Floor Statements

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. Res. 304, submitted earlier today.

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

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. Res. 305, which was introduced earlier today.

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

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. Res. 306, submitted earlier today.

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

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. Con. Res. 45, which was submitted earlier today.

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

Mr. President, I ask unanimous consent that when the Senate completes its business today, it stand adjourned until 9:30 a.m. tomorrow, Wednesday, October 7; that following the prayer and the 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 proceed to a period of morning business for up to 1 hour with Senators permitted to speak therein for up to 10 minutes each, with the time equally divided and controlled between the two leaders or their designees, with the majority controlling the first half and the Republicans controlling the final half; that following morning business, the Senate resume consideration of H.R. 2847, Commerce-Justice-Science appropriations.

Mr. President, rollcall votes are expected to occur throughout the day in relation to amendments to the CJS appropriations bill and on any available conference reports, if we are able to reach an agreement on any conference reports.

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

Mr. President, I would like to thank Senator Levin for submitting this important resolution to commemorate the significance of the War of 1812. ``America's Second War of Independence''--as it is sometimes called--was a critical turning point in forming the Nation we know today. Battles took place throughout the country to define our borders and secure our independence. One of those engagements took place in Lewes, DE.

Lewes sits at the mouth of the Delaware River--a critical gateway to Philadelphia, Wilmington, and Trenton. In March of 1813, under the command of Commodore John Beresford, the British Royal Navy established a blockade of the Delaware Bay and River. Beresford demanded that Lewes provide his squadron with meat, vegetables, and other supplies. He warned that, ``If you refuse to comply with this request, I shall be under the necessity of destroying your town.''

The residents of Lewes stood their ground. America was at war, and Lewes officials refused to help the British--even though the blockade was significantly impairing trade in the region and driving up the cost of goods.

Lewes prepared for attack. The Delawareans knew they did not have the ammunition to match the British ships, but they readied for battle as best as they could. Led by the intrepid Colonel Samuel Davis, local militias were called in to build a basic fort and small watchtower to protect the town. They blew out the lamps in the Cape Henlopen lighthouse and moved the buoys that marked the shoals in the bay, hoping to disorient enemy vessels during an assault.

On April 6, the British launched their attack. They fired hundreds of cannon balls at Lewes, yet they were unable to do heavy damage to the town. This was partially because the creative tactics of the Delawarean militia disoriented the British, and none of their larger ships were able to get close to shore. The people of Lewes also retrieved many of the cannons that landed in soft soil and fired them back at the British.

The engagement at Lewes also holds historical significance for the first-ever use of the Congreve rocket. The red glare of these rockets, when used during a similar attack on Fort McHenry in Baltimore, would inspire Francis Scott Key to write the ``Star Spangled Banner.''

After 22 hours of bombarding Lewes, Beresford's ships retreated on April 7. Although short of supplies and trained soldiers, the people of Lewes were able to repel and cause damage to the British vessels. There was no loss of life in Lewes and a local poet summarized the attack with the simple phrase: ``The commodore and his men, wounded a pig and killed a hen.''

The defenders of Lewes were brave and resourceful, and while this small battle in Lewes may not have changed the course of the war, it demonstrated to the British--and to the world--that Americans were united and strong in defense of their country.

The War of 1812 was a significant turning point in our natural development. It solidified our independence and marked the emergence of our Nation as a great power. I am pleased to cosponsor Senator Levin's resolution to issue a stamp commemorating the War of 1812.

Mr. President, I cannot think of two better people to be involved in a discussion about what we should be doing in Afghanistan than Senator McCain and Senator Levin.

Where I come down on this issue is with Senator Levin because I believe it is very important we give the President time to discuss this issue in detail. There are a lot of different pieces to this puzzle. It is not just General McChrystal's report. It is a report by Ambassador Eikenberry. It is a report by Ambassador Holbrooke. I think he would have a report from Ambassador Patterson from Pakistan. I think we need a report from the DOD in terms of force structure and what additional troops we would have beyond that.

There are a number of issues that have to be dealt with here. I think as in the past with President Bush, where there was a 3-month process before the surge--during that time, people were able to talk to the President, and to work their way up the chain of command in the military, and the civilians to work their way up in the Department of Defense, to talk to the President so the President could have their counsel before the President made his decision.

I think that is what we need here. I think one of the most important things President Obama said in his speech the other night to the joint session was: I am going to be here for a long time, so I want to get it right.

