Floor Statements

Mr. President, I rise once more to honor an outstanding Federal employee.

Next week, American families will gather around dinner tables in celebration of Thanksgiving.

Thanksgiving is a time for coming together. In earlier ages, members of an extended family usually resided in close proximity to one another. Today, however, the typical American family is spread across the country, with members far in distance even if close in spirit.

Americans of all backgrounds and from all walks of life will be travelling long distances to be with their loved ones. It is no wonder that Thanksgiving weekend is one of the busiest travel periods of the year.

Tens of millions of us will be driving, flying, and taking trains or ferries next week. For some it will be stressful, for others exciting. Most, though, will do it without even realizing how much work goes into keeping American travelers safe.

The Department of Transportation employee whose story I will share today has been instrumental in ensuring the safety of those who travel. But before I tell you about this outstanding public servant, I want to reflect on how important transportation is for America.

From its humble beginnings, ours has been a Nation on the move. In George Washington's day, their mercantile spirit drove our founding generation to dig canals and clear roads across the Appalachians. Steamships and railroads fueled the expansion across the West and helped close the frontier. Air travel in the last century brought every corner of our 50 States ever closer and opened new opportunities for the growth of business and tourism.

This march of progress in transportation technology has not been a smooth ride. When the railroads were new, train wrecks were fairly common. In fact, President-Elect Franklin Pierce was en route to Washington for his inauguration when his train derailed, tragically killing his 11-year-old son.

Travel by ferry or steamship on our rivers and lakes was far from safe in those days. For pioneer families, roads were often impassible during wintertime, and many lost their lives just trying to get to the West. While air travel is the safest form of transportation in our day, it was not always the case.

Making sure that our Nation's ``planes, trains, and automobiles'' are safe remains one of our highest priorities. My home State of Delaware, like every other State--like Montana--depends on a top-notch transportation infrastructure to facilitate economic activity, moving people and goods across markets.

Travel can and should be a safe and fun experience. No one should ever have to worry that the vehicles on our roads, rails, rivers, or in our skies are unsafe. That is where the hardworking men and women of the Department of

Transportation excel. They set and enforce regulations upholding the strictest standards in transportation safety.

The great Federal employee I have chosen to recognize this week has been a leader on safety issues at the Transportation Department's Federal Aviation Administration for 12 years.

Ann Azevedo came to the department in 1997 with nearly two decades of experience in the private sector. Working from the FAA facility in Burlington, MA, when she first started at the FAA, Ann served as the risk analysis specialist for the Engine and Propeller Directorate.

In her current role as chief scientific and technical adviser for aircraft safety analysis, Ann focuses on safety, risk management, and analyzing accidents. From the data she gathers, Ann is able to develop solutions to help prevent future incidents.

Regularly representing the FAA at national and international air safety round-tables, Ann has become a respected voice among those engaged in risk management analysis. She helped write the training manuals for turbofan and turboprop aircraft used across the industry, and she continues to teach risk analysis at the FAA Academy.

Ann holds a bachelor's degree in systems planning and management in applied mathematics and a master's of science in mechanical engineering. When she was once asked how she ended up in her chosen career field, Ann cited her love of math and an influential physics teacher in high school.

Ann was awarded the Arthur S. Flemming Award for public service in 2002 for developing safety solutions that resulted in a 64 percent decrease in the commercial aviation fatality rate between 1998 and 2002. She also was honored as Distinguished Engineer of the Year by the American Society of Mechanical Engineering in 1996.

Her work, and that of all her colleagues at the FAA and other Transportation Department agencies, helps ensure that travel in our country continues to be as safe as possible.

Most importantly, they facilitate the smiles of those arriving safely at a journey's end and seeing their loved ones for the first time after weeks, months, or even years apart.

That remains a central element of Thanksgiving, and I hope all Americans will join me in thanking Ann Azevedo and all the men and women of the Department of Transportation for their hard work keeping American travelers safe.

They keep us, whether on the road, on the rails, at sea, or in the sky, moving ever forward.

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

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

Madam President, I ask unanimous consent to speak as in morning business.

Madam President, 90 years ago this Wednesday, President Wilson signed a proclamation marking the first anniversary of the Armistice that ended World War I. At the time, many believed the cruelty experienced by the combatants and civilian victims of that war would never be surpassed. Unfortunately, as we learned later, they were mistaken. But it was the tragedy of that conflict and the harrowing stories brought back from the trenches that led to the establishment of a day honoring America's veterans.

Veterans Day is a moment of pause to remember the sacrifices made by those who wore our Nation's uniform. It also presents an opportunity to reflect on the dual nature of our Federal Government.

When average Americans hear ``Federal employees,'' they usually think of the 1.8 million civilian government employees. However, it is all too often forgotten that the 1.4 million men and women serving in uniform are also Federal employees. Our Federal workforce has two legs--the civilian and the military. But they march together in step, because we depend on both and they depend on one another.

Without the military, we could not remain free and secure. Without the civilian Federal workforce, we could not keep America on the path toward prosperity and the continued pursuit of happiness. Civilian Federal employees work closely with the military not only to craft strategies and policies but also to pay, arm, and care for our troops.

While some choose to serve in uniform and others in civilian roles, there are many who do both. According to the 2006 study by the Office of Personnel Management, one out of every four civilian Federal employees is a military veteran. Moreover, a fifth of these are disabled veterans. And that is just in the executive branch. This number doesn't even include those who currently serve in the National Guard or the many veterans working right here on Capitol Hill and in the Federal Judiciary. They work in nearly every department and agency.

Not surprisingly, some of the agencies with the highest percentage of veterans are those that relate to law enforcement. The Pentagon too employs many veterans, as does the Department of Homeland Security. Almost half of the civilian employees in the Veterans Benefits Administration are veterans themselves. However, many Americans do not realize that roughly one in every three employees at the Department of Transportation is a veteran. The same is true of the Mine Safety and Health Administration at the Department of Labor. Over a third of those working at the U.S. Mint are veterans. I bet most Americans would be surprised to learn veterans make up a quarter of those who work at the Smithsonian's National Gallery of Art.

It would take me a long time to read through all the departments and agencies with large numbers of veterans on staff. But the point I emphasize is that so many of our Federal employees share a tradition of national service that began with their service in the military.

Today, I wish to continue my weekly tradition of recognizing an outstanding Federal employee by sharing the story of a man from my home State of Delaware. Not only does he fill a full-time job as a Federal technician for the Delaware National Guard, but he also recently completed a year of active-duty service.

CSM Gregory Symes had already served in the Delaware Army National Guard for 7 years when he started working as a Federal technician for the Guard in 1989. A graduate of John Dickinson High School in Wilmington, Gregory trained as an automotive mechanic. While he began his Federal employment in that role, he studied telecommunications and in 2001 became a telecommunications specialist for the Delaware Guard's Director of Information Management.

Gregory has served truly as a mentor to those working alongside him and he has risen to become the senior enlisted adviser to the battalion commander for the 722nd Troop Command. In this capacity, he is often given the task of looking after the well-being of other soldiers in the battalion.

Last month, Gregory completed a 1-year deployment on active duty with the 261st Signal Brigade, and he was stationed at Fort Bliss, NM, in support of Iraqi Freedom. Decorated for his service, Gregory has received the Meritorious Service Medal, the Army Service Ribbon, and the Noncommissioned Officers Professional Development Ribbon, among others.

He continues to serve with dedication and distinction in his Federal role with the Guard, staying in the forefront of ever-changing telecommunications technology. For Gregory and all the other veterans and National Guard members who work as Federal employees, sacrifice and service are a life's pursuit. They are a constant reminder of why Veterans Day is so important.

While on Memorial Day we remember those who never made it home, on Veterans Day we dedicate ourselves to the task of caring for those who did. Care and gratitude for our veterans remains a sacred responsibility, and one that was as relevant to those who fought at Bunker Hill as it is to those stationed in Baghdad today.

George Washington once said:

The willingness with which our young people are likely to

serve in any war, no matter how justified, shall be directly

proportional as to how they perceive the veterans of earlier

wars were treated and appreciated by their country.

I hope all Americans will take the opportunity this week to express their appreciation of all our veterans, especially those who continue to serve in the public as Federal employees. I invite my colleagues to join me in thanking Command Sergeant Major Symes, the Federal employee of the Delaware National Guard, and all who have served our Nation in uniform. They continue to make us all proud.

