while in college, in 1986, through a student-targeted credit promotion at a Michigan bank. After leaving college, the credit limit on his card was increased to $4,000. By 1993, although he had not exceeded the credit limit through purchases, Mr. McClune had missed some payments and was assessed interest and fees that pushed his balance over the $4,000 limit. From 1993 to 1996, he exceeded his limit again, on several occasions, due to interest and fee charges. He stopped making purchases on the credit card in 1995.

In 1996, Mr. McClune's credit card account was purchased by Chase Bank. In 1998, Mr. McClune asked Chase to close the account, and Chase did so. Although he never made a single purchase on his credit card while the account was with Chase, Chase repeatedly increased the interest rate on his account, including after the account was closed. In 2002, for example, his interest rate was about 21 percent; by October 2005, it had climbed to 29.99 percent where it remained for more than two years until March 2008; it then dropped slightly to 29.24 percent. The higher interest rates were applied retroactively to Mr. McClune's closed account balance, increasing the size of his minimum payments and his overall debt.

Chase also assessed Mr. McClune repeated over-the-limit and late fees, which began at $29 and increased over time to $39 per fee. Chase cannot locate statements for Mr. McClune's account prior to February 2001, so there is no record of all the fees he has paid. The records in existence show that, since February 2001, he has paid 64 over-the-limit fees totaling $2,200. Those fees stopped after the March 2007 hearing before my subcommittee, in which Chase promised to stop charging more than three over-the-limit fees for a single violation of a credit card limit. In addition to the 64 over-the-limit fees, since February 2001, Chase has charged Mr. McClune nearly $2,000 in late fees.

The records also show that since 2001, Mr. McClune was contacted on several

occasions by Chase representatives seeking payment on his account. If he agreed to make a payment over the telephone, Chase charged him-- without notifying him at the time--a fee of $12 to $15 per telephone payment. When asked about these fees, Chase told the subcommittee that the fees were imposed, because on each occasion Mr. McClune had spoken with a ``live advisor.'' Since 2001, he has paid a total of $160 in these pay-to-pay fees.

Altogether, since 2001, Mr. McClune has paid nearly $4,400 in fees on a debt of less than $4,000. If the more than 4 years of missing credit card bills were available from 1996 to 2000, this fee total would be even higher. In addition, each fee was added to Mr. McClune's outstanding credit card balance, and Chase charged him interest on the fee amounts, thereby increasing his debt by thousands of additional dollars.

In February 2001, Chase records show that Mr. McClune's credit card debt totaled nearly $5,200. For the next 7 years, although he did not pay every month, Mr. McClune paid nearly $2,000 per year toward his credit card debt, but was unable to pay it off. At one time, he paid $150 every 2 weeks for several weeks. Those payments did not bring his debt under the $4,000 credit limit, or reduce his interest rate.

In January 2007, Mr. McClune received a letter from Chase stating that if he made his next payment on time, he would receive a $50 credit on his debt. Mr. McClune cashed out his IRA and paid $4,000 on his credit card debt. Because he made this payment in February, however, he did not receive the $50 credit for an on-time payment. Instead, he was assessed a $39 late fee, a $39 over-the-limit fee, and a $14.95 payment fee for making the $4,000 payment over the telephone.

Mr. McClune was never offered a payment plan or a reduced interest rate by Chase to help him pay down his debt. His credit card bills show that from February 2001 to June 2008, he paid Chase a total of $15,800. If the 4 years of missing credit card bills from 1996 to 2000 were available, his total payments would likely exceed $20,000. In June 2008, his credit card bill showed he was charged 29 percent interest and a $39 late fee on a balance of $3,300.

How could Mr. McClune pay $15,000 to $20,000 on credit card purchases of less than $4,000, and still owe $3,300? His credit card statements since 2001 show that he was socked with over $9,700 in interest charges, $2,200 in over-the-limit fees, $2,000 in late fees, and $160 in pay-to-pay fees. All of these interest charges and fees were assessed by Chase while the account was closed and without a single purchase having been made since 1995. Despite his lack of purchases and payments totaling $15,800, Chase records show that, from February 2001 until June 2008, Mr. McClune was able to reduce his credit card balance by only about $1,850.

Mr. McClune is not trying to avoid his debt. He has made years of payments on a closed credit card account that he has not used to make a purchase in 13 years. He has paid thousands and thousands of dollars-- four and possibly five times what he originally owed--in an attempt to pay off his credit card account. He is still paying. But his thousands of dollars in payments are not enough for his credit card issuer which is squeezing him for every cent it can, fair or not, for years on end.

Tragically, Mr. McClune and Mr. Wannemacher have a lot of company in their credit card experiences. The many case histories investigated by my subcommittee show that responsible cardholders across the country are being squeezed by unfair credit card lending practices involving excessive fee and interest charges. The current regulatory regime--even with the new Federal Reserve regulation--is insufficient to prevent these ongoing credit card abuses. Legislation is clearly needed.