We have to get it right in Afghanistan. I think this is the obvious time to proceed. Clearly, the present election and the flaws in the election, in addition to General McChrystal's report which points out the rise of the Taliban, demonstrates it is time for us to sit down and take a hard look at what our strategy in Afghanistan is. I think the President is going to do that. He is going to go through a process. Many people have to be involved. Many

different issues have to be done. And then the President will come with his plan for Afghanistan.

At that time, after that happens, I think then--Chairman Levin is correct--we should have hearings, we should have people come and testify, and that will be the time to do it. In the meantime, I think we owe it to the military chain of command that everyone involved in that chain of command be allowed to come and talk to the President so he can make the best decision he can possibly make before the Senate gets an opportunity to deal with everyone who is going to be involved with the President.

So, again, I support Senator Levin's amendment. I think it is essential we have a process that allows it to go forward.

Thank you, Mr. President.

Mr. President, I ask unanimous consent that the pending amendment be set aside, and I call up amendment No. 2578.

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

Mr. President, I am grateful to the Senator from the State of Hawaii and the Senator from the State of Mississippi for their work on this very important bill. I also thank Senator Jack Reed from Rhode Island, Senator Lugar, and Senator Bayh for their support of this amendment, which instructs the Secretary of Defense, in consultation with the Department of State and USAID, to continue to support the integrated civilian-military training for all civilians deploying to Afghanistan, occurring once a month in Indiana at Camp Atterbury.

The civilian role in Afghanistan is absolutely critical to achieving the broader goals of counterinsurgency. As we discuss the way forward in Afghanistan, it is essential to remember that troop levels are only one part of that strategy.

In order to cultivate support among the population and implement an effective counterinsurgency, civilians from across government agencies must continue to partner and work in tandem with the military.

In May, I offered an amendment to the supplemental which aimed to ensure that civilians deploying to Afghanistan receive training that cultivates greater civilian-military unity of mission and which emphasized the importance of counterinsurgency and stability operations.

Prior to passage of this amendment, joint civil-military training was only occurring once every 9 months to coincide with scheduled military deployments. Since then, officials throughout the government--and especially the State Department--realized this was insufficient to meet the increased needs presented by the civilian surge in Afghanistan.

As such, the joint training schedule was increased to once a month, and Ambassadors Eikenberry and Holbrooke recently mandated that all civilians working in the field in Afghanistan must receive this training prior to deployment.

On Monday, I visited Camp Atterbury to observe and express my support for the training, to thank these brave men and women for their service, and to emphasize the key role of our civilians in Afghanistan.

Civilians from across the interagency process--including the Department of State, U.S. Agency for International Development, and the Department of Agriculture--have come together in Camp Atterbury for a 1-week intensive course with the military, where they simulate real life experiences in Afghanistan.

This includes participating in vignettes with role players and the military to brainstorm ways to help their Afghan partners deliver essential services, security, and economic opportunity.

This essential skill set and level of familiarity with the military would take weeks to achieve once in theater. But the integrated training at Camp Atterbury allows our civilians heading to Afghanistan to hit the ground running.

Given the increased demand for this training, I am offering an amendment to ensure that training at Camp Atterbury continues to receive the support it needs in terms of military and civilian personnel, trainers, and other resources.

With a new mandate from Ambassadors Holbrooke and Eikenberry, the class size for this training has obviously increased. As we continue with the civilian surge, I hope the training at Camp Atterbury will receive a commensurate level of increased funding and support which it needs.

We owe it to our brave men and women in Afghanistan to get this right. It is critical to remember that our strategy in Afghanistan is not just about the troops; it is also about the civilians.

Just as we seek to ensure our troops headed to the field have the proper preparation and equipment, it is critical our civilians have the same level of training to ensure their effectiveness and security.

As the number of civilians in Afghanistan continues to grow--up to nearly 1,000 by the end of the year--our support for this mandatory training must also increase.

Integrated civilian-military training is a great example of steps being taken to improve our counterinsurgency strategy. In order to succeed in Afghanistan, civilians must successfully partner with the Afghans to help provide essential services, to promote economic development, and to improve systems of governance.

I am especially grateful to the Indiana National Guard. General Umbarger, adjutant general of the Indiana National Guard, and General Touley are so involved in this and doing such a wonderful job. They are to be commended. I also am grateful to the staff at Camp Atterbury and the broader training support team from the Departments of State, Defense, and USAID.