Remembering Samuel J. Heyman

Madam President, I cannot let this occasion pass without also noting with sadness the passing yesterday of Samuel J. Heyman. Each week, I have been speaking from this desk about our excellent Federal employees. I continue to do so because I believe that Americans need to hear more about the outstanding men and women who serve in government, and we need to do more to encourage our graduates to consider careers in public service.

Samuel J. Heyman was a champion of this cause. Mr. Heyman attended Yale University and Harvard Law School, and he felt called to public service as a young law graduate in 1963. Working at the Justice Department under then Attorney General Robert F. Kennedy, Mr. Heyman served as chief assistant U.S. attorney for his native Connecticut.

After 5 years, he left government service to take over his family's real estate development business, but he would never forget the sense of duty and pride he felt as a Federal employee. Mr. Heyman knew that Federal employees were those who shared his level of determination and work ethic. He knew that the men and women who choose to spend their careers working for the American people not only deserve more credit than they typically receive, but he understood as well that they have the benefit of looking back on their careers with the great satisfaction of having made a difference.

It is for that reason that, in 2001, Mr. Heyman founded the Partnership for Public Service, which promotes Federal employment, and he received the Presidential Citizen Medal last year for his work as its chairman. The partnership also awards annual Service to America Medals in several categories, which have affectionately been called ``Sammie'' in his honor. I have been privileged to be able to share the stories of Sammie winners from this desk.

It is with deep regret that I share with my colleagues this news of Mr. Heyman's passing. A respected business leader, philanthropist, and a champion of public service, Mr. Heyman will be truly missed. My thoughts are with his wife Ronnie, their four children, and their nine grandchildren, as well as his mother, who also survives him.

I also extend my condolences to the Partnership for Public Service family. I know they will continue working to carry on Mr. Heyman's legacy. I hope my colleagues will join me in remembering Samuel J. Heyman and his tireless efforts to inspire a new generation to pursue careers in public service and to celebrate the enormous contribution made by Federal employees to our great Nation.

Madam President, I yield the floor.

I suggest the absence of a quorum.

Madam President, I rise today primarily to note for the Record two recent speeches: one by Chairman Mary Schapiro and the second by SEC Commissioner Luis Aguilar.

Last year, rapid changes in the markets, opaque practices, and a lack of effective regulation caused a devastating financial debacle from which our Nation is still struggling to recover.

The lesson was simple: when our regulators fail to keep pace with market developments and are taken off the field, the consequences can be disastrous.

With this lesson in mind, I wrote to Chairman Mary Schapiro on August 21 urging the Securities and Exchange Commission to undergo a comprehensive ``ground up'' review of a broad range of market structure issues in order to ensure our regulatory capacity is up to speed with changes in the market.

I am pleased that the SEC is in the process of conducting such a review and has already acted to address flash orders and dark pools, two sources of potential unfairness that are opaque and insufficiently regulated. But a few narrowly tailored rule proposals are not enough to restore investor confidence and avert a future disaster. We need regulators, lawmakers, and investors to embrace a new approach to regulation--one that values fairness and transparency over liquidity and nips systemic risks in the bud.

Accordingly, I applaud Chairman Schapiro's speech, entitled ``The Road to Investor Confidence,'' which she delivered at the Securities Industry and Financial Markets Association annual conference on October 27.

Chairman Schapiro outlined the road towards a lasting regulatory framework and a fairer market, asserting:

To me, we don't get there by assuming all is well now, and

reverting to the practices that got us to where we are. We

don't get there by letting newly engineered financial

instruments escape the umbrella of regulation and the natural

disinfectant of meaningful market transparency. And, we

certainly don't get there by permitting, or even advocating,

for gaps in our regulatory landscape. I believe those are the

directions that send us back to another financial crisis.

And, we cannot afford to let that happen.

Chairman Schapiro also discussed the importance of adopting a forward-looking approach to regulation, particularly with respect to rapid technological developments like high frequency trading.

She said:

I believe we need a deeper understanding of the strategies

and activities of high frequency traders and the potential

impact on our markets and investors of so many transactions

occurring so quickly.

Following the chairman's lead, Commissioner Aguilar also struck a thoughtful chord with respect to upcoming regulatory reform in an impressive speech delivered at George Washington University Law School last Friday.

Commissioner Aguilar underscored the need for meaningful reform, stating:

[T]here is a growing concern that we might miss the

opportunity to make the transformational changes required to

address the realities of today's financial markets--and to

prepare for the unforeseen challenges of tomorrow. Moreover,

I fear that we may go down the path of piecemeal changes that

give the illusion of regulatory reform but leave us in danger

of repeating our recent history. This ``false comfort'' would

be a recipe for disaster.

Commissioner Aguilar also highlighted specific recommendations that should guide financial reform efforts. He asserted the focus of systemic risk regulation should be on investor protection and, should ensure ``the continuation of systemically important market functions, not institutions. . . . To that end, systemic risk regulation should facilitate an environment where no institution is indispensable and where other firms can step in to meet the needs of the market.''

Commissioner Aguilar went on to endorse the creation of a council of regulators which would better ``identify accumulation of risks . . . [provide] for a diversity of perspectives that could make it more likely that a risk will be identified . . . facilitate the free flow of information among regulators . . . [and] avoid the inherent tensions and conflicts that arise when one regulator has combined responsibilities over monetary policy, a vested interest in the safety and soundness of particular institutions, and plenary powers to address systemic risk.''

In addition to laying the foundation for systemic risk regulation, Commissioner Aguilar also maintained that regulators must be empowered to address a broad range of market practices, like hedge funds and asset-backed securities, for example, in order to ``not only close today's gaps but to look ahead and [use] flexible powers that can be deployed as an unknown future unfolds.''

Undoubtedly, reform is long overdue, and so I am pleased this body appears set to undertake financial regulatory reform legislation in the coming months. I look forward to working with my colleagues to enact meaningful reforms.

With Chairman Schapiro and Commissioner Aguilar's words as a guide, Congress should grant regulators the authority to ensure our markets are fair, stable and transparent in order to prevent another disaster. Mr. President, failure to do so is simply not an option.

Madam President, Chairman Schapiro and Commissioner Aguilar's speeches may be found at: http://www.sec.gov/news/speech/2009/ spch102709mls.htm (Schapiro) http://www.sec.gov/news/speech/2009/ spch110609laa.htm (Aguilar).

Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on November 10, 2009, at 10 a.m., to conduct a hearing entitled ``ending veterans' homelessness.''

Mr. President, I ask unanimous consent that the Committee on finance be authorized to meet during the session of the Senate on November 10, 2009, at 10 a.m., in room 215 of the Dirksen Senate Office Building, to conduct a hearing entitled ``Climate Change Legislation: Considerations for Future Jobs.''

Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on November 10, 2009, at 9 a.m.

Mr. President, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions be authorized to meet, during the session of the Senate, to conduct a hearing entitled ``The Cost of Being Sick: H1N1 and Paid Sick Days'' on November 10, 2009. The hearing will commence at 10 a.m. in room 430 of the Dirksen Senate Office Building.

Mr. President, I ask unanimous consent that the Committee on Homeland Security, and Governmental Affairs be authorized to meet during the session of the Senate on November 10, 2009, at 10 a.m.

Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet during the session of the Senate on November 10, 2009, at 10 a.m., in room SD-226 of the Dirksen Senate Office Building, to conduct a hearing entitled ``Strengthening Our Criminal Justice System: Extending the Innocence Protection Act.''

Mr. President, I ask unanimous consent that the Committee on Intelligence be authorized to meet during the session of the Senate on November 10, 2009, at 2:30 p.m.

First, Mr. President, I want to thank Senator Hagan not just for putting this on but for her leadership all along on health care reform, and I look forward to working with her because of her great leadership. I appreciate the opportunity to join my colleagues on the floor to highlight health care innovations in our home States that can serve as models for national reform.

Delaware is a national leader in health care IT--information technology--and I want to take a couple of minutes this morning to talk about a truly innovative approach to health care record keeping in my State. It is called the Delaware Health Information Network.