Another galling practice featured in our hearings involves the fact that credit card debt that is paid on time routinely accrues interest charges, and credit card bills that are paid on time and in full are routinely inflated with what I call ``trailing interest.'' Every single credit card issuer contacted by the Subcommittee engaged in both of these unfair practices which squeeze additional interest charges from responsible cardholders.

Here's how it works. Suppose a consumer who usually pays his account in full, and owes no money on December 1st, makes a lot of purchases in December, and gets a January 1 credit card bill for $5,020. That bill is due January 15. Suppose the consumer pays that bill on time, but pays $5,000 instead of the full amount owed. What do you think the consumer owes on the next bill?

If you thought the bill would be the $20 past due plus interest on the $20, you would be wrong. In fact, under industry practice today, the bill would likely be twice as much. That is because the consumer would have to pay interest, not just on the $20 that wasn't paid on time, but also on the $5,000 that was paid on time. In other words, the consumer would have to pay interest on the entire $5,020 from the first day of the new billing month, January 1, until the day the bill was paid on January 15, compounded daily. So much for a grace period! In addition, the consumer would have to pay the $20 past due, plus interest on the $20 from January 15 to January 31, again compounded daily. In this example, using an interest rate of 17.99 percent, which is the interest rate charged to Mr. Wannamacher, the $20 debt would, in 1 month, rack up $35 in interest charges and balloon into a debt of $55.21.

You might ask--hold on--why does the consumer have to pay any interest at all on the $5,000 that was paid on time? Why does anyone have to pay interest on the portion of a debt that was paid by the date specified in the bill--in other words, on time? The answer is, because that's how the credit card industry has operated for years, and they have gotten away with it.

There is more. You might think that once the consumer gets gouged in February, paying $55.21 on a $20 debt, and pays that bill on time and in full, without making any new purchases, that would be the end of it. But you would be wrong again. It is not over.

Even though, on February 15, the consumer paid the February bill in full and on time--all $55.21--the next bill has an additional interest charge on it, for what we call ``trailing interest.'' In this case, the trailing interest is the interest that accumulated on the $55.21 from February 1 to 15, which is the time period from the day when the bill was sent to the day when it was paid. The total is 38 cents. While some issuers will waive trailing interest if the next month's bill is less than $1, if a consumer makes a new purchase, a common industry practice is to fold the 38 cents into the end-of-month bill reflecting the new purchase.

Now 38 cents isn't much in the big scheme of things. That may be why many consumers don't notice these types of extra interest charges or try to fight them. Even if someone had questions about the amount of interest on a bill, most consumers would be hard pressed to understand how the amount was calculated, much less whether it was incorrect. But by nickel and diming tens of millions of consumer accounts, credit card issuers reap large profits. I think it is indefensible to make consumers pay interest on debt which they pay on time. It is also just plain wrong to charge trailing interest when a bill is paid on time and in full.

My subcommittee's hearings also focused on another set of unfair credit card practices involving fair interest rate increases. Cardholders who had years-long records of paying their credit card bills on time, staying below their credit limits, and paying at least the minimum amount due, were nevertheless socked with substantial interest rate increases. Some saw their credit card interest rates double or even triple. At the hearing, three consumers described this experience.

Janet Hard of Freeland, MI, had accrued over $8,000 in debt on her Discover card. Although she made payments on time and paid at least the minimum due for over 2 years, Discover increased her interest rate from 18 percent to 24 percent in 2006. At the same time, Discover applied the 24 percent rate retroactively to her existing credit card debt, increasing her minimum payments and increasing the amount that went to finance charges instead of the principal debt. The result was that, despite making steady payments totaling $2,400 in 12 months and keeping her purchases to less than $100 during that same year, Janet Hard's credit card debt went down by only $350. Sky-high interest charges,

inexplicably increased and unfairly applied, ate up most of her payments.

Millard Glasshof of Milwaukee, WI, a retired senior citizen on a fixed income, incurred a debt of about $5,000 on his Chase credit card, closed the account, and faithfully paid down his debt with a regular monthly payment of $119 for years. In December 2006, Chase increased his interest rate from 15 percent to 17 percent and in February 2007, hiked it again to 27 percent. Retroactive application of the 27 percent rate to Mr. Glasshof's existing debt meant that, out of his $119 payment, about $114 went to pay finance charges and only $5 went to reducing his principal debt. Despite his making payments totaling $1,300 over 12 months, Mr. Glasshof found that, due to high interest rates and excessive fees, his credit card debt did not go down at all. Later, after the subcommittee asked about his account, Chase suddenly lowered the interest rate to 6 percent. That meant, over a 1-year period, Chase had applied four different interest rates to his closed credit card account: 15 percent, 17 percent, 27 percent and 6 percent, which shows how arbitrary those rates are.