Most important, I am extremely grateful to the thousands of our brave men and women--civilian and military--who are serving in Afghanistan.

I believe this amendment is noncontroversial, and with support of the bill managers, I will be more than happy to adopt it by voice vote at the appropriate time.

I yield the floor.

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

Mr. President, I ask unanimous consent that amendment No. 2578 be modified with the changes at the desk.

Mr. President, I ask for a voice vote.

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

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

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

Mr. President, I rise once again to recognize the service of one of America's great Federal employees.

In recent months, President Obama has spoken of his vision of a world free from the threat of nuclear weapons. While nuclear disarmament remains a long-term project, there are important steps already being taken right now toward that goal.

The public servant I will speak about today has already distinguished herself as a top-notch negotiator on nuclear proliferation issues for the Department of Energy.

When Nicole Nelson-Jean was just 28 years old, she led a delegation of Energy Department negotiators in an effort to secure Russian nuclear materials in Siberia. Based out of our Embassy in Tokyo, Nicole had to overcome the skepticism of her Russian counterparts, who were not accustomed to negotiating with someone her age. Remember, she was 28. But she quickly won their respect and developed a working relationship that enabled them to move forward on technical assistance and create a joint training and service center in the Russian Arctic for securing nuclear material.

After this achievement, Nicole was made director of the Department of Energy's Asia Office. She distinguished herself in that position for 2 years, also serving concurrently as energy attache to our ambassador in Japan.

In 2006, Nicole was tapped to head the Global Threat Reduction Initiative for North and South America which runs projects in over 90 countries to remove radiological material from nuclear reactors and reconfigures them from processing weapons-grade highly enriched uranium to those processing the type used for peaceful purposes.

Following her success in that role, Nicole was appointed to serve as Director of the United States Mission to the International Organizations in Vienna, Austria. While there, she helped secure passage of the IAEA's Nuclear Security Resolution, which is now the central international statute used to prevent nuclear terrorism.

When asked about her work as a public servant, Nicole said: ``Personally, I don't think that there's anything more important than the national security of our country,'' and that ``service is in my blood.''

Earlier this summer, Nicole returned to the United States to begin a 10-month program at the National Defense University as a counter- terrorism fellow.

She is just one of countless Federal employees who, even though they are highly educated and experienced, continue to immerse themselves academically in their career fields.

As I have stated before from this desk, our Federal employees combine great intellect and a passion for service. The result is a Federal workforce that excels.

Without Nicole and those like her, our government could not carry out the policies, such as nuclear arms control, that keep the American people safe and free.

I call on my fellow Senators to join me in thanking Nicole Nelson- Jean and all the outstanding men and women of the Department of Energy for their contribution to our Nation.

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

Mr. President, today I recognize the extraordinary contributions of a patriarch of the Italian-American community in my home State of Delaware, Father Roberto Balducelli. On Columbus Day, Father Balducelli will be honored by the Columbus Communion Breakfast Committee with its Outstanding Achievement Award.

Father Balducelli's 96 years on this Earth, while a true gift to all he has served, reads like a novel. As a 9-year-old boy in the small town of Castelluccio, Italy, he decided that he wanted to pursue an ecclesiastical education in Rome. In 1929, at the age of 16, he joined the Oblates of St. Francis de Sales. After studying in France and Switzerland, he returned to Italy from September 1939 to March 1946.

During World War II, Father Balducelli helped save Italian Jews from persecution. The young priest recovered the bodies of civilians killed in bombing raids, was injured in one of these attacks, and sheltered refugees from Nazi persecution.

After receiving a passport to come to the United States, Father Balducelli crossed the Atlantic Ocean over the course of 29 days and arrived in New York on April 10, 1946. The young oblate arrived at St. Anthony's of Padua Church in Wilmington soon after and became the church's first Italian priest. In 1959, he became pastor of St. Anthony's.

As a first-rate mason and a licensed contractor in the State of Delaware, Father Balducelli oversaw and helped undertake the renovation of an old public school to meet young Catholic students' educational needs, and he helped establish a new school, called Padua Academy, for girls, as well.

His love of welding helped to build St. Anthony in the Hills in the 1960s, a popular summer retreat and sanctuary for children and their families near Hockessin, DE. On his watch, the parish opened a senior and day care center and expanded the regionally prominent Italian Festival in Delaware. He retired as the church's pastor in 1988.