The Delaware Health Information Network, which we call DHIN, was authorized 12 years ago and went live in 2007, becoming the first operational statewide health information exchange. A public-private partnership of physicians, hospitals, laboratories, community organizations, and patients, the DHIN provides for the fast, secure, and reliable exchange of health information among the State's many medical providers. As a result of its early success, the DHIN was one of the nine initial health information exchanges selected to participate in the U.S. Department of Health and Human Services' national health information network trial implementations. Among those nine, it was the first State to successfully establish a connection with the trial.

Right now, more than 50 percent of all providers in the State--nearly 1,300--participate in the DHIN. More than 85 percent of all lab tests are entered into the network, and 81 percent of all hospitalizations are captured by the exchange. As of June of this year, the DHIN held over 648,000 patient records, and it conducts 40 million transactions a year.

Participating providers have a choice of three options to receive lab, pathology, and radiology reports, as well as admission face sheets: they can have them sent directly into a secure in-box, similar to an e-mail account, they can have them faxed to their office, or they can get the results from an electronic medical records interface on the Web. All three provide information in a timely manner that protects the privacy of the patient.

Our State of Delaware receives four very tangible benefits from DHIN, and these are listed on this chart.

First, the DHIN provides a communication system between providers and organizations--something that did not exist previously. Individual physician offices can now easily discover if hospitals, such as Christiana, Bayhealth, and Beebe Medical Center, have admitted their patients. Doctors and hospitals can also get lab results back

from the State's clinical laboratories in a timely manner.

Second, the information exchanged electronically through DHIN helps improve the quality of care being delivered in the State. When providers have access to better, faster information at the time and place of care, either in a doctor's office or an emergency room, those providers can make better decisions and reduce the chance of medical errors. Knowing what medications a patient is on or what coexisting conditions a patient may have can give the provider more complete information when delivering care, reducing the chance of an adverse outcome.

Third, the DHIN can help reduce the cost of care within the health care system. That is what we are all looking for out of health care reform--cost reduction. With nearly 650,000 patient records in the system, providers can know what tests and procedures have already been ordered, cutting out inadvertent test duplication. In addition, the DHIN can help improve disease management by allowing multiple providers treating a person to communicate and better align the treatments and prescriptions for a particular patient.

Finally, No. 4, the DHIN can enhance privacy within the medical health care system. The DHIN is a secure system that can only be accessed by participating providers and organizations. It contains access controls, regulating who can use the network, and it contains audit requirements to ensure there are no breaches in patient privacy.

While the DHIN is still growing, it has already helped the patient care delivery system in Delaware. As it moves to include all providers in the State and works with other States' information exchanges to share ideas and successes, the DHIN will help lead our country to a widespread adoption of health information technology.

The stimulus act contained $19 billion to promote the adoption of health IT nationwide, and the health reform effort promises to build on this momentum with even more resources. I believe it is essential that health reform boost the integration of information technology such as that provided by the DHIN throughout the health care system.

As I have said many times, it is time to gather our collective will and do the right thing during this historic opportunity by passing health care reform. We must include incentives to expand the utilization of health information technology. We can do no less. The American people deserve no less.

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

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

Mr. President, I rise today because I am deeply concerned that just over 1 year since the collapse of Lehman Brothers, a failure that helped send us to the brink of depression, Wall Street is essentially unchanged. Congress and the SEC have not enacted any reform, and the American people remain at risk of another financial debacle--not just because the same practices that led to the crisis 14 months ago are continuing but from new practices that are leading to new problems and new systemic risks.

Last year, the financial world almost came to an end. Yet most of Wall Street then believed that no government review or additional regulation was necessary--right up until the moment government had to step in and save it.

We had been assured that the system was sound. We were assured that a host of checks and balances were in place that would suffice. We were assured that companies have to report their financial holdings with full disclosure and transparency. We were assured that accountants have to verify those assets. We were assured that due diligence is conducted on every deal and transaction. We were assured that boards of directors have a fiduciary duty to undertake prudent risk management. We were sure that management wanted their companies to thrive

over the long term. Most important, we were assured that regulatory bodies and law enforcement agencies are in place to police the system. But those safeguards did not prevent the disaster.

In the past 10 years or more, one of the most important safeguards-- the regulators--had simply given up on the importance of regulation. We believed and they believed that markets could police themselves, they would self-regulate, and so in effect we pulled the regulators off the field.

We now know the confluence of events that led to the disaster, and there is blame enough to go around. We failed to regulate the derivatives market. Government-backed agencies, such as Fannie Mae and Freddie Mac, pushed to make housing available for greater numbers of people; unscrupulous mortgage brokers pushed subprime mortgages at every opportunity; and investment bankers pooled and securitized those subprime mortgages by the trillions of dollars and sold them like hotcakes. Rating agencies, left unmonitored by the SEC, incredibly stamped these pools with AAA ratings.

The SEC, which changed the capital-to-leverage ratio level for investment banks from 30-and-50-to-1, allowed these banks to buy huge pools of these soon-to-be toxic assets, and investment banks wrote credit default swaps and then hedged those risks without any central clearinghouse, without any understanding of who was writing how much or what it all meant--all of this, incredible to believe, without any regulation or oversight.

This chart conveys that banks were involved in high-risk return investments that were largely unregulated. Then, crash--the housing bubble burst and a disaster of truly monumental proportions struck. Americans lost $20 trillion in housing and equity value during the ensuing financial meltdown. The economy lurched into free fall, and the GDP shrunk by a staggering percentage not seen since the 1950s.

What happened next? The American taxpayer, the deep-pocket lender of last resort, had to ride to the rescue. We can barely even count the trillions of dollars in taxpayer money that have gone into bailing out the banks, AIG, and a number of other financial institutions. That is not including the billions of taxpayer dollars we had to spend to stimulate the economy.

We must never let this happen again. Yet here we are 1 year later, with no immediate crisis at hand, and we are falling back into complacency. The credit default swap market remains unregulated. The credit rating agencies have not yet been reformed. The banks are back to their old habits--paying out billions of dollars in bonuses for employees who are still engaged in high-risk, high-reward practices.

What is the great lesson we should have learned from the financial disaster of 2008? When markets develop rapidly and change dramatically, when they are not regulated, and when they are not fully transparent, it can lead to financial disaster. That is what happened in the credit default swap market--rapid and dramatic change in the market, no regulation, and opaqueness, which equaled disaster. This must never happen again.

I look forward to working with my colleagues to regulate the derivatives markets, to ensure that credit default swaps are traded on an exchange or at least cleared through a central clearinghouse with appropriate safeguards enforced, and to enact meaningful financial regulatory reforms.

At the same time, we need to be looking carefully to see if these three deadly ingredients--rapid technological development, lack of transparency, and a lack of regulation--are appearing again in other markets. There is no question in my mind that in today's stock markets, those three disastrous ingredients do exist.

Due to rapid technological advances in computerized trading, stock markets have changed dramatically in recent years. They have become so highly fragmented that they are opaque--beyond the scope of effective surveillance--and our regulators have failed to keep pace.

The facts speak for themselves. We have gone from an era dominated by a duopoly of the New York Stock Exchange and Nasdaq to a highly fragmented market of more than 60 trading centers.

Dark pools, which allow confidential trading away from the public eye, have flourished, growing from 1.5 percent to 12 percent of market trades in under 5 years.

Competition for orders is intense and increasingly problematic. Flash orders, liquidity rebates, direct access granted to hedge funds by the exchanges, dark pools, indications of interest, and payment for order flow are each a consequence of these 60 centers all competing for market share.

Moreover, in just a few short years, high-frequency trading, which feeds everywhere on small price differences in the many fragmented trading venues, has skyrocketed from 30 percent to 70 percent of the daily volume.

Indeed, the chief executive of one of the country's biggest block trading dark pools was quoted 2 weeks ago as saying that the amount of money devoted to high-frequency trading could ``quintuple between this year and next.''

Let's put the last chart back up for a second. Again, we have learned that if you have rapid and dramatic change, opaqueness, and no effective regulation, which is exactly what exists in the high frequency trading markets, we have a disaster. We should look at this in terms of high-frequency trading. We have no effective regulation in these markets.

Last week, Rick Ketchum, the chairman and CEO of the Financial Industry Regulatory Authority--the self-regulatory body governing broker-dealers--gave a very thoughtful and candid speech, which I applaud. In it, Mr. Ketchum admitted that we have inadequate regulatory market surveillance.