Then there is Bonnie Rushing of Naples, FL. For years, she had paid her Bank of America credit card on time, providing at least the minimum amount specified on her bills. Despite her record of on-time payments, in 2007, Bank of America nearly tripled her interest rate from 8 to 23 percent. The Bank said that it took this sudden action because Ms. Rushing's credit score had dropped. When we looked into why it had dropped, it was apparently because she had taken out Macy's and J. Jill credit cards to get discounts on purchases. Despite paying both bills on time and in full, the automated credit scoring system run by the Fair Issac Corporation had lowered her credit rating, and Bank of America had followed suit by raising her interest rate by a factor of three. Ms. Rushing closed her account and complained to the Florida attorney general, my Subcommittee, and her card sponsor, the American Automobile Association. Bank of America eventually restored the 8 percent rate on her closed account.

In addition to these three consumers who testified at the hearing, the Subcommittee presented case histories for five other consumers who experienced substantial interest rate increases despite complying with their credit card agreements.

I would also like to note that, in each of these cases, the credit card issuer told our Subcommittee that the cardholder had been given a chance to opt out of the increased interest rate by closing their account and paying off their debt at the prior rate. But each of these cardholders denied receiving an opt-out notice, and when several tried to close their account and pay their debt at the prior rate, they were told they had missed the opt-out deadline and had no choice but to pay the higher rate. Our subcommittee examined copies of the opt-out notices that the companies claimed to have sent, and found that some were filled with legal jargon, were hard to understand, and contained procedures that were hard to follow. When we asked the major credit card issuers what percentage of persons offered an opt-out actually took it, they told the Subcommittee that 90 percent did not opt out of the higher interest rate--a percentage that is contrary to all logic and strong evidence that current opt-out procedures do not provide fair notice.

The case histories presented at our hearings illustrate only a small portion of the abusive credit card practices going on today. Since early 2007, our subcommittee has received letters and emails from thousands of credit cardholders describing sometimes unbelievable credit card practices and asking for help to stop it. These are more complaints than I have received in any other investigation that we have conducted in that subcommittee, or an earlier subcommittee which I chaired, in more than 30 years now in Congress. The complaints stretch across all income levels, all ages, and all areas of the country.

The bottom line is that these abuses have gone on for far too long. In fact, these practices have been around for so many years that they have, in many cases, become the industry norm. Our investigations have shown that many of the practices are too entrenched, too profitable, and too immune to consumer pressures for us to have confidence that the companies will change them on their own. For these reasons, I hope our colleagues will pass the substitute before us. It is time to return common sense, responsibility, and fairness to the credit card industry.

With thanks and gratitude to the leaders in the Banking Committee, Senators Dodd and Shelby, for the initiative they have taken and the courage they are showing in taking on some very difficult and entrenched practices.

With that, 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 now send a modified Murray amendment to the desk and ask that it be called up.

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

Mr. President, Senator Murray introduced an important amendment yesterday and spoke about it last night. It is intended to make certain that when the Secretary of Defense looks at the question of cost and whether weapon systems should be continued, that at least the Secretary looks into the impact on the industrial base.

The amendment has been modified now in a way that makes this acceptable. The Senator from Washington has put her finger on a very significant issue, which is the industrial manufacturing base of the country. But it has been modified in a way that would not make it difficult or impossible for us to do what we need to do relative to ending the production of weapon systems which, for instance, are no longer useful or have so outlived or outdone the expectations for the system and exceeded the expected expense that they are no longer practical in terms of their continued production.

So she has raised an important issue. It will be considered by the Secretary of Defense when these decisions are made. But the thrust of our bill is to make it possible to end the production of weapon systems if they are so costly that they no longer make sense or if they are not working effectively. That is the thrust of this bill, the heart of the matter. Her contribution does not detract or diminish that important point of our bill.

So we support that modified amendment and ask that the Senate adopt it.

Mr. President, I move to reconsider the vote.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Mr. President, I agree with Senator McCain that we know of no more amendments that are going to

be offered. But there are one or two Senators who may want to speak on either their amendments which have been adopted or on the bill itself, and we will know that within the next few minutes.

What we are exploring in both our cloakrooms is whether we could possibly have a vote on final passage in about 10 or 15 minutes. We do not know if that is a possibility yet. If not, we would vote on final passage sometime probably early this afternoon. But we are trying now to identify what the time would be for a vote on final passage, and, hopefully, we will have more to say on that in the next few moments.

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

Let me thank the Senator from Oklahoma for his amendment. It was just adopted. It is a very significant amendment, and what it reflects is the determination of the Senator from Oklahoma to get the Defense Department to do something that in law they are required to do, which is to give us a financial statement which receives a clean audit opinion.

They haven't done that for decades. We have tried various ways to do it. The voice of the Senator from Oklahoma is a welcome addition to this effort, and we appreciate his amendment and his willingness to work with us on the exact language thereof.

nunn-mccurdy

That is the case. This bill would neither extend nor contract DOD's jurisdiction or authority over the acquisition programs of DOD components that are a part of the intelligence community.

I agree with the chairman of the Intelligence Committee. S. 454 is not intended to amend IRTPA or to modify the respective authorities of the DNI and the Secretary of Defense under that statute. S. 454 does not address the March 2008 memorandum of agreement between the DNI and the Secretary of Defense concerning NIP-funded acquisition programs. It neither ratifies that memorandum of agreement nor requires any modification to the memorandum of agreement.

