Floor Statements

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

Mr. President, there is no doubt we stand at a critical moment in history. I am honored to be a Senator at this time in our history but even more so to be an engineer Senator. I believe the key to the future of our country and the world rests on the ability of the United States to use STEM--science, technology, engineering, and math-- to solve the major problems we face.

You can work on an issue in the shadows for decades and then suddenly the Sun breaks through and it is shining on you and it is shining very brightly. This is one of those moments for engineers, in particular for the promotion of STEM education.

Today, America's engineers have a central role to play in developing the innovative technologies that will help our economy recover and promote real job growth. In particular, as the global economy turns increasingly competitive, many nations are investing heavily in training their future scientists and engineers. We have to do the same.

We do not know from where the next generation of innovation will come. That is the very nature of innovation. But we do know the problems we face. We do know our central economic challenge. When we get through this crisis--and we will--when this recession has passed, we need to create new jobs. It is not enough to try to win back the jobs we have lost. To keep pace with our population and to keep the sacred promise to our children and grandchildren, we need to create a whole new generation of jobs.

As former President Bill Clinton has said, in recent years, we were creating jobs in three areas: housing, finance, and the consumer economy. All three of those benefited from loose credit and easy money to build up a bubble. All three of those have suffered in this economy.

I am very sorry to say that many of those jobs are not going to be coming

back. We cannot look forward to the day where carpenters are scarce because we built more houses than people could afford to buy. We do not need a revitalized legion of clever bankers any more than we need another Starbucks 1 block closer.

So where will tomorrow's jobs come from? I believe the answer lies in science, technology, engineering, and mathematics. STEM jobs will be, and must be, the jobs of the future. Whether it is energy independence, global health, homeland security or infrastructure challenges, STEM professionals will be at the forefront of the most important issues of our time.

In 2008, the National Academy of Engineering convened a panel of technology and engineering leaders to create a list of ``Grand Challenges for Engineering.'' The group included innovators from the private, public, and academic sectors with a wide range of expertise and experience. Eighteen committee members, including such well-known names as Google founder Larry Page and Segway inventor Dean Kamen, set to work to identify engineering challenges--both problems and opportunities--facing those born at the dawn of the 21st century.

After considering ideas and input from experts and the broader general public, 14 Grand Challenges were identified, some of which include: making solar energy economical, providing energy from fusion, providing access to clean water, restoring and improving urban infrastructure, engineering better medicines, preventing nuclear terror, and securing cyberspace.

Clearly, we will need STEM-educated professionals to address these Grand Challenges. In fact, according to a new study released by Georgetown University's Center on Education and the Workforce, by 2018, STEM occupations are projected to provide 2.8 million new hires. This includes over 500,000 engineering-related jobs.

So where will these STEM jobs be? What kind of work will be taking place in these jobs? The answer encompasses a myriad of locations, opportunities, skills, and subject knowledge. The following are just a few examples of what these jobs might look like.

STEM graduates can go into the biomedical fields. In the United States alone, nearly 1 out of 25 people has a history of cancer and 1 out of 13 people has diabetes. Finding scientific solutions to make health care more efficient, both in treatment and in cost, is essential for the health of our people and our economy.

This entails creating personalized medicines tailored to a patient's genetic makeup, processes to quickly and cheaply screen for diseases, materials and techniques to make surgeries and treatments less invasive, biomaterials to aid in the repair of damaged body tissues, and new strategies to overcome multiple drug resistances. Biomedical and materials engineers, as well as scientists with skills in chemistry and genetics, will be needed to tackle these issues.

STEM graduates can pursue jobs in clean energy fields, such as solar energy. Currently, solar energy's share of the total energy market is small--below 1 percent of total energy consumption. It is estimated by 2030, however, that solar electricity has the potential to satisfy the electricity needs of almost 14 percent of the world's population.

To get there, scientists and engineers will need to help us overcome the various practical and economic barriers to widespread solar power usage. This will require new technologies to capture the Sun's energy, to convert it to useful forms, and to store it for use when sunlight is unavailable. Electrical and computer engineers will be needed to lead the way and, indeed, in Delaware, my home State, they already are.

A consortium lead by engineers from the University of Delaware achieved a recordbreaking solar cell efficiency of 42.8 percent. Solar cells, as you know, convert the Sun's energy into electricity. This is a major achievement in the development of low-cost solar systems, and we will need many more of its kind.

STEM graduates can find jobs updating our Nation's infrastructure. Last year, the American Society of Civil Engineers rated the U.S. infrastructure as a D. This is unacceptable, unsustainable, and unsafe.