I am privileged to have known Father Balducelli for many years. I look forward to breaking bread with him at the Columbus Communion Breakfast in Wilmington's Little Italy on the day of his special recognition.

I hope my colleagues will join me in celebrating Father Balducelli's significant accomplishments, which he achieved over the course of a lifetime dedicated to our community. Wilmington and our Italian- American community could not have woven such a fabric of family and strength if it were not for the commitment and foresight of Father Roberto Balducelli.

Mr. President, I ask unanimous consent to speak in morning business for up to 10 minutes.

Mr. President, I rise once again to honor America's great Federal employees.

When I began my great Federal employees initiative in May, I did so by sharing the stories of some outstanding public servants who in past years had won Service to America Medals.

Last night, at its eighth annual awards gala, the Partnership for Public Service announced its 2009 Service to America Medal winners. These nine exemplary Federal employees represent a number of agencies and hail from diverse backgrounds. Together, they form a snapshot of the finest civil service in history.

When I spoke in May about what makes our Federal workforce so excellent, I said there are several qualities our civil servants embody. First and foremost, they demonstrate great citizenship by choosing careers in the public sector. Second, they are industrious and hardworking in the face of often difficult and challenging tasks.

Our Federal employees take risks both to their safety and to their careers. They persevere even when faced with setbacks or with the knowledge that the effects of their work may not be felt for years to come. Our public servants exhibit great intellect and bring to their jobs many advanced skills and specialized knowledge. I am glad--very glad--there are awards such as the Service to America Medals to recognize the unsung heroes who keep America moving ever forward. This is what I have tried to do each week by speaking about our great public servants.

This year's Service to America medalists can well be described by the five attributes I just listed.

Dr. Janet Kemp, who won this year's Federal Employee of the Year Medal, exemplified the value of outstanding citizenship when she organized a national suicide prevention hotline for veterans. As national director for the VA's Suicide Prevention Program, Janet oversaw the creation of the hotline to help combat veteran suicide, which has increased significantly in recent years. Since 2005, when she was asked to spearhead this program, Janet's initiative has rescued over 3,000 veterans and has assisted them in finding help.

An important aspect of citizenship is a commitment to protecting one's community from harm. Ben Fisherow was awarded the 2009 Justice and Law Enforcement Medal for his work to prevent air pollution. As an experienced litigator with the Department of Justice's Environment and Natural Resources Division, Ben has spent over 20 years enforcing key provisions of the Clean Air Act and taking legal action against utilities that violate anti-pollution mandates. In one case alone, Ben secured a settlement that prevented the release of over 800,000 tons of air pollutants annually.

Our federal employees are hard working, and this year's Citizens Services Medal winner proves it. Michael German, of the Department of Housing and Urban Development, has been working tirelessly to combat homelessness in America. The Interagency Council on Homelessness, which he leads, coordinates with over 850 State and local officials nationwide on efforts to help the homeless obtain medical care and permanent housing. Their work has led to a 30-percent reduction in the chronically homeless between 2005 and 2007.

Another example of our civil servants' industriousness can be found in Allan Comp. Allan won the 2009 Environment Medal for his work at the Department of the Interior's Office of Surface Mining. He created the Appalachian Coal Country Watershed Team, a partnership between his office and VISTA volunteers who help local citizens and community groups organize clean-up projects and monitor water quality. His program was so successful that it was recently expanded to the American West. Today, joint Office of Surface-Mining and VISTA teams are at work protecting and empowering local communities in Colorado, New Mexico, and Montana.

Clare Rowley is an economic analyst for the FDIC. She won the Call to Service Medal for helping to implement the FDIC's mortgage modification program, which helped thousands of families stay in their homes after the collapse of subprime mortgages. In February, Clare, who is only 25 years old, found herself sitting in a high-level meeting with regulators, bankers, and Obama administration officials on the foreclosure crisis. Despite feeling somewhat intimidated because of her age and junior position, Clare spoke up and offered important ideas that eventually made their way into the Treasury Department's mortgage crisis recovery plan. Now, Clare is one of those instrumental in carrying out the plan.