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

Mr. President, we are approaching the end of our debate. I believe the Senator from Alabama wishes to speak for up to 5 minutes.

I ask unanimous consent that no further amendments be in order, that following the remarks of Senator Sessions, the Senate proceed as provided for under a previous order with respect to passage of S. 454.

Mr. President, I join in thanking Senator McCain and our staffs. The work that has gone into this bill has been extraordinary on the part of both staffs. I will get into that after passage of the bill and have perhaps further thoughts. The role of Senator McCain has been absolutely invaluable and essential. We have worked together very closely; as he puts it, in a nonpartisan way. I thank him and his staff as well as my own.

I ask for the yeas and nays.

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

The motion to lay on the table was agreed to.

Madam President, very briefly, we have done extremely well with this overwhelming vote for the passage of S. 454, the Weapon Systems Acquisition Reform Act. We have done it on a bipartisan basis, which is the way it should be done when it comes to matters of national defense and a whole host of other issues. I am deeply grateful to my friend, our ranking member, Senator McCain.

Of course, a large share of this moment belongs to our hard-working and very talented staff, led on our side by Rick DeBobes and on the Republican side by Joe Bowab. Our special collective thanks must also be given to Peter Levine and Creighton Green on the majority staff and to Richard Fontaine, Chris Paul, and Pablo Corrillo on the minority staff. We thank them all for their hard work. It will bear fruit, we hope within the next month, when we work something out with the House. Then, over the coming years, we will not only save taxpayers' dollars, but we will provide the right equipment to our troops who deserve the best we can get. We will make sure we don't waste these defense dollars, because when we do that, we not only are hurting the taxpayer but we are depriving our troops of funds they need for needed weapon systems.

Mr. President, I ask unanimous consent that after Senator Stabenow is finished, I then be recognized and then Senator McCain be recognized to offer our statements introducing the bill which will be called up after the final passage of the pending legislation.

The suggestion was that we make our opening statements during this lull time. That is fine with Senator McCain and me.

Mr. President, I ask unanimous consent that the pending unanimous consent agreement be modified so Senator Durbin can be recognized in morning business.

The PRESIDING OFFICER (Mrs. Gillibrand.) Without objection, it is so ordered.

Madam President, before the Senator from Illinois leaves the floor, I thank him. He has been a voice, indeed, for people who don't have a voice. He has done that throughout his career both here and in the House. It is a pleasure listening to him.

I believe I asked unanimous consent to have my statement on S. 454 printed in the Record immediately after our legislation is called up this afternoon, and with the permission of Senator McCain, I ask unanimous consent to have his statement also printed in the Record at that time.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 1021, as modified

Mr. President, I support the Helping Families Save Their Homes Act of 2009.

The foreclosure situation in my State of Michigan continues to be dire. According to data released by real estate firm RealtyTrac, even though there are less foreclosure filings than this time last year, there were still over 11,000 Michigan foreclosure filings in January 2009 alone. That is 1 foreclosure filing for every 397 households in just 1 month, which puts Michigan's foreclosure rate at the seventh highest in the Nation. Nationwide, foreclosure filings are up 18 percent compared to this time last year.

Unfortunately, homeowners facing foreclosure are not the only ones being impacted by this crisis. Property values have dropped significantly in many areas, due in large part to the increased number of abandoned and foreclosed homes. These losses in property values also decrease State and local revenue from property taxes, creating shortfalls in revenues and reducing funding for important State and local programs and services.

Over the past year, Congress has taken a number of steps to help reduce the effects of this crisis. Today, the Senate is set to pass legislation that will further expand the tools available to homeowners facing foreclosure and increase access to these important programs. This legislation will expand access to the hope for homeowners program by providing incentives for servicers and lenders who participate in the program and streamlining borrower certification requirements. It will also expand the ability of FHA and Rural Housing to modify loans in order to help a homeowner avoid foreclosure and authorize additional funding for foreclosure prevention activities, including housing counseling and additional fair housing field workers.

Importantly, this act also creates additional enforcement tools to ensure the Department of Housing and Urban Development--HUD--is able to go after bad lenders who break the rules or misuse these programs.

In addition to these improvements, the act makes a number of changes to ensure the safety of depositors' savings, and improve the health of the banks and credit unions that are essential to our economic recovery.

Last year, we increased deposit insurance coverage from $100,000 to $250,000. That provision is set to expire at the end of this year. This act will extend the additional coverage for another 4 years. The act will also increase the borrowing authority of the FDIC to $100 billion and of the National Credit Union Administration to $6 billion. Collectively, these changes will help ensure the security of deposits for years to come.

The act also helps banks and credit unions that may be struggling to pay special assessments for their deposit insurance coverage. Due to the economic downturn, the insurance funds for these institutions are seeking additional funding through special assessments. And for many of these institutions, these assessments are at the absolute worst time-- while they are trying to stabilize their capital positions. The act responsibly spreads out the period over which the insurance funds may seek these assessments, thereby giving the banks and credit unions the ability to preserve and more effectively use their precious capital. Lastly, the act creates a temporary corporate credit union stabilization fund to help ensure the stability and security of those who rely upon corporate credit unions.