We need chemical and civil engineers to design, construct, and maintain streets, sidewalks, public transit, water supply networks, sewers, street lighting, waste management, public parks, and bicycle paths, just to name a few.

Professionals working on our Nation's infrastructure will also need skills in physics, electrical engineering, and urban planning. This is no small feat and will require the dedication of many new engineers. In fact, among engineering fields, civil engineering is expected to see the largest growth through 2018.

STEM graduates can help protect us from security threats. Plutonium or highly enriched uranium is used to build nuclear weapons. Vast quantities of this fissile material exists in the world today, some of it still unaccounted for, even though 260 tons of it has been secured over the last two decades under the Nunn-Lugar program. It takes less than 10 kilograms of plutonium or around 25 kilograms of highly enriched uranium to build a nuclear weapon, and several terrorist organizations have demonstrated interest in acquiring a nuclear weapon.

Consequently, we need nuclear engineers to determine how to secure these dangerous materials, detect nuclear threats at a distance, disarm potential devices, and respond and clean up after any explosion. Technical skills, in addition to various engineering skills, will be necessary to solve each of these dilemmas.

These are just a handful of the exciting and important job profiles that will be available to our Nation's STEM graduates. We will also need environmental engineers to provide access to clean water, mechanical and aerospace engineers to update our transportation methods, agricultural engineers to help tackle world hunger, and much more. All the surveys today say that young people want to ``make a difference'' with their lives, and certainly these STEM jobs will. But beyond the opportunity to make a difference, STEM graduates will also earn high salaries postgraduation. During our current economic times, this is no small incentive.

According to a recent survey by the National Association of Colleges and Employers, STEM majors account for the top five highest earning bachelor's degrees of those graduating in 2010. Specifically, engineering degrees accounted for four of the five most highly paid bachelor's degrees. Starting salaries for these graduates are between $60,000 and $75,000 per year.

Yet despite the various incentives, we are already behind in the number of scientists and engineers we will need to educate in order to fill the jobs of the future.

Between 1985 and 2007, the number of individuals receiving engineering bachelor's degrees fell by nearly 10,000. This precipitous decline occurred at the same time that the total number of undergraduate degrees rose by one-half million.

Moreover, employers are having a difficult time filling available engineering positions. Raytheon CEO William Swanson recently told the Greater Boston Chamber of Commerce that he plans to hire 4,500 engineers this year, but he finds it harder and harder to find them.

This trend must be reversed. Fortunately, organizations such as the American Society of Mechanical Engineers and the American Society for Engineering Education are working to ``prime the pump'' for the next generation of STEM professionals. To promote and improve K-12 STEM education, the American Society of Mechanical Engineers is fostering partnerships with educational groups such as the First Robotics Competition, the Junior Engineering Technical Society, Project Lead the Way, and the Girl Scouts and Boy Scouts. The American Society for Engineering Education has a publication called ``Engineering, Go For It,'' aimed at inspiring students, particularly girls and underrepresented minorities, to pursue an engineering career. They also administer a number of undergraduate and graduate fellowship and internship programs, including several sponsored by the National Science Foundation and the Department of Defense.

This type of organizational support is critical to ensuring that students across the country have access to quality STEM opportunities in K-12 education and beyond.

In my remaining time in the Senate, I will continue to encourage my colleagues in Washington to invest in STEM education. It is true we have our partisan problems in Washington these days, but I believe there is bipartisan consensus on the value of promoting STEM education.

Support for STEM education is essential for our economic growth and recovery. It is the future of our workforce. It is our children's and our grandchildren's future.

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

Mr. President, I suggest the absence of a quorum.

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

Mr. President, I rise to echo the comments of my colleagues and object to the tactics being used by the minority in the Congress to block and delay confirmation votes for President Obama's judicial nominees.

I support this body's--I really do--I support this body's longstanding tradition of respecting the rights of the minority. I think it is one of the most important characteristics of the Senate. I am not one of those who wants to change the filibuster rule. I think it is important that we have a filibuster rule and that political minorities in the Senate are respected and that their rights are respected.

However, I think this practice of indiscriminately blocking nominations serves no legitimate purpose. I don't see the time created by the delay being used to meet with the nominee, to check the nominee's credentials, or to review the nominee's scholarship, speeches, or written opinion. This is delay for delay's sake.