A risk-taker, who won this year's National Security and International Affairs Medal, serves as the director of the USAID's Office of Economic Growth in Pakistan. In July, I spoke about a USAID employee who was gunned down by extremists while posted in the Sudan. For Amy Meyer, who performs similar work in Pakistan, the danger is very real. Nonetheless, she arrived in the country in 2006 and began working with local women to create dairy cooperatives. Starting with just a staff of two and little funding, Amy now oversees a $200 million budget and several successful economic empowerment programs. She even teaches yoga on Pakistani television and has spent much of her personal time dispensing advice to local women in their homes.

The winner of the 2009 Career Achievement Medal knows the meaning of perseverance. Dr. Thomas Waldmann has been a medical researcher at the National Institutes of Health for over 50 years. Currently, Tom is chief of the NIH National Cancer Institute's Metabolism Branch, and the focus of his career has been researching disorders in which the body attacks its own cells. His work has led to treatments to once-fatal varieties of lymphoma, leukemia, and multiple sclerosis. Tom also co- discovered a type of molecule that may lead to advances in the fight against AIDS and cancer. But his successes did not happen overnight. His achievements were the work of a lifetime, and the full impact of Tom's discoveries will not be known for years.

Similarly, Dr. Patricia Guerry has demonstrated great resolve while researching an elusive vaccine. Now serving as chief of the Naval Medical Research Center's Molecular Biology and Biochemistry Branch, she has spent nearly 30 years studying a microbe that causes food poisoning. Researchers discovered that the most common microbe involved in food-borne illnesses is Campylobacter. In the mid-1980s, after several years of unsuccessfully attempting to find a vaccine, many microbiologists turned their attention elsewhere. Patricia, however, never gave up. Today, she and her team of researchers are nearing their goal, and their vaccine is now in the testing phase. She persevered, and our troops stationed abroad as well as tens of millions in the developing world will likely soon benefit from a vaccine.

This year's Homeland Security Medal was shared by a pair of CIA employees who showed great intellect in solving a critical problem. In 2005, the Office of the Director of National Intelligence gave Sean Dennehy and Don Burke the task of improving information-sharing across the intelligence community. Lack of communication between the intelligence agencies had been a serious impediment to preventing the September 11 attacks. To fix this, Sean and Don created an online system called ``Intellipedia,'' modeled after the popular Wikipedia Web site. Intellipedia enables analysts from different agencies to contribute information to subject pages and open cases. Today, Intellipedia has grown to nearly a million pages, and it has helped prevent threats to the Beijing Olympics, analyze IED patterns in Iraq, and study the 2008 Mumbai terror attacks.

All of these outstanding public servants display great humility. Even with such accomplishments, modesty is their common response.

I want to congratulate the Partnership for Public Service on their work to award the Service to America Medals. The winners were selected by a blue ribbon panel of leaders from both

the public and private sectors, of which our colleague from Mississippi, Senator Thad Cochran, is a member.

I hope the rest of my colleagues will join me in congratulating all of this year's Service to America winners on receiving their medals. We thank them, and all Federal employees, for their service to our Nation.

Mr. President, I yield the floor.

I thank the Senator.

I join my freshmen colleagues this morning to discuss the Nation's health care system and urge Congress to pass reform legislation this year. I think there are two major reasons we need to enact health reform this year, and they both require controlling health care costs.

First, we need to pass health care reform because failure to do so could literally bankrupt the country. Just look at Medicare and Medicaid. One of the biggest driving forces behind our Federal deficit is the skyrocketing cost of Medicare as well as Medicaid. In 1966 Medicare and Medicaid accounted for only 1 percent; that is, 1 percent of all government expenditures. Today they account for 20 percent. If we do nothing to start bending the cost curve down for Medicare and Medicaid, we will eventually spend more on these two programs than all other Federal programs combined.

Medicare spending is growing rapidly for the same reasons that private health care spending is growing rapidly: increases in the cost and utilization of medical care. Between 1970 and 2007, Medicare's spending for each enrollee rose by an average of 8.5 percent annually, while private health insurance increased by 9.7 percent per person per year.

The Congressional Budget office estimates that Federal spending on Medicare and Medicaid was approximately 4 percent of the Nation's gross domestic product in 2008. If we fail to act--and we cannot fail to act--Federal spending on Medicare and Medicaid will rise to 7 percent of GDP by 2025. We must bend these cost curves down and slow the level of growth in Medicare and Medicaid programs if we are ever to get our budget situation under control.