This bill includes many improvements to current programs that will help the country dig out of this foreclosure crisis. To do so will require the efforts of Federal, State, and local governments, as well as community and neighborhood organizations, lenders,

brokers, and borrowers. This act will bring much-needed help to many of our homeowners who are trying desperately to save their homes as well as ensure that their savings are protected, and it deserves my support.

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

Mr. President, on behalf of the Senate Armed Services Committee, we are pleased to bring S. 454, the Weapon Systems Acquisition Reform Act of 2009 to the Senate floor. I introduced this bill with Senator McCain on February 23 to address problems in the performance of the major defense acquisition programs of the Department of Defense at a time when the cost growth on these programs has reached levels we simply cannot afford.

Five weeks later, the bill was unanimously approved by the Armed Services Committee, and just last week the President called on Congress to act quickly on the bill. Report after report has shown that there are fundamental problems with the way we buy major weapons systems. In the last month alone, we received three major reports documenting problems with the acquisition system.

First, the Government Accountability Office reported that the cost overruns of the Department's 97 largest acquisition programs now total almost $300 billion over the original program estimates, and the programs are an average of 22 months behind schedule. That is true even though the Department has cut unit quantities and reduced performance expectations on many programs in an effort to expedite production and hold costs down.

Second, we got a report from the Business Executives for National Security, BENS. They reported:

We have an acquisition system at odds with the best

practices in the business world: insufficient systems

engineering capability [and] unrealistic cost estimating that

injects too much optimism in early program execution. . . .

Then, thirdly, there was a Defense Science Board report that said:

Today, the defense acquisition process takes too long to

produce weapons that are too expensive. . . .

As Secretary Gates pointed out in his testimony before our committee earlier this year:

The list of big-ticket weapons systems that have

experienced contract or program performance problems spans

the services.

Here are just a few examples of the kind of problems the

Department of Defense's major acquisition programs have

encountered. The Navy initially established a goal of $220

million and a 2-year construction cycle for the two lead

ships on the Littoral Combat Ship, the LCS program. Those

goals ran counter to the Navy's historic experience in

building new ships and were inconsistent with the complexity

of the design required to make the program successful. As a

result, program costs have tripled and the program is almost

4 years behind schedule.

Next, the Air Force initially estimated that commonality between the three variants, threat varieties, of the Joint Strike Fighter would significantly reduce development costs. However, that level of commonality has proven impossible to achieve. Twelve years after the program started, three of the JSF's eight critical technologies are still not mature. Its production processes are not mature, and its designs are still not fully proven and tested.

As a result, the program is now expected to exceed its original budget by almost 40 percent. That is $40 billion. The Army underestimated the lines of code needed to support the Future Combat System's software development by a factor of three. That led to an increase in software development costs that now approaches $8 billion. So 8 years after the program started, only three of the Future Combat System's 44 critical technologies are fully mature. GAO tells us that the Army has not advanced the maturity of 11 critical technologies since 2003, and that 2 other technologies, which are central to the Army's plans, are now rated less mature than when the program began. As a result, the program is now expected to exceed its original budget by about 45 percent or $40 billion. It is as much as 5 years behind schedule and is likely to be substantially restructured.

There is a set of common problems underlying all these program failures. As a general rule, when the Department of Defense acquisition program fails, it is because the Department relies on unreasonable costs and schedule estimates; establishes unrealistic performance expectations; insists on the use of immature technologies; and adopts costly changes to program requirements, production quantities and funding levels in the middle of ongoing programs.

The bill we bring before the Senate today is designed to address these problems and to help put major defense acquisition programs on a sound footing from the outset by addressing program shortcomings in the early phases of the acquisition process. Our bill is going to address problems with unreasonable performance requirements and immature technologies by requiring the Department of Defense to reestablish systems engineering organizations and developmental testing capabilities that were downsized or eliminated as a result of reductions in the acquisition workforce in the late 1990s; periodically review and assess the maturity of critical technologies; and make greater use of prototypes, including competitive prototypes, to prove that new

technologies work before trying to produce them.

Our bill will address problems with unreasonable cost and schedule estimates by establishing an independent cost estimating office headed by a Senate-confirmed director of independent cost assessment in an effort to ensure that the budget assumptions underlying acquisition programs are sound.

We deal with a similar problem in the Congress by using an independent office, the Congressional Budget Office, to tell us how much direct spending programs are really going to cost. Those of us who have tangled with the CBO over the years know how tough and independent that office can be in insisting on its estimates. We can decide to spend the money anyway, but we do so with our eyes wide open because the cost estimator is not going to back down.

The Department of Defense itself has a model for this type of independence in the Director of Operational Test and Evaluation, the DOT&E. For the last 25 years, that Director, who is appointed by the President, confirmed by the Senate, and reports directly to the Secretary of Defense, has ensured that weapons systems are adequately tested before they are deployed by providing independent certifications as to whether new military systems are effective and suitable for combat. Program officials and contractors may disagree with the Director, but they have discovered they cannot go around him.