Of the 27 district court nominees confirmed during this Congress, only 1 has received a ``no'' vote so far, and even she was confirmed by a vote of 96 to 1. Not a single member of the minority objected to 26 out of the 27 of these nominees. Yet someone forced them to wait for weeks or months for an up-or-down vote.

The minority may say this is simply the way things are done in the Senate, but that demonstrably is not the case. As this chart shows, during the first Congress of the Bush administration, President Bush's district court nominees waited for an average of 25 days to be confirmed after being favorably reported out of the Judiciary Committee. This pace was set when Democrats were in the majority party for most of the 107th Congress and reflects a willingness to cooperate with President Bush in a bipartisan manner.

In contrast, President Obama's district court nominees have been pending for 74 days, on average, after being favorably reported out of committee. This wait only seems to be getting longer. Sharon Coleman of the Northern District of Illinois, the only judicial nominee to be confirmed so far this month, waited almost 3 months to be confirmed 86 to 0.

This is unacceptable. These nominees are good men and women who have agreed to put their lives on hold and submit to the scrutiny of the Senate in order to serve our Nation. This body owes more to these nominees for their sacrifices than to use them as instruments of delay and obstruction. As long as the minority continues to stall these nominees, then the American people will be deprived of the fair and efficient administration of justice. We now have nearly 100 judicial vacancies and more than 40 of them have been declared judicial emergencies. One of these emergencies is located in the district of Delaware.

After tomorrow, the district will be operating at half capacity with only two out of four district judges confirmed to the bench. With this concern in mind, I join with my senior Senator, Tom Carper, and urge my colleagues to agree to consider the nomination of Leonard P. Stark to the district court of the district of Delaware without delay.

Judge Stark was nominated on March 17 of this year. He received a nominations hearing on April 22, and the Judiciary Committee reported him out by a unanimous vote on May 14. Ranking Member Sessions has called him ``a fine nominee'' whom he would support. As of today, no Senator has raised any public objection to his nomination. So I am confident that Judge Stark will be confirmed by an overwhelming margin, perhaps unanimously, when he receives a final vote. However, he has remained on the Senate Executive Calendar for 2\1/2\ months now without justification or explanation.

Judge Stark has all the qualities required to be a successful district judge. Since 2007, he has dutifully served the district of Delaware as a magistrate judge and previously spent 5 years serving in the district as an assistant U.S. attorney. In his career, he has established himself as a talented, dedicated, and humble public servant who possesses a strong work ethic and the highest integrity and intellect.

He also has stellar academic credentials. He is a summa cum laude graduate of the University of Delaware, a Rhodes Scholar, and a graduate of Yale Law School, where he was editor of the Law Journal.

Following law school, he clerked for Judge Walter K. Stapleton of the U.S. Court of Appeals for the Third Circuit. Through his experiences in private practice, as an assistant U.S. Attorney, and as a magistrate judge, Leonard Stark has developed the knowledge, skills, and temperament to be an outstanding district court judge.

Therefore, I support the unanimous consent request about to be made by my colleague from Colorado to move to the consideration of several well-qualified judges whose nominations have been delayed. I know Judge Stark will be on that list.

I yield for the Senator from Colorado.

Mr. President, I rise to discuss a provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act, section 929I, that is attracting a lot of attention today, and for good reason. The SEC cited it yesterday in seeking to block a Freedom of Information Act, FOIA, action brought by Fox Business News.

Press freedom is a subject that is very important to me and many other Members of Congress, and one which our country is keen to stress as important around the world. It would be ironic if the Dodd-Frank bill substantially diminished our own press freedoms. This is particularly the case in the aftermath of a devastating financial crisis when we now hope that greater transparency into our financial institutions, markets and regulatory agencies will help ensure that systemic risks do not emerge and grow undetected.

Section 929I deals with ``records of registered persons,'' that is, information received by the SEC in the course of its oversight duties with respect to any person or entity registered under the Securities and Exchange Act and other applicable laws, such as the Investment Company Act and Investment Advisers Act. I am concerned that this provision has been written far too broadly. Indeed, it appears to have the effect of exempting from FOIA requests virtually all information received by the Securities and Exchange Commission from ``registered persons.'' An overbroad exclusion from public disclosure undermines the strong public interest in transparency. Narrowing or eliminating this new exclusion should be at the top of the list for a bill designed to amend the Dodd-Frank Act.

Section 929I reads in part:

The Commission shall not be compelled to disclose records

or information obtained pursuant to section 17(b), or records

or information based upon or derived from such records or

information, if such records or information have been

obtained by the Commission for use in furtherance of the

purposes of this title, including surveillance, risk

assessments, or other regulatory and oversight activities.