His candor was refreshing but also ominous:

There is much more to be done in the areas of front-

running, manipulation, abusive short selling, and just having

a better understanding of who is moving the markets and why.

Mr. Ketchum went on to say:

[T]here are impediments to regulatory effectiveness that

are not terribly well understood and potentially damaging to

the integrity of the markets . . . The decline of the primary

market concept, where there was a single price discovery

market whose on-site regulator saw 90-plus percent of the

trading activity, has obviously become a reality. In its

place are now two or three or maybe four regulators all

looking at an incomplete picture of the market--

And this is important--

and knowing full well that this fractured approach does not

work.

At the same time that we have no effective regulatory surveillance, we have also learned about potential manipulation by high-frequency traders.

Last week, the Senate Banking Subcommittee for Securities, Insurance, and Investment held a hearing on a wide range of important market structure issues. At the hearing, Mr. James Brigagliano, co-acting director of the Division of Trading and Markets, testified that the Commission intends to do a ``deep dive'' into high-frequency trading issues due to concerns that some high-frequency programs may enable possible front-running and manipulation.

Mr. Brigagliano's testimony about his concerns was troubling:

. . . if there are traders taking position and then

generating momentum through high frequency trading that would

benefit those positions, that could be manipulation which

would concern us. If there was momentum trading designed--or

that actually exacerbated intra-day volatility--that might

concern us because it could cause investors to get a worse

price. And the other item I mentioned was if there were

liquidity detection strategies that enabled high frequency

traders to front-run pension funds and mutual funds, that

also would concern us.

Reinforcing the case for quick action, several panelists acknowledged that it is a daily occurrence for dark pools to exclude certain possible high-frequency manipulators. For example, Robert Gasser, president and CEO of Investment Technology Group, asserted that surveillance is a ``big challenge'' and that improving market surveillance must be a regulatory priority.

He said:

I can tell you that there are some frictional trades going

on out there that clearly look as if they are testing the

boundaries of liquidity provision versus market manipulation.

But none of the panelists, when asked, felt responsible to report any of their suspicions of manipulative activity to the SEC. That is up to the regulators and their surveillance to stop, they believe.

Finally, at the end of the hearing, Subcommittee Chairman Reed asked about the reported arrest of a Goldman Sachs employee who allegedly had stolen code from Goldman used for their high-frequency trading programs.

A Federal prosecutor, arguing that the judge should set a high bail, said he had been told that with this software, there was the danger that a knowledgeable person could manipulate the markets in unfair ways.

The SEC has said it intends to issue a concept release to launch a study of high-frequency trading. According to news reports, this will happen next year. I do not believe next year is soon enough. We need the SEC to begin its study immediately. Where is the sense of urgency?

Our stock markets are also opaque. Again, I refer to Chairman Ketchum's speech:

There are impediments to regulatory effectiveness that are

not terribly well understood and potentially damaging to the

integrity of the markets.

He went on to say:

We need more information on the entities that move

markets--the high frequency traders and hedge funds that are

not registered. Right now, we are looking through a

translucent veil, and only seeing the registered firms, and

that gives us an incomplete--if not inaccurate--picture of

the markets.

Senator Schumer echoed this theme at last week's hearing. He said:

Market surveillance should be consolidated across all

trading venues to eliminate the information gaps and

coordination problems that make surveillance across all the

markets virtually impossible today.

Let me repeat: `` . . . market surveillance across all the markets virtually impossible today.'' I totally agree with that, and none of the industry witnesses disagreed with Senator Schumer. That is why the SEC must not let months go by without taking meaningful action. We need the Commission to report now on what it should be doing sooner to discover and stop any such high-frequency manipulation.

Where is the sense of urgency?

We must also act urgently because high-frequency trading poses a systemic risk. Both industry experts and SEC Commissioners have recognized this threat. One industry expert has warned about high- frequency malfunctions:

The next LongTerm Capital meltdown would happen--

And get this--

in a five-minute time period . . .

``The next LongTerm Capital meltdown would happen in a five-minute time period.''

At 1,000 shares per order and an average price of $20 per

share, $2.4 billion of improper trades could be executed in

[a] short timeframe.

This is a real problem. We have unregulated entities--hedge funds-- using high-frequency trading programs, interacting directly with the exchanges.

As Chairman Reed said at last week's hearing, nothing requires that these people even be located within the United States. Known as ``sponsored access,'' hedge funds use the name of a broker-dealer to gain direct trading access to the exchange but do not have to comply with any of the broker-dealer rules or risk checks.

SEC Commissioner Elisse Walter has recognized this threat:

[Sponsored access] presents a variety of unique risks and

concerns, particularly when trading firms have unfiltered

access to the markets. These risks could affect several

market participants and potentially threaten the stability of

the markets.

Let me repeat that:

These risks could affect several marketing participants and

potentially threaten the stability of the markets.

This is from a member of the SEC. Even those on Wall Street responsible for overseeing their firms' high-frequency programs are not up to speed on the risks involved, according to a recent study conducted by 7city Learning. In a survey of quantitative analysts who design and implement high-frequency trading algorithms, two-thirds asserted their supervisors ``do not understand the work they do.''

And though the quants and risk managers played a central role exacerbating last year's financial crisis, 86 percent of those surveyed indicated their supervisor's ``level of understanding of the job of a quant is the same or worse than it was a year ago,'' and 70 percent said the same thing about their institutions as a whole.

I agree with the market expert and 7city director Paul Wilmott who said:

These numbers are alarming. They indicate that even with

the events of the past year, financial institutions are still

not taking the importance of financial education seriously.

Let me repeat that.

. . . They indicate that even with the events of the past

year, financial institutions are still not taking the

importance of financial education seriously.

Where is the urgency? Time is of the essence. We must act now.

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

Mr. President, I ask unanimous consent to speak as in morning business for up to 5 minutes.

Mr. President, I rise once again to honor the service of one of our country's great Federal employees. Today, during these uncertain times, the American people face many challenges--one of them we share in common with all people throughout the world. What I speak of is the threat posed by climate change.

Just this morning, in a special joint session, we heard German Chancellor Angela Merkel on the importance of working together internationally to address climate change. We have come so far in the past three decades but much more needs to be done. So much depends on our ability to address this problem, including the long-term stability of our economy and our national security.

Since its creation in 1970, the Environmental Protection Agency has been at the forefront of reversing climate change. This week's great Federal employee not only spent over 20 years at the Agency, he is also someone we can thank for his leadership in implementing a landmark agreement that has already helped slow down climate change.

When Dr. Stephen Andersen first came to the EPA in 1986, he already had over a decade of experience in the field of climate and ozone protection. During his first year as part of the EPA's Stratospheric Protection Team, he worked with Soviet scientists to negotiate a joint effort to map the ozone by satellite. This was the first-ever United States-Soviet joint mission in space.

The following year saw the adoption of the Montreal Protocol in 1987. This crucial international agreement led to dramatic reductions in the chemicals that contribute to ozone depletion.

Stephen began serving as cochair of the Montreal Protocol Technology and Economic Assessment Panel in 1988. He worked tirelessly to convince hundreds of military and industrial experts to phase out the use of ozone-depleting chemicals on a voluntary basis. Over the course of 20 years, the Montreal Protocol was so successful that it helped prevent annual emissions of 11 billion metric tons of carbon dioxide. According to a crucial study by a team of environmental scientists Stephen himself led, the Montreal Protocol may have delayed the impact of climate change by 7 to 12 years. That doesn't even count the effects of other reductions made as a result of the treaty's influence.

Stephen led an effort a few years ago to encourage several of the world's highest emitting nations to strengthen the original treaty. His leadership led to nine countries agreeing to speed up the elimination of hydrofluorocarbons.

Today, Stephen continues to work on the science of combating climate change. He has focused much of his energy on helping to create voluntary partnerships between the EPA and the business community in order to promote green practices.

Stephen won a Service to America Medal last year for his long and distinguished career as an outstanding public

servant. I hope my colleagues will join me in honoring Dr. Stephen Andersen's service and that of all the dedicated employees of the Environmental Protection Agency. I know that as we continue making progress on this front, they will play an important role in America's global environmental leadership.

Mr. President, I yield the floor.

Will the Senator yield for a question?

Isn't it true that when these people don't get prevention, don't have a doctor, don't get the vaccines and the shots they need and they don't go to the emergency room until they are very sick, what happens is they go to intensive care or something or they have a much more serious illness that can go on for weeks and months under intensive care and the price goes up and up?