The second major reason we have to act is because failure to do so will drive more and more Americans into personal bankruptcy. Today bankruptcy involving medical bills accounts for more than 60 percent of U.S. personal bankruptcies, a rate 1.5 times that of just 6 years ago.

Keep in mind, more than 75 percent of families entering bankruptcy because of health care costs actually have health insurance. I think we have a popular idea that the people going bankrupt are people who cannot manage their money, who do not have health insurance. These are people who have health insurance. Again, two-thirds of all Americans filing for bankruptcy because of medical bills already have insurance. These are middle-class Americans who are well educated and own their own homes. They just cannot keep up with the alarming rise in costs associated with medical care.

We have to act so that Americans no longer have to worry about how they are going to afford their medical bills. We need to pass health care reform and give Americans more stability in these rough economic times so they no longer have to choose between paying their medical bills or paying their home mortgages or their children's tuition payments. Controlling health care costs is a major reason we need to pass health care reform today.

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

Mr. President, I ask unanimous consent to speak in morning business for up to 18 minutes.

Mr. President, Wall Street has undergone a radical transformation in recent years. We saw the rise of high-frequency trading where buy and sell orders move in milliseconds. We saw the emergence of so-called dark pools which permit confidential trading in growing volumes to take place away from the public eye. We now see some trading firms' computer servers enjoying the advantage of onsite location, a practice known as colocation. We have seen the creation of flash orders which allow certain traders to see orders before anyone else. There have been new developments in payments for order flow, a practice that permits market centers to pay a broker to route a trade its way. These and myriad other practices, almost too complicated to describe, have fundamentally changed how our markets operate. We now have a high-tech, profit-driven arms race, which continues to escalate every day, that has transformed the ways and the places and the speeds in which stocks and other securities are traded.

There are at least two questions that must be posed--questions we must look to the markets' regulators to answer. First, have these opaque, complex, increasingly sophisticated trading mechanisms been beneficial for retail investors, helping them to buy at the lowest possible price and sell at the highest price with the lowest possible transaction costs or have they left them as second-class investors, pushed aside by powerful trading companies able to take advantage of small but statistically and financially significant advantages? And second, do these high-tech practices and their ballooning daily volumes pose a systemic risk? To take just one example, is anyone examining the leverage these traders use in committing their capital in such huge daily volumes? What do we really know about the cumulative effect of all these changes on the stability of our capital markets?

The proponents of these technological developments tell us this transformation has benefited all investors. But how can we know--truly, how can we know that--when so much of the market is opaque to the public and to the regulators? How can we be confident when the measurement and enforcement techniques used by regulators for ensuring best execution seem stuck in the past and when so many trade in milliseconds across fragmented markets to take advantage of so-called market latencies? And why should we assume it all operates in the public interest when these changes have not been fully analyzed, individually or collectively, to determine and protect the interests of long-term investors?

That is why, on August 21, I wrote to SEC Chairman Mary Schapiro calling for ``a comprehensive, independent, `zero-based regulatory review' of a broad range of market structure issues, analyzing the current market structure from the ground up before piecemeal changes built on the current structure increase the potential for execution unfairness.'' I told her then that ``we need a thorough review . . .

so that our laws and regulations can keep pace with market developments.'' In a written response to me on September 10, Chairman Schapiro announced that not only was the SEC reviewing dark pools and flash orders, studies it had begun earlier this year, but that it would broaden its review to include regulation ATS threshold levels, direct market access, high-frequency trading, and colocation, which I explained earlier.

Adding action to these words, last week the SEC unanimously approved a proposal to ban the use of flash orders in our financial markets. Flash orders undermine the credibility of our markets by giving a select group of market participants a sneak peek at stock quotes. As Chairman Schapiro noted, ``Flash orders provide a momentary head start in the trading arena that can produce inequities in the market.'' I applaud the SEC for this action. The proposal must be put out for public comment which the SEC will review before making a final decision.

I am hopeful that last week's action was a true beginning. Banning flash orders is only a small, though significant--very significant-- step in the review of recent market developments.

Accordingly, I was also very pleased last week to hear Chairman Schapiro, the Commissioners, and the SEC staff voice their support not just for a flash order ban but also for the need for a comprehensive, ground-up review at the Commission of current market structure issues.

Chairman Schapiro asserted last Thursday that ``other market practices may have . . . opaque features'' and that she expects the Commission to ``consider initiatives in the near future'' that address ``forms of dark trading that lack market transparency.''