Let me repeat: The Commission shall not be compelled to disclose records or information if such records or information have been obtained by the Commission for use in furtherance of the purposes of this title, including surveillance, risk assessments or other regulatory and oversight activities.

This provision is overly broad. I understand how it could help the SEC obtain information from the firms they examine when those firms are reluctant to turn over proprietary information that might later be subject to FOIA requests. But FOIA already has exemptions in it to deal with such concerns. If those exemptions need to be broadened, we should have done so with a scalpel.

For example, the provision fails to differentiate between proprietary information that might be turned over to the SEC during an examination, financial information a firm may simply prefer not to provide, and market data collected through standard surveillance activities by the Commission. It is not difficult to imagine why hedge funds and other trading firms would be reluctant to turn over proprietary algorithms: Quite simply, those computer programs likely contain loads of historical data, analysis, pattern recognition code and other tools that comprise a trading firm's ``special sauce.'' Just as Coca-Cola and Heinz 57 have strong motivations to keep their recipes a secret, and have done so for generations, so too do proprietary traders have strong incentives to guard their carefully written algorithms.

But data collected by the SEC as part of everyday surveillance activities, including the data set to be collected pending the Commission's approval of ``large trader'' tagging and a consolidated audit trail, should fall into an entirely different category.

And as the Financial Crisis Inquiry Commission and the Senate's Permanent Subcommittee on Investigations have learned, financial companies are often reluctant to turn over extensive financial records that permit the public to better understand complex financial transactions and accounting practices.

As written, the exemption throws a cloak over all information received by the Commission from the entities the SEC regulates. It is too broad; it does not serve the public interest; it is not consistent with the general goal of greater transparency, as President Obama has emphasized both with respect to FOIA and financial regulatory issues, and it should be reevaluated by the SEC and Congress.

As I understand it, the SEC has a legitimate concern now that it must examine thousands of additional entities, including private equity and hedge funds that must for the first time must register under the Investment Advisers Act. In the course of those examinations, a hedge fund may be reluctant to turn over information of a proprietary nature because it is concerned that despite the existing exemptions written into the FOIA statute, the hedge fund cannot be certain whether a judge will uphold the exemption. And so the hedge fund will be reluctant to turn over the information, and the SEC examiner may be stymied from receiving it unless he or she turns the matter into an enforcement action.

It may be that Congress needs to give the SEC some additional ability to compel documents in such a situation, or perhaps provide some narrowly tailored clarification to a FOIA exemption for financial information of a particularly sensitive proprietary nature. But this provision as signed into law drops a net over such information that is far too wide.

Indeed, in writing such a broad provision, Congress may have inadvertently encouraged registered entities to seek even more FOIA protection before cooperating with the SEC. That is because the logical corollary of protecting confidential information is to insist on a wider scope of confidential information, which, in turn, further erodes both our press freedoms and market transparency.

In addition, the SEC may be legitimately concerned that it could be required to turn over sensitive proprietary information in response to a third-party subpoena issued in litigation to which the SEC is not even a party. Once again, however, Congress should carefully examine the appropriate contours of third-party discovery requests to the SEC. It should not categorically exclude information held by the SEC based only upon its status as having been obtained from a ``registered person.''

Over the last few years, the credibility of our markets has been damaged. Only transparency can best restore that credibility; any exemptions to transparency should hence be narrowly crafted. Section 929I needs a ``do-over.'' In the coming weeks, I hope to work with the SEC and other Senators to craft a more reasonable approach that satisfies the legitimate concerns of the SEC without sacrificing the goals of transparency and public accountability.

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, I rise today to recognize another of America's great Federal employees. This will be Federal employee No. 89.

In 1829, a British scientist who had never set foot in our country bequeathed to the American people his estate in order to create ``an establishment for the increase and diffusion of knowledge.'' That he did so is a reminder of what this young country represented to those around the world who yearned for liberty and an approach to government based on wisdom and science.

James Smithson's gift continues to enrich Americans' lives to this day in the form of the Smithsonian Institution. The millions of Americans who have visited the 19 Smithsonian museums, the National Zoo, and the over 150 affiliated institutions can attest to the value of the Smithsonian. Since its founding by Congress 163 years ago next month, the Smithsonian Institution has helped expose the American people to the arts and sciences.

Some of its museums have been traditional stops for families to bring their children when visiting Washington, such as the Air and Space Museum, the National Museum of American History, and the National Portrait Gallery. Many of us here can recall exploring them in our youth.