Will the Senator yield?

This thing with preexisting conditions is incredible. You hear this everywhere you go. In Dover, DE, we have Angela Austin, a recent mother. She works as a bartender. Most of her earnings come from tips. She doesn't get health insurance from her employer.

When Angela became pregnant, she tried to find private health insurance, but she was repeatedly denied coverage because her pregnancy was considered a preexisting condition. She applied for Medicaid--to find prenatal care for her and the baby--but was denied coverage because she earned $200 more than the monthly limit allowed.

She called organizations and clinics and was unable to find a payment plan she could afford. Midway through her pregnancy, Angela decided to cut back her work hours so she could qualify for Medicaid. She worked all 9 months of the pregnancy and delivered the baby on May 27.

The Medicaid coverage she got was especially crucial because she had complications from hyperthyroidism and was able to get the necessary prescriptions to control the condition.

The story gets even worse. Angela was so anxious that everything possible be done to ensure a healthy baby, the system threw up roadblocks.

Pregnancy should not be considered a preexisting condition. What is more, no one should be denied coverage because of a preexisting condition. There are many cases where people are totally healthy, and they have been denied coverage because of preexisting conditions. We are going to pass a bill that eliminates not being acceptable for preexisting conditions.

Will the Senator yield for a minute?

This is another example. It is not just Delaware, Maryland, Minnesota, California, or New York. On the same subject, Ian Kaufman--no relation--moved to Delaware right out of college in 1990. Unfortunately, like far too many Americans today, he got laid off from his job. To get back on his feet, he wanted to start his own business. In the process, Ian picked up COBRA coverage to ensure his family maintained health care insurance. When he first signed up for COBRA coverage, his monthly premium was $1,800--a lot of money each month. Thanks to the COBRA provisions, however, in the stimulus bill, Ian saw his payments reduced by 66 percent, which made his monthly premiums much more manageable. However, this premium assistance will soon run out, and then he will be back once more to paying $1,800 a month. In anticipation of higher COBRA payments, Ian applied for coverage at BlueCross BlueShield but was turned down. They never gave him a reason. He suspects--what we were talking about earlier--that there was a preexisting condition of one of his daughters.

Ian worries, like so many Americans, that the high cost of providing health care to his family, in addition to the difficulty of finding a willing policy provider, will affect his ability to stick with his startup business--the point my colleagues were making of starting up a business and being worried about health care.

Unfortunately, Ian's health insurance predicament as a self-employed businessman is not uncommon. There are entirely too many sole proprietors and small businesses that cannot afford health policies for themselves, their families, and any employees they might have, thereby killing the innovators of our system, the people who create the jobs, the people who made America great, the small businesspeople. They cannot go into business because they are worried about health care not just for their employees, but they have to worry about health care for themselves and their families. We have to change that if we are going to get innovation back in the country and small businesses up and running.

One of the great ironies in this whole health care debate, which is full of ironies, is I talk to so many small businesspeople, and they are scared of the public option. They have been scared by the ads and things on television. As you say, for a small businessperson, the public option is going to be their choice to get the health care they need, simple health care that is laid out for them that makes a lot of sense.

One of the big things we have to get through to people is exactly what the story is here and what really will help them get their health insurance so we can have small businesses built up, get more employees, create more jobs, and create the jobs we need for the country.

Again, once more, the irony. Isn't it an incredible irony that people come to the floor and talk about reducing the deficits, reducing the deficits, reducing the deficits, but they don't have health care reform. We know the major cause for the increase in deficits is Medicare and Medicaid, not because they are bad programs but because health care costs explode. There is no way they cannot get greater. That is our biggest challenge in terms of deficit reduction. We have to do something about Medicare and Medicaid costs.

People talk about deficits and then say we don't need health care reform, why don't we slow down, we don't need it now, this is not important. We cannot deal with our deficits if we don't deal with health care costs because without dealing with health care costs, we cannot deal with Medicare and Medicaid. The Senator is absolutely right.

Mr. President, my home State of Delaware has been the recipient of some good news this week and so I thought this would be a good time to come to the floor and discuss how Delaware is leading the way in responding to the challenge of climate change and creating green jobs.

This is a critical time in our history. At stake are the jobs and economic future of our children and grandchildren. Unfortunately, as we emerge from this economic crisis, many of the jobs we have lost will not return. To make a full recovery, we need to create the next generation of jobs. I believe that the jobs leading the way will be the clean and green energy industries of tomorrow.

I am proud to say that my home State of Delaware is already leading the way.

Like many States, my State once had a proud record of automobile manufacturing. All of my colleagues know, though, that the recent economic downturn has hit already downtrodden auto companies especially hard, and, in recent months, our two auto plants were closed.

This is not simply a question of economics.

For the families who saw paychecks end and the dignity of work disappear, these closures were a real personal tragedy.

The men and women who worked in our auto plants are some of the most dedicated, capable workers I have ever met. They embraced an American dream--the chance to work hard at a decent job and provide for a family. And then, in the midst of an economic crisis not seen in decades, they found themselves looking to start over.

They did their job. They held up their side of the bargain. They went to work everyday and worked hard at their job--and in the process made our GM plant and our Chrysler plant two of the most productive and efficient plants around.

That is why we from Delaware have been fighting to help them land on their feet. We know the potential of these trained, hard-working, eager employees, and we know the decency of these families.

Just recently, I was able to join Vice President Biden, Delaware Governor Markell, and our congressional delegation in announcing that Fisker Automotive will begin building plug-in hybrids at the old General Motors Boxwood Road plant.

In a few years time, we expect that Fisker will be building cars that get more than 100 miles per gallon--and building as many as 100,000 of them per year. This will mean nearly 1,500 permanent manufacturing jobs.

Before we get there, there will be hundreds or thousands of good construction jobs created by revamping and renovating the plant to produce these state-of-the-art vehicles.

But this happy tale is not possible without crucial support. Fisker was awarded a loan by the Department of Energy, part of a program designed to jump start the production of advanced vehicles.

At the same time, Governor Jack Markell has worked hard to keep the plant in condition to be retooled, and to convince Fisker that Delaware offers the ideal market to begin building tomorrow's cars.

And I believe the clincher was the highly trained workforce we had to offer.

In fact, Fisker will be hiring many of the GM employees to work back in their old building--to work at building a state-of-the-art advanced car.

At the same time, the University of Delaware has announced a plan to buy the old Chrylser Newark plant and convert it to an advanced research facility. These 272 acres adjacent to the campus are truly, as University of Delaware president Patrick Harker has said, a ``once in a lifetime opportunity.''

And the university has indicated that much of this research and development to be carried out there will be toward the energy technologies we will need to combat climate change and to compete in tomorrow's economy.

In fact, the university is already a leader in any of these fields. It is a recognized center of excellence for solar power research and education, as designated by the Department of Energy, and a center of excellence for composite materials as well.

Just this week, the university was awarded nearly $4.5 million for research into magnetic materials from a new program called ARPA-E.

The Advanced Research Projects Agency--Energy has a mission, ``to develop nimble, creative, and inventive approaches to transform the global energy landscape while advancing America's technology leadership.''

The research the University of Delaware is doing could greatly increase the efficiency of electric motors--for electric and hybrid vehicles and for wind turbines alike. At the same time,

it could drastically reduce our imports of rare Earth minerals that often come from the darkest corners of our world.

At the same time, DuPont was winning $9 million from ARPA-E for its research into seaweed-based biobutanol.

What is biobutanol, my colleagues may ask. The answer is that biobutanol is an advanced fuel designed for use in place of gasoline.

We have heard a lot about ethanol and how it can transform our energy landscape and it will play a very significant role--and already does.

But it is not flawless. It tends to be corrosive, meaning that we cannot use our existing pipeline infrastructure and that we must retrofit our vehicles.

At the same time, it has a lower energy density than gasoline--in other words, fewer miles per gallon.

Biobutanol may very well have fixed those problems. It has nearly the energy density of gasoline and is much less corrosive than ethanol. And now, thanks to research from DuPont and others, we are learning how to make it from seaweed.

Imagine a scalable source of biomass--solar-powered, low-carbon bioenergy--that does not take up existing arable land or demand potable water.

Imagine a fuel built from that source that operates like conventional gasoline.