Section 104 of our bill would ensure comparable discipline when it comes to cost estimating by establishing a new director of independent cost assessment. Like the DOT&E, a new director will be appointed by the President, confirmed by the Senate, and will report directly to the Secretary of Defense. Like the Director of Test and Evaluation, this official would have the independence and the clout within the Department to make objective determinations and stick to them. A truly independent cost estimating director will not be popular within the Department, as the DOT&E is not popular often, but he will make our acquisition system work better by forcing the Department to recognize the real cost of what our Secretary of Defense has called ``exquisite requirements.''

Only when the Department faces up to these costs will it become more realistic in its requirements and start to make the necessary tradeoffs between cost, schedule, and performance.

Section 104 makes the Director responsible for all cost estimates and cost analyses conducted in connection with major defense acquisition programs and major automated systems programs in the Department of Defense. Under section 104, the Director is required to perform his own cost estimates at four separate points in the life of each program for which the Under Secretary is the milestone decision authority. On other programs, he may rely on an independent cost estimate produced by one of the military departments but only if he determines that the service's independent estimate is unbiased, fair, and reliable.

Our bill would also address problems with costly changes in the middle of a program by putting teeth in the Nunn-McCurdy requirements that currently exist for troubled acquisition programs.

We will establish a presumption that any program that exceeds its original baseline by more than 50 percent will be terminated unless it can be justified--be ``justified;'' and this is critically important-- from the ground up.

Finally, our bill would address an inherent conflict of interest we see on a number of programs today, when a contractor hired to give us an independent assessment of an acquisition program is participating in the development or construction side of the same program.

We held a hearing back in March on S. 454, at which four witnesses, including two former Under Secretaries of Defense for Acquisition, Technology, and Logistics, endorsed the committee's acquisition reform effort. The new Under Secretary for Acquisition, Technology, and Logistics added his support at his March 26 nomination hearing. In addition, we have since received extensive comments on the bill from the Department of Defense, from the defense industry, and from independent experts on the acquisition system.

Senator McCain and I took those comments into consideration and we offered a number of modifications to the bill, which were adopted by the Armed Services Committee at our April 2 markup. We did not make all of the changes requested by the Department or the contractor community. For example, the Department would like to eliminate the provision on the Director of Independent Cost Assessment. Many contractors would prefer we not tighten the rules for organizational conflicts of interest. And both the Department and industry would like us to drop our Nunn-McCurdy amendments, which place tough new requirements on failing programs. We have not done that. These provisions are tough medicine, but the acquisition system needs tough medicine.

In January, Secretary Gates told our committee that we must work together to address the ``repeated--and unacceptable--problems with requirements, schedule, cost, and performance'' from which too many of our defense acquisition programs suffer. On March 4, the President endorsed the goals of the bill, telling the press that ``It's time to end the extra costs and long delays that are all too common in our defense contracting.'' Last week, the President reiterated his position that the bill has his full support, and he urged us to act quickly.

I hope our colleagues will join us. Senator McCain has been instrumental in making this happen, and we and the Nation are appreciative to him for so many things, but we can add this now to the list. Also, our full committee endorsed this bill. It was adopted unanimously in committee. It is a bipartisan bill.

We look forward to beginning consideration of this legislation. And to those Senators who have amendments, we hope they will let us know about them to see if we can work them out, and, if not, arrange a time for their consideration.

Again, I thank my friend from Arizona for all his work on this matter.

I yield the floor.

Mr. President, let me again thank Senator McCain for all he has done to bring us to the floor today. This is a bipartisan bill. It is a major reform of the acquisition system. It is long overdue. It is genuinely and desperately needed.

Mr. President, our staffs have worked hard to try to clear some amendments. We have been able to do so. But in order for us to move these amendments be adopted, they are going to have to have their sponsors come to the floor.

The nine amendments which have been cleared on both sides and which we can accept if we can get the sponsors here would be three amendments of Senator McCaskill, one of Senator Collins, one of Senator Coburn, one of Senator Whitehouse, one of Senator Carper, one of Senator Inhofe, and one of Senator Chambliss.

These amendments have not been filed yet. We have cleared them but they need to be filed by the Senators, and that is the reason we need them to come to the floor.

I will be happy to yield to my colleague.

Mr. President, on a bipartisan basis our committee approved this bill unanimously, the Weapon Systems Acquisition Reform Act of 2009. We have a few minutes so I will just make a few points highlighting this bill.

The Government Accountability Office reported last month, as both Senator McCain and I mentioned earlier, the cost overruns on the Department's 97 largest acquisition programs alone totaled almost $300 billion over the original program estimates. That is true, even though the Department of Defense cut the quantities being purchased and they reduced the performance expectations on many of the programs in order to hold down costs.