James Brigagliano, Co-Acting Director, Division of Trading and Markets, added:

I want to emphasize that today's recommended proposal is a

first step in an ongoing review of market structure issues.

The securities markets have experienced extraordinary changes

over the last few years in trading technology and practices.

Some of these changes have led to serious concerns about

whether the regulatory structure remains up to date. The

division is examining a wide range of market structure

issues, including certain practices with respect to

undisplayed or ``dark trading interests'' in addition to

flash orders that are the subject of today's proposal. We

anticipate making additional recommendations to the

Commission in the coming months for proposals to address

discreet issues, such as flash orders, that warrant prompt

attention. There is also a spectrum of broader market issues

and practices that affect the interests of investors and need

to be examined closely.

I cannot tell you how pleased I am to hear that the Commission is taking the review seriously. I say bravo to the SEC. The agency tasked with upholding the integrity of our markets should actively review the rapid technological developments of the past few years and analyze their costs and benefits to long-term investors.

Eugene Ludwig, former Comptroller of the Currency, recently reminded us that each of the financial crises of the past 25 years--the collapse of the savings and loan industry, the Internet stock bust a decade later, and last year's credit market meltdown--was the result of inadequate regulation.

Another former regulator, Brooksley Born, a former Chairman of the CFTC, warned us of the opaqueness of the derivatives markets at a time when they were becoming big enough to cause trouble. Earlier this year, she recalled her warnings:

I was very concerned about the dark nature of these

markets.

And further:

I didn't think we knew enough about them. I was concerned

about the lack of transparency and the lack of any tools for

enforcement and the lack of prohibitions against fraud and

manipulation.

Unfortunately, history proved Brooksley Born right--unchecked, unexamined innovation severely weakened our markets and, as we all know, ultimately led to our financial disaster. Sometimes small, apparently technical innovations in our vast and complicated financial system can generate great benefits for all, and other times they can generate disastrous unintended consequences.

It is also fair to say that well-intentioned regulation in a complex market can also have unintended consequences. That is why we need regulators on the job, undertaking a thoughtful and reasoned analysis so we can have a clear view of where innovations may be taking us and whether wise regulations can help curb abuses. Regulators must keep pace with the latest market developments, and we in Congress must give regulators the tools they need to observe and stay abreast of the sophisticated financial players they are charged with regulating. I say that again. We in the Congress must give regulators the tools they need to observe and stay abreast of the sophisticated financial players they are charged with regulating.

Three examples from the current debate are especially illustrative of this need: colocation of servers at the exchanges, flash orders, and direct market access.

When the exchanges first began to permit traders to place computers onsite, giving these traders a few microseconds' advantage, the SEC did not insist on regulatory approval. The Commission simply let it occur. There was no active consideration then, as I have called for now, of the means by which fair access can be preserved.

The same is true for flash orders. In May, the SEC permitted the NASDAQ and BATS exchanges to introduce flash-order offerings even though both admitted that the practice was of dubious value and that they simply were being driven to adopt it by the loss of market share to competitors. Both exchanges later reversed those decisions voluntarily, which is commendable, but let's not forget that this was a telling example of rote, piecemeal review by the SEC staff applying outdated floor-based precedents to electronic-age developments.

Direct market access is another practice that deserves closer examination. Such agreements allow high-frequency traders to use their broker's market participant identification to interact directly with market centers. In order to maximize speed of execution, many sponsored access participants may neglect important pretrade credit and compliance checks that ensure faulty algorithms cannot send out erroneous trades.

According to John Jacobs, chief operations officer at Lime Brokerage, this risk is quite significant. He says:

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

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

this short timeframe . . . The next long term capital

meltdown would happen in a five-minute time period.

When did direct access begin, and has the SEC ever considered its ramifications from a comprehensive standpoint?

Some are now saying that colocation and flash orders are very old- fashioned concepts and perhaps colocation, for its part, will ultimately be practiced better in the automated environment than it has been on the floors. I am sure some old hands can tell hair-raising stories about the old days and floor space out of the Chicago pits.

But that is the point: Colocation and flash are two of many transformational changes this decade that have been considered piecemeal and only in the context of existing policies. Like direct access, these changes may have been found equal or even superior to their floor-based antecedents, but in an automated age these changes need to be subjected to a holistic analysis of their collective impact on the markets and our regulatory infrastructure.