Wouldn't that be a big step forward for addressing our climate challenges and for ensuring that tomorrow's vehicles will be powered by American ideas?

And DuPont is leading in several other fields. It is an innovator in thin-film solar panels, cellulosic ethanol, and fuel cells.

Across town, W.L. Gore, whom we all know for the miracle fabric Gore- Tex, is a market leader in the membranes essential for fuel cells.

If we hope to move someday to a hydrogen vehicle, and I do, we will need their expertise and excellence.

Perhaps the most significant renewable energy project underway in Delaware, however, is actually happening just outside of Delaware. It is happening in our ocean.

A company called Bluewater Wind is leading the way in developing offshore wind power in the United States.

In countries like Denmark and the United Kingdom, they have already recognized that the abundant ocean breezes provide a vast, constant, renewable source of electricity. It is time for us to catch up.

In fact, the Delaware offshore wind park will be larger than all offshore wind farms currently in existence, although other large farms are being planned and built in other countries.

What it will be is America's first.

In fact, Delaware yesterday hosted the Nation's first Federal offshore renewable energy task force meeting.

When the Department of Energy has concluded that offshore wind can meet 70 percent of all domestic electricity needs, how can we afford to ignore this resource?

And when nations around the world have wind, waves, and electricity demand, shouldn't we try to claim the leadership position in this technology?

That is why I am glad that the Federal Government, by providing the right incentives for wind power, and the State of Delaware, by working with Bluewater to ensure that there will be demand for that power, have convinced Bluewater Wind that Delaware is the place to start.

Mr. President, I could name hundreds of other areas where Delaware and Delawareans are leading the way in creating tomorrow's jobs.

We are installing combined heat and power projects to increase the efficiency of a chemical factory and of a community college. Our port is aiming to revamp its infrastructure to take advantage of green technologies that will make it cleaner and cheaper to operate.

We have set up an innovative new financing mechanism, the Sustainable Energy Utility, that will help get clean technologies through the so- called ``valley of death.'' Even our schools are getting in on the act, installing solar panels on gymnasium rooftops.

We have small start up companies that are leading the way on a whole host of technologies, from less toxic disinfectants to safety reflectors, windmills and biofuels to recycling old carpet.

Companies like ILC Dover, that manufacture components of space suits, are leading the way in developing advanced materials, while CMI Electric, a solar panel seller and installer, has a banner on its Web site that says ``We are hiring apply here.'' We need more of those five words.

I congratulate the leaders of my State, in industry and government, in academia and private life, for recognizing that the future of our economy and, thus, the legacy we leave future generations depends on leading the way on green technologies and in green industries.

Mr. President, I ask unanimous consent that notwithstanding the adjournment of the Senate today, the Record remain open until 1:30 p.m. today for the introduction of legislation and the submission of statements and cosponsorships.

Mr. President, I ask unanimous consent that when the Senate completes its business today, it adjourn until 2 p.m., Monday, November 2; that following the prayer and pledge, the Journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day, and the Senate then proceed to a period for the transaction of morning business until 4 p.m., with Senators permitted to speak therein for up to 10 minutes each; that at 4 p.m., the Senate resume consideration of H.R. 3548, the Unemployment Benefits Extension Act of 2009, as provided for under the previous order. And finally, I ask unanimous consent that the filing deadline for first-degree amendments be 3 p.m. and the filing deadline for second-degree amendments be 4 p.m. Monday.

Mr. President, at 5 p.m. on Monday, the Senate will proceed to a cloture vote on the substitute amendment to H.R. 3548. That will be the first vote of the day.

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

Madam President, I ask unanimous consent to speak as in morning business.

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

Mr. President, I ask unanimous consent to speak as in morning business for up to 5 minutes.

I rise once again to recognize the service of one of America's great Federal employees. Right now the Congress, the President, and the American public are engaged in historic discussions about the future of our health insurance system. This is one of the most important issues facing the country.

The dedicated public servant I will speak about today works for a government-run health insurance program already serving 44 million Americans. Medicare was established in 1965. Its mission is to provide coverage for all Americans over the age of 65. At the time of its creation, Medicare faced criticism from those who were apprehensive of a government-run health insurance program. Today, however, Medicare is praised as a great success. Indeed, its fiercest defenders sit on both sides in this Chamber.

Medicare continues to protect nearly one out of every seven Americans against what would be otherwise prohibitive medical costs. The reason for its success is not only that it provides a much needed service to America's seniors; one of its greatest strengths is that the men and women who administer Medicare benefits are among the most outstanding Federal employees. They work for an agency called the Centers for Medicare and Medicaid Services or CMS. The CMS employee I will talk about today has worked as a Medicare benefits administrator for 11 years. Iris Morales joined the CMS Chicago Regional Office after having first served several years in the Navy. She has been on the front line as a benefits administrator helping to set at ease those who contact the CMS with inquiries about their coverage.

Iris has called her job incredibly rewarding, and she is one of so many Medicare administrators who spend their days solving problems for America's seniors. On one day she might work to make sure a cancer patient has access to lifesaving chemotherapy. On the next Iris might reassure beneficiaries that their copayments are low enough for them to afford critical treatments.

Iris is set to retire next year, and when she does, she will join the ranks of Medicare beneficiaries herself. I know that Iris, as a beneficiary, will receive from those helping her in the years to come the same kind of attention to detail, diligence, and professionalism she has demonstrated through her years at CMS.

Iris Morales and all of the hard-working employees of CMS are proof of the constructive and important role our government already plays in ensuring Americans' access to affordable health care. I hope my colleagues will join me in recognizing this unsung hero and all of the employees at CMS. I honor their contributions, and I thank them for the great job they do every day. I know that America's seniors are grateful for their patience, their caring, and their service to the Nation.

I yield the floor.

Mr. President, it is no longer a secret that fraud represents one of the fastest growing and most costly forms of crime in America today. In no small part, our current economic crisis can be attributed to unchecked mortgage fraud. Mortgage fraud itself was spurred by rampant accounting fraud, which enabled crooked executives to fatten their larders on a bubble of fake equity. And on the back- end, securities fraud, in the form of market manipulation and insider trading, hastened the eventual market crash and maximized its impact on Main Street and average American investors. In response, this body passed the Fraud Enforcement Recovery Act, FERA, which directed critical resources and tools to anti-financial fraud efforts.

FERA was passed in response to an unprecedented financial crisis. Americans should expect Congress to do more than simply react to crises after their most destructive impacts have already been felt. We owe it to our constituents to be proactive and to seek out and solve problems on the horizon so that disaster can be averted.

In the midst of the debate concerning comprehensive health care reform, we must be proactive in combating health care fraud and abuse. Each year, criminals drain between $72 and $220 billion from private and public health care plans through fraud. We pay these costs as taxpayers and through higher health insurance premiums. As we take

steps to increase the number of Americans who are covered by health insurance, and to improve the health care system for everyone, we must also ensure that law enforcement has the tools that it needs to deter, detect, and punish health care fraud.

The Finance and HELP committees have worked long and hard to find ways to fight fraud and bend the cost curve down. They have done a great job. There's more work to be done, however, which is why today I, along with Senators Leahy, Specter, Kohl, Schumer, and Klobuchar, introduce the Health Care Fraud Enforcement Act of 2009.

This bill makes straightforward but critical improvements to the Federal sentencing guidelines, to health care fraud statutes, and to forfeiture, money laundering, and obstruction statutes. The bill would also make available more Federal resources to activities specifically designed to target health care fraud. Taken together, these measures send a strong and unmistakable signal to those who would engage in health care fraud that they will be caught, and they will be punished.

The bill makes important changes to the Federal sentencing guidelines to ensure that health care fraud offenses will be punished commensurate with the cost that these offenders inflict upon our health care system. Health care represents \1/6\ of our national economy, and so unchecked health care fraud has the potential to inflict devastating harm to our national prosperity.

Despite the enormous losses in many health care fraud cases, analysis from the United States Sentencing Commission suggests that health care fraud offenders often receive shorter sentences than other white collar offenders in cases with similar loss amounts. And according to statements from cooperating health care fraud defendants, many criminals are drawn to health care fraud because of this low risk-to- reward ratio. For this reason, the bill directs the Sentencing Commission to increase the offense score of health care fraud offenses by two to four levels, depending on the dollar amount involved in the crime.