Second, we know what the underlying problems are at the Department of Defense. The Department of Defense acquisition programs fail because the

Department continues to rely on unreasonable cost and schedule estimates. They continue to establish unrealistic performance expectations. The Department continues to use immature technologies and to adopt costly changes to program requirements, to production quantities, and to funding levels right in the middle of these programs. When we do that we have unstable programs and costs that are going to rise.

Third, this bill contains a number of specific measures to address the problems I have just identified. The bill has the support of the President, Secretary of Defense, the Government Accountability Office, many independent experts on acquisition policy, and a number of public interest groups. There are many important provisions in this bill, but I want to highlight one of them this afternoon.

We are waiting for sponsors of amendments we have cleared, and those that we have not cleared, to come to the floor. We are open for business.

One of the most important provisions that is in this bill is the provision which establishes a director of independent cost assessment. It is the way to bring real discipline to the DOD's cost estimating process. At present, there is an entity called Cost Assessment Improvement Group, or CAIG, for short. They are supposed to be producing independent cost estimates on DOD acquisition programs. That is their responsibility. However, the CAIG operation is too low down in the bureaucracy. It is not directly accountable and reporting to the Secretary of Defense. It is a committee and includes representatives of each of the Under Secretaries and a number of other senior officials in the Department, chaired by a civil servant in the Senior Executive Service who is the Deputy Director for Resource Analysis in the Office of Program Analysis and Evaluation.

Just almost by saying those words one can understand why it does not have the direct clout we need this person to have. We are going to establish an individual who is responsible, a person who directly reports to the Secretary of Defense just the way in which another critically important office now does, the one that evaluates the technologies.

We are also going to have this person be Senate confirmed. The person who now is Senate confirmed, who does this for a different role, is the Director of Program Analysis and Evaluation. That person, that Director, is--I misspoke. It is the Director of Operational Testing and Evaluation who now is directly accountable to the Secretary of Defense and is Senate confirmed. We want this person who is going to be responsible for cost analysis to be also in that same position and to have that same kind of clout.

Now, the CAIG staff does a terrific job at what they do. I am not, in any way, disparaging the work of the CAIG staff. But a career official in the Senior Executive Service who serves as the Deputy Director of an office that is not even headed by a Presidential appointee simply does not have the independence and the clout that is essential if the cost of these programs is going to be put under control.

By establishing a tough and an independent cost estimator who is Senate confirmed and reports directly to the Secretary of Defense, we believe our bill is going to go a long way toward ending the unrealistic, the overly optimistic cost assessments that are too often used in order to sell the new acquisition programs.

We have to reduce the unnecessary ``gold plating'' of weapon systems. We have to bring the Department of Defense undisciplined requirements system under control.

As I indicated, we are ready to begin addressing amendments.

I yield the floor.

Mr. President, before the Senator from Maine leaves the floor, let me congratulate her on this amendment. She has put her finger on a very significant point. There is a weakness in this system of contract oversight that the Department of Defense has not satisfactorily addressed.

As frequently happens, the Senator from Maine is willing to take on issues which are not necessarily the most glamorous and do not necessarily get the headlines but really get to the inside of what needs to be delved into, needs to be looked at, needs to be analyzed, and needs to be addressed.

This is an amendment which will require the Department of Defense to use a management tool which is called earned value management. They acknowledge it is an important tool, but they also acknowledge too often contractors are not using it and that Government officials who are responsible for overseeing this system and this management tool are inadequately trained, not qualified. There are inadequate mechanisms to enforce contractor compliance.

So the Senator from Maine, as she so often does, has put her finger on a critical issue and is willing to tackle it and make it understandable for the rest of us. I commend her and Senator McCaskill for this amendment, and we are delighted to support it.

I suggest the absence of a quorum.

Mr. President, we very strongly support the amendment and hope it will be acted upon immediately.

Mr. President, I move to reconsider the vote.

I suggest the absence of a quorum.

Mr. President, let me very quickly thank Senator Dorgan for his extraordinary commitment to the issues he has outlined. I don't know of anybody in this body who has devoted anywhere near the time he has to these issues. He has a passion second to none, and I commend him for it. We look forward to working with him on amendments on the authorization bill, and we also more than welcome his cosponsorship of the pending bill. I thank him for the effort he made.

I assume all the materials he has produced will go to the Commission on Contracting Reform, which has been created on wartime contracting. That will probably give us an opportunity, with the power they have, to take some concrete steps. I thank the Senator.

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

Mr. President, Senator McCain and I now, with our staffs, have been able to clear eight amendments.

I ask unanimous consent that the following amendments be called up, considered, and approved en bloc: amendment No. 1044, by Senator Inhofe, which he will speak on; amendment No. 1053, Senator Chambliss; Senator Coburn's amendment No. 1046; Senator McCaskill's amendments numbered 1051, 1049, and 1050; Senator Whitehouse's amendment No. 1047; Senator Carper's amendment No. 1048.

Mr. President, I move to reconsider the vote regarding the amendments agreed to en bloc.

I thank the Senator for making that point. We want to see additional amendments if they are out there. We will do our best to clear them but, if not, debate them. We appreciate the cooperation of everybody.

I yield the floor.