The same is true for high-frequency trading, dark pools, payment for order flow, liquidity rebates, and other market structure issues.

The rapid rise of high-frequency trading and dark execution venues has quite simply left our regulatory agencies playing catch-up. High- frequency traders can execute over 1,000 trades in a single second. Let me say that again--1,000 trades in a single second. According to the TAB Group, these traders are now responsible for over 70 percent of all daily U.S. equity trades--70 percent; that is 7-0 percent.

We are learning more about high-frequency trading every day. According to one industry expert:

Most high-frequency shops have huge volumes but few

transactions. About 95 to 97 percent of trades are orders

sent and canceled.

What does all this mean for the long-term investor? Trading is not only faster, it is also quickly becoming less transparent. Twelve percent of trades are now conducted in dark pools, compared to less than 1 percent 6 years

ago, and substantial percentages of trades are internalized at broker- dealers, never reaching a public exchange.

Maybe in the old days there were block trades happening in the dark too. I don't doubt it. But many commentators have raised concerns about whether the darkening trends today truly threaten to undermine public price discovery. The strength of a free market is in its public display of price quotes to all market participates.

These recent developments quite simply need to be better understood.

Yet still, after all the disasters, the billions of dollars lost, the homes foreclosed, the jobs lost--after all the pain that has been caused across this country--some on Wall Street reject even the notion of regulatory scrutiny.

They become defensive about the politicization of the process when Congress asks basic questions. They say Congress and the media can never understand high-frequency trading. They point to the benefits of high-frequency trading--narrowed spreads, added liquidity, and faster executions--and ask everyone to trust there will be no side effects, no unintended consequences. Some still argue that the market operates best without any regulation; that changes in market structure are the natural consequence of the innovative and competition and there is nothing good to be gained from regulators or Congress studying possible sources of inequity.

To their credit, not everyone on Wall Street has reacted this way. Others have said that now is the right time for a comprehensive review of market structure developments. These Wall Street leaders--true leaders--acknowledge there are indeed many valid questions being raised about dark pools, payment for order flow, other market innovations, and enforcement of best execution.

Indeed, some high-frequency traders have said they welcome a regulatory examination of high-frequency trading because they are confident high-frequency trading will pass the test with flying colors. That is the correct attitude. We need a regulatory review with Wall Street's cooperation.

It is in the nature of our financial markets to push the envelope, to take on more and more risk, and to exploit any crack in the wall when there are profits to be won. There is nothing wrong with this. But to have a full accounting, we also need to add up the costs to the long- term investor, to financial stability, to innocent bystanders of each new generation of innovation.

In years past, without a sufficient regulatory presence, an aura of invincibility developed at many financial institutions. We failed to ask questions, we failed to ensure regulators were on the field with the tools they need to do their jobs, and the results are clear: Millions of Americans have lost their jobs, their homes, and their savings. We must not repeat that mistake. We must be sure that when financial markets push the envelope, take on more and more risk, and exploit any crack in the wall, they are monitored and regulated to assure it is in the public good.

It is time for Congress and the regulators to ask questions and for Wall Street to step forward responsibly and answer them with the data to back up those answers. We cannot simply react to problems after they have occurred. We need the information and resources to identify problems before they arise and stop them in their tracks.

Our goal is not to stop high-frequency trading. We don't want to slow it down. Liquidity, innovation, and competition are critical components of our financial markets. But at the same time, we cannot allow liquidity to trump fairness, and we cannot permit the need for speed to blind us to the potentially devastating risks inherent in effectively unregulated transactions.

We cannot forget that fair and transparent markets are the cornerstones of our American system. As I have said before, fairness in the financial markets may be an elusive and ever-evolving concept, but it must be defined and then vigorously defended by our regulators. The credibility of the markets and investor confidence simply demand that regulators be ever watchful, sophisticated, and tough against those who would breach the rules.

I am not demanding an immediate, wide-ranging regulatory overhaul. I will not place symbolic action over prudent investigation. That would be impulsive and irresponsible. But it is only prudent, given the risks of the past, that I will not allow potentially risky market practices to go on unexamined. I will ask questions and strive to improve my understanding of these opaque market practices and, if necessary, push appropriate reforms. I am very pleased the SEC has agreed to do the same.

If we fail to learn from past mistakes, we can be sure history will repeat itself.

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