The bill also clarifies that courts should refuse to entertain arguments by defendants that they can avoid stiff punishment because only a portion of their fraudulent claims were likely to be paid.

In addition, the bill updates the definition of ``health care fraud offense'' in the Federal criminal code to include violations of the anti-kickback statute, the Food, Drug and Cosmetic Act, and certain provisions of ERISA. These changes will allow the full panoply of law enforcement tools to be used against all health care fraud.

The bill also strengthens whistleblower actions based on medical care kickbacks, which tempt by health care providers to churn unnecessary medical care at great risk to patients and great cost to the taxpayer. By making all payments that stem from an illegal kickback subject to the False Claims Act, this bill leverages the private sector to help detect and recover money paid pursuant to these illegal practices.

The Department of Justice has had success both prosecuting illegal kickbacks and pursuing False Claims Act matters based on underlying violations of the Anti-Kickback Statute. Nevertheless, defendants in such FCA cases continue to mount legal challenges that sometimes defeat legitimate enforcement efforts.

For example, a court recently held that, even though a device company may have paid a kickback to a doctor to use a particular medical device, the bill to the government for the procedure to implant the device was not false or fraudulent because the claim was submitted by the innocent hospital, and not by the guilty doctor. In other words, a claim that results from a kickback and that is fraudulent when submitted by a wrongdoer is laundered into a ``clean'' claim when an innocent third party finally submits the claim to the government for payment. This has the effect of insulating both the payor and the recipient of the kickback from False Claims Act liability. This obstacle to a successful action particularly limits the ability of the Department of Justice to recover from pharmaceutical and device manufacturers, because in such instances the claims arising from the illegal kickbacks typically are not submitted by the doctors who received the kickbacks, but by pharmacies and hospitals that had no knowledge of the underlying unlawful conduct.

This bill remedies the problem by amending the anti-kickback statute to ensure that all claims resulting from illegal kickbacks are ``false or fraudulent,'' even when the claims are not submitted directly by the wrongdoers themselves. I want to emphasize that in such circumstances, neither anti-kickback nor False Claims Act liability will lie against the innocent third party that submitted the claim.

The bill also addresses confusion in the case law over the appropriate meaning of ``willful'' conduct in health care fraud. Both the anti-kickback statute and the health care fraud statute include the term ``willfully.'' In both contexts, the Ninth Circuit Court of Appeals has read the term to require proof that the defendant not only intended to engage in unlawful conduct, but also knew of the particular law in question and intended to violate that particular law.

This heightened mental state requirement may be appropriate for criminal violations of hyper-technical regulations, but it is inappropriate for these crimes, which punish simple fraud. The Finance Committee health care reform bill, America's Healthy Future Act, addresses this problem for the anti-kickback statute, but not for the general health care fraud offense. Accordingly, the Health Care Fraud Enforcement Act tracks the Finance bill and clarifies that ``willful conduct'' in this context does not require proof that the defendant had actual knowledge of the law in question or specific intent to violate that law. As a result, health care fraudsters will not receive special protection that they don't deserve.

Next, the bill provides the Department of Justice with critical subpoena authority for investigations conducted pursuant to the Civil Rights for Institutionalized Persons Act, also known as CRIPA.

Pursuant to that important statute, the Civil Rights Division of the Department of Justice investigates conditions in publicly operated institutions, such as nursing homes, mental health institutions, facilities for persons with disabilities, residential schools for children with disabilities, as well as jails and prisons, where there has been an allegation of pattern or practice of violating residents' Federal civil rights. Under CRIPA, only injunctive relief is available; the statute does not provide for the award of damages.

CRIPA investigations commonly concern allegations of inadequate medical and mental health care, unsafe living conditions, and the failure to protect residents from harm. The majority of CRIPA investigations are conducted with the voluntary cooperation of state and local jurisdictions. When unlawful conditions are identified, CRIPA investigations are typically resolved through a negotiated settlement agreement that addresses the reforms necessary to correct policies, procedures and practices to address the identified deficiencies.

Some jurisdictions, however, have refused to cooperate with the Division. CRIPA does not authorize the Department of Justice to issue subpoenas for documents, records, or even for access into the institution that is the target of the investigation. As a result, investigations have been hamstrung and the effectiveness of CRIPA to remedy systemic abuse of institutionalized persons has been unnecessarily limited.

For example, in a CRIPA investigation of a county nursing home in New Jersey, the local jurisdiction would not cooperate. The Division's investigation revealed inadequate medical and mental health care, unlawful restraint, and inadequate nutrition and hydration. In one particularly serious incident, which occurred weeks after a meeting with the county officials to request their cooperation with the investigation, a resident was fed so quickly by staff that she aspirated and died. Emergency room physicians extracted a volume of mashed potatoes from the resident's lungs that filled a Ziploc bag. Another nursing home resident slowly starved to death because staff improperly positioned that resident's feeding tube. The Division was compelled to file suit, resulting in a negotiated settlement more than 4 years after the investigation began. To be sure, these

abuses are a civil rights issue that demand attention even in the absence of fraud prevention. But substandard care also represents fraud and waste, because taxpayers have paid for the provision of satisfactory medical services at facilities that fall under CRIPA jurisdiction.

The absence of subpoena authority enables non-cooperating jurisdictions to obstruct and delay the Division in its mission to ensure that the Federal rights of persons in the custody of state and local officials are respected. The resultant litigation when jurisdictions exploit the absence of subpoena power is extraordinarily costly, yet the substantive outcome, appropriate injunctive relief, is the same.

The bill addresses the problem by authorizing the Department of Justice to issue subpoenas for access to any institution that is the subject of an investigation related to a violation of CRIPA, and for any documents, records, materials, files, reports, memoranda, policies, procedures, investigations, video or audio recordings, and quality assurance reports of such institution.

In a final substantive change, the bill corrects an apparent drafting error by providing that obstruction of criminal investigations involving administrative subpoenas under HIPAA, the Health Insurance Portability and Accountability Act of 1996, should be treated in the same manner as obstruction of criminal investigations involving grand jury subpoenas.

Finally, the Health Care Fraud Enforcement Act provides the resources needed for law enforcement to uncover and go after these frauds. Health care fraud cannot be fought effectively without more investigators and prosecutors. This bill authorizes the appropriation of $20,000,000 each year from 2011 through 2016 for investigations, prosecutions, and civil or other proceedings relating to fraud and abuse in connection with any health care benefit program. The bill authorizes the United States Attorneys' Offices to be appropriated an additional $10,000,000 each year for this purpose, the Criminal Division of the Department of Justice, $5,000,000 each year, and the Civil Division of the Department of Justice, $5,000,000 each year.

As we move toward meaningful health care reform, we must ensure that criminals who engage in health care fraud, and those who contemplate doing so, understand that they face swift prosecution and substantial punishment. Congress should move quickly to pass this legislation so that American taxpayers can be confident that their government has the tools and resources necessary to protect its investment in the health and welfare of our Nation.

I urge my colleagues to support the Health Care Fraud Enforcement Act of 2009.

Mr. President, it is no longer a secret that fraud represents one of the fastest growing and most costly forms of crime in America today. In no small part, our current economic crisis can be attributed to unchecked mortgage fraud. Mortgage fraud itself was spurred by rampant accounting fraud, which enabled crooked executives to fatten their larders on a bubble of fake equity. And on the back- end, securities fraud, in the form of market manipulation and insider trading, hastened the eventual market crash and maximized its impact on Main Street and average American investors. In response, this body passed the Fraud Enforcement Recovery Act, FERA, which directed critical resources and tools to anti-financial fraud efforts.

FERA was passed in response to an unprecedented financial crisis. Americans should expect Congress to do more than simply react to crises after their most destructive impacts have already been felt. We owe it to our constituents to be proactive and to seek out and solve problems on the horizon so that disaster can be averted.

In the midst of the debate concerning comprehensive health care reform, we must be proactive in combating health care fraud and abuse. Each year, criminals drain between $72 and $220 billion from private and public health care plans through fraud. We pay these costs as taxpayers and through higher health insurance premiums. As we take

steps to increase the number of Americans who are covered by health insurance, and to improve the health care system for everyone, we must also ensure that law enforcement has the tools that it needs to deter, detect, and punish health care fraud.