Amendment No. 1044

Mr. President, let me thank Senator McCaskill for her great work on the amendments she has just described. These are significant amendments, important amendments. They reflect the kind of dogged determination the good Senator from Missouri shows every day.

These amendments are so important to the procurement process.

I thank Senator McCaskill for her three amendments, which have strengthened the bill by, No. 1, reinforcing requirements to make trade-offs between cost, schedule, and performance, by directing the Under Secretary of Defense for Acquisition, Technology and Logistics to review requirements and ensure that such trade-offs have been made; No. 2, enhancing the role of combatant commanders in developing requirements by spelling out issues on which their input should be solicited and considered; and No. 3, reinforcing competitive prototyping requirements in the bill by requiring a GAO review and assessment of any waiver on the requirement on the basis of excessive cost.

These amendments improve the bill and reflect Senator McCaskill's consistent dedication to acquisition reform in the best interests of the taxpayers.

I commend the Senator from Missouri.

Mr. President, I thank the Senator from Arizona. What we are trying to do is see if we can't limit amendments. We think we know the amendments that are still out there, but we need people who want to pursue amendments to let us know that and give us an opportunity to look at them, to discuss the amendments with folks.

I have not had an opportunity to talk with the majority leader about whether there will be an opportunity to have votes tonight if we can't work out amendments, but I better not say anything until I have that opportunity to check it out with the majority leader. I know Senator Chambliss is here to be recognized.

I yield the floor.

Amendments Nos. 1053 and 1054

Mr. President, first, let me commend the Senator from Georgia for the amendment which we have adopted, amendment No. 1053, that makes a very useful clarification of the standard for the separate business unit definition on this original conflict-of-interest provision we have.

I wish to commend my friend from Georgia for doing that, for catching that, and for making that suggested change which we have now adopted in amendment No. 1053.

We would oppose amendment No. 1054, if it were offered, for the following reasons: There has been a report from the Defense Science Board Task Force that, because of consolidation in the defense industry, there has been a substantial reduction in innovation and competition.

In order to stimulate that, to make sure the avenues are open for small business, we have a provision in this bill which basically adopts the approach of the Defense Science Board Task Force and is consistent with the concerns they raise about the lack of competition resulting from consolidation.

But, equally important, we hear from small business owners consistently that they have been excluded by prime contractors from competing for subcontract work. When they do that, they, of course, are reserving the business for themselves, for the prime contractors themselves.

As the Senator from Georgia mentions, there is now some oversight. But the problem is, there is no ability to veto, in effect, the decision to keep the work in-house. We would not take over the competition or the contracting bidding process. But what we do provide for is the veto of a decision to keep work in-house, where we think it is anticompetitive or unfair.

It is kind of an in-between position. The Defense Science Board actually suggested we go further than we have. What we do in this bill is say that if a decision is made that the contractor is keeping work in-house, which should be put up to competition to allow small businesses to bid on it, the discretion would be available for the Department to override that decision.

We think that is kind of an appropriate thing to do to protect small businesses, to protect competition, and to make sure there is reasonable oversight of that decision of any prime contractor to keep the work for themselves instead of bidding it out, which, of course, would open it to smaller businesses and greater innovation.

So we would oppose this amendment should it be called up. On the other hand, we want to, again, commend the Senator from Georgia because he has gotten into issues such as this. While we disagree with him on this one, we do want to note he has been very deeply involved in this bill. He has worked with us on this bill, and we greatly appreciate his support for our bill.

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

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

Mr. President, I would call up, on behalf of Senator Bingaman, amendment No. 1055. I understand this has been cleared now. It is a useful clarification of the relationship between the developmental testing requirements in the bill and the testing reforms that were enacted 6 years ago.

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

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Mr. President, I ask unanimous consent that the following be the only first-degree amendments in order to S. 454, other than the committee-reported substitute amendment, that the listed first-degree amendments be subject to second-degree amendments which are relevant to the amendment to which offered; that with respect to any subsequent agreement which provides for a limitation of debate regarding an amendment on the list, then that time be equally divided and controlled in the usual form; that if there is a sequence of votes with respect to these amendments, then there be 2 minutes equally divided and controlled prior to a vote in relation thereto; that upon disposition of the listed amendments, the substitute amendment, as amended, be agreed to, the bill, as amended, be read a third time, and the Senate proceed to vote on passage of the bill.

The amendments I am including in this unanimous consent proposal are as follows:

The Snowe amendment No. 1056 regarding small business contracting; a Thune amendment regarding weapons systems; a Coburn amendment regarding financial management, which we think we may have worked out, by the way; the Chambliss amendment No. 1054 regarding ``make buy;'' the Bingaman amendment, which we have already adopted so I will not refer to that; and the Murray amendment No. 1052 regarding national security objectives.

I thank the Chair, and I thank my friend from Arizona and the staffs who worked this out. I think these amendments then would be considered probably tomorrow morning, although I don't know that we have final word on that. We ought to probably doublecheck that with our leaders, and I would note the absence of a quorum while we do that.

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