The Finance and HELP committees have worked long and hard to find ways to fight fraud and bend the cost curve down. They have done a great job. There's more work to be done, however, which is why today I, along with Senators Leahy, Specter, Kohl, Schumer, and Klobuchar, introduce the Health Care Fraud Enforcement Act of 2009.

This bill makes straightforward but critical improvements to the Federal sentencing guidelines, to health care fraud statutes, and to forfeiture, money laundering, and obstruction statutes. The bill would also make available more Federal resources to activities specifically designed to target health care fraud. Taken together, these measures send a strong and unmistakable signal to those who would engage in health care fraud that they will be caught, and they will be punished.

The bill makes important changes to the Federal sentencing guidelines to ensure that health care fraud offenses will be punished commensurate with the cost that these offenders inflict upon our health care system. Health care represents \1/6\ of our national economy, and so unchecked health care fraud has the potential to inflict devastating harm to our national prosperity.

Despite the enormous losses in many health care fraud cases, analysis from the United States Sentencing Commission suggests that health care fraud offenders often receive shorter sentences than other white collar offenders in cases with similar loss amounts. And according to statements from cooperating health care fraud defendants, many criminals are drawn to health care fraud because of this low risk-to- reward ratio. For this reason, the bill directs the Sentencing Commission to increase the offense score of health care fraud offenses by two to four levels, depending on the dollar amount involved in the crime.

The bill also clarifies that courts should refuse to entertain arguments by defendants that they can avoid stiff punishment because only a portion of their fraudulent claims were likely to be paid.

In addition, the bill updates the definition of ``health care fraud offense'' in the Federal criminal code to include violations of the anti-kickback statute, the Food, Drug and Cosmetic Act, and certain provisions of ERISA. These changes will allow the full panoply of law enforcement tools to be used against all health care fraud.

The bill also strengthens whistleblower actions based on medical care kickbacks, which tempt by health care providers to churn unnecessary medical care at great risk to patients and great cost to the taxpayer. By making all payments that stem from an illegal kickback subject to the False Claims Act, this bill leverages the private sector to help detect and recover money paid pursuant to these illegal practices.

The Department of Justice has had success both prosecuting illegal kickbacks and pursuing False Claims Act matters based on underlying violations of the Anti-Kickback Statute. Nevertheless, defendants in such FCA cases continue to mount legal challenges that sometimes defeat legitimate enforcement efforts.

For example, a court recently held that, even though a device company may have paid a kickback to a doctor to use a particular medical device, the bill to the government for the procedure to implant the device was not false or fraudulent because the claim was submitted by the innocent hospital, and not by the guilty doctor. In other words, a claim that results from a kickback and that is fraudulent when submitted by a wrongdoer is laundered into a ``clean'' claim when an innocent third party finally submits the claim to the government for payment. This has the effect of insulating both the payor and the recipient of the kickback from False Claims Act liability. This obstacle to a successful action particularly limits the ability of the Department of Justice to recover from pharmaceutical and device manufacturers, because in such instances the claims arising from the illegal kickbacks typically are not submitted by the doctors who received the kickbacks, but by pharmacies and hospitals that had no knowledge of the underlying unlawful conduct.

This bill remedies the problem by amending the anti-kickback statute to ensure that all claims resulting from illegal kickbacks are ``false or fraudulent,'' even when the claims are not submitted directly by the wrongdoers themselves. I want to emphasize that in such circumstances, neither anti-kickback nor False Claims Act liability will lie against the innocent third party that submitted the claim.

The bill also addresses confusion in the case law over the appropriate meaning of ``willful'' conduct in health care fraud. Both the anti-kickback statute and the health care fraud statute include the term ``willfully.'' In both contexts, the Ninth Circuit Court of Appeals has read the term to require proof that the defendant not only intended to engage in unlawful conduct, but also knew of the particular law in question and intended to violate that particular law.

This heightened mental state requirement may be appropriate for criminal violations of hyper-technical regulations, but it is inappropriate for these crimes, which punish simple fraud. The Finance Committee health care reform bill, America's Healthy Future Act, addresses this problem for the anti-kickback statute, but not for the general health care fraud offense. Accordingly, the Health Care Fraud Enforcement Act tracks the Finance bill and clarifies that ``willful conduct'' in this context does not require proof that the defendant had actual knowledge of the law in question or specific intent to violate that law. As a result, health care fraudsters will not receive special protection that they don't deserve.

Next, the bill provides the Department of Justice with critical subpoena authority for investigations conducted pursuant to the Civil Rights for Institutionalized Persons Act, also known as CRIPA.

Pursuant to that important statute, the Civil Rights Division of the Department of Justice investigates conditions in publicly operated institutions, such as nursing homes, mental health institutions, facilities for persons with disabilities, residential schools for children with disabilities, as well as jails and prisons, where there has been an allegation of pattern or practice of violating residents' Federal civil rights. Under CRIPA, only injunctive relief is available; the statute does not provide for the award of damages.

CRIPA investigations commonly concern allegations of inadequate medical and mental health care, unsafe living conditions, and the failure to protect residents from harm. The majority of CRIPA investigations are conducted with the voluntary cooperation of state and local jurisdictions. When unlawful conditions are identified, CRIPA investigations are typically resolved through a negotiated settlement agreement that addresses the reforms necessary to correct policies, procedures and practices to address the identified deficiencies.

Some jurisdictions, however, have refused to cooperate with the Division. CRIPA does not authorize the Department of Justice to issue subpoenas for documents, records, or even for access into the institution that is the target of the investigation. As a result, investigations have been hamstrung and the effectiveness of CRIPA to remedy systemic abuse of institutionalized persons has been unnecessarily limited.

For example, in a CRIPA investigation of a county nursing home in New Jersey, the local jurisdiction would not cooperate. The Division's investigation revealed inadequate medical and mental health care, unlawful restraint, and inadequate nutrition and hydration. In one particularly serious incident, which occurred weeks after a meeting with the county officials to request their cooperation with the investigation, a resident was fed so quickly by staff that she aspirated and died. Emergency room physicians extracted a volume of mashed potatoes from the resident's lungs that filled a Ziploc bag. Another nursing home resident slowly starved to death because staff improperly positioned that resident's feeding tube. The Division was compelled to file suit, resulting in a negotiated settlement more than 4 years after the investigation began. To be sure, these

abuses are a civil rights issue that demand attention even in the absence of fraud prevention. But substandard care also represents fraud and waste, because taxpayers have paid for the provision of satisfactory medical services at facilities that fall under CRIPA jurisdiction.

The absence of subpoena authority enables non-cooperating jurisdictions to obstruct and delay the Division in its mission to ensure that the Federal rights of persons in the custody of state and local officials are respected. The resultant litigation when jurisdictions exploit the absence of subpoena power is extraordinarily costly, yet the substantive outcome, appropriate injunctive relief, is the same.

The bill addresses the problem by authorizing the Department of Justice to issue subpoenas for access to any institution that is the subject of an investigation related to a violation of CRIPA, and for any documents, records, materials, files, reports, memoranda, policies, procedures, investigations, video or audio recordings, and quality assurance reports of such institution.

In a final substantive change, the bill corrects an apparent drafting error by providing that obstruction of criminal investigations involving administrative subpoenas under HIPAA, the Health Insurance Portability and Accountability Act of 1996, should be treated in the same manner as obstruction of criminal investigations involving grand jury subpoenas.

Finally, the Health Care Fraud Enforcement Act provides the resources needed for law enforcement to uncover and go after these frauds. Health care fraud cannot be fought effectively without more investigators and prosecutors. This bill authorizes the appropriation of $20,000,000 each year from 2011 through 2016 for investigations, prosecutions, and civil or other proceedings relating to fraud and abuse in connection with any health care benefit program. The bill authorizes the United States Attorneys' Offices to be appropriated an additional $10,000,000 each year for this purpose, the Criminal Division of the Department of Justice, $5,000,000 each year, and the Civil Division of the Department of Justice, $5,000,000 each year.

As we move toward meaningful health care reform, we must ensure that criminals who engage in health care fraud, and those who contemplate doing so, understand that they face swift prosecution and substantial punishment. Congress should move quickly to pass this legislation so that American taxpayers can be confident that their government has the tools and resources necessary to protect its investment in the health and welfare of our Nation.

I urge my colleagues to support the Health Care Fraud Enforcement Act of 2009.