I can remember when I lived in Washington for 2 years after the Second World War. We didn't visit anything, and then, in the last 2 weeks, my mother took me and my sisters and we went on a tour of all the different museums in town. It was fantastic, and it is even much better today.

Other Smithsonian museums have joined them in recent years or are under construction today. The National Museum of the American Indian--a beautiful new building with wonderful, educational exhibits--is celebrating its 5-year anniversary.

The successful operation of this network of museums and galleries and the preservation of its treasures relies on the more than 4,000 dedicated Federal employees on its staff. There are dedicated, smart, hard-working employees on the Smithsonian staff.

Alison McNally is one of them--and a great one at that. As the Smithsonian's Under Secretary for Finance and Administration, Alison supervises a number of departments, including: the Office of Facilities Engineering and Operations, the Office of the Chief Financial Officer, the Smithsonian Archives, the Office of Human Resources, and the Office of the Chief Information Officer.

In this capacity, she plays an important role in the day-to-day operations of the Smithsonian, helping to ensure that it continues to provide the services Americans and foreign visitors have long enjoyed. Earlier, Alison served as the Smithsonian's senior executive officer in the office of the Under Secretary for Science. In that position, she directly oversaw a number of scientific research support programs.

Alison has been with the Smithsonian Institution since 2005 and previously spent twenty-four years working at NASA. There, she served as Deputy Associate Administrator for the Management of the Science Mission Directorate. From 2002-2004, Alison was the Associate Director of NASA's Goddard Space Flight Center.

Throughout her career in public service, Alison has consistently demonstrated a keenness for public administration and successful management.

She holds an undergraduate degree in Human Development from the University of Connecticut and a master's of social work from Columbia University. She has pursued additional study as well at the Simmons College Graduate School of Management and Harvard's Kennedy School of Government.

Madam President, I hope my colleagues will join me in thanking Alison McNally and all those who work at the Smithsonian Institution for their service to our Nation.

They are all truly great Federal employees.

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, the story of regulatory failure surrounding the Deepwater Horizon oilspill by now is all too well known. The Minerals Management Service, called MMS, the now defunct agency that had been charged with assuring that drilling off America's coast was safe, environmentally responsible, and a reliable revenue source for the taxpayers, became the single most recognizable example of regulatory capture in U.S. history.

Regulatory capture is when a regulatory agency permits its judgments to be clouded by the narrow economic interests of the industry it is supposed to be regulating. It is the absolute opposite of how regulators should work, which is to safeguard the greater and broader interests of public health, safety, and prosperity against often complex, powerful, and narrowly minded industries.

Regulatory capture can happen for a number of reasons. First, regulatory capture can happen where the revolving door constantly shuttles individuals from the private sector to the regulator and vice versa. Regulators may be compromised by the implicit promise of lucrative employment should they only look out for the industry during their watch. It is this indicator of regulatory capture at MMS that the Washington Post described in such shocking detail in last week's front- page story.

Seventy-five percent of oil lobbyists formerly held jobs in the Federal Government. Randall Luthi, who directed the MMS from 2007 to 2009, is now president of the National Ocean Industries Association, the trade association for producers, contractors, engineers, and supply companies that explore and drill for oil and natural gas in offshore waters.

According to the Department of Interior inspector general's report, one examiner conducted safety checks at four rigs owned by one company, while at the same time negotiating for a job for himself with the very same company.

It also works in both directions. According to an MMS district manager, almost all MMS inspectors had previously worked for oil companies on the same platforms they were inspecting.

As Ken Salazar testified last week before the House, he is aware of the problems caused by the revolving door and is taking steps to address it. And I know he will. Michael Bromwich, who directs the Bureau of Ocean Energy Management--the successor to the MMS--has also pledged to beef up cooling-off periods which restrict the ability of former oil regulators to seamlessly flow directly from government into a high-paying industry job.

Poor funding, morale, or training for regulators can also play a role in regulatory capture. This, too, may have played a part in the ineffectiveness of MMS. During the prior administration, the workforce at MMS shrank by approximately 8 percent, even as offshore minerals exploration leases and acres leased increased by 10 percent over the same period. Leases go up by 10 percent, employees go down by 8 percent. That does not seem to make sense, but it fits into the idea of regulatory capture.

A third factor that may lead to regulatory capture is if a regulator is responsible for just one industry, such as MMS was responsible for only regulating the exploration activities of oil companies. Industry groups with a laser-like focus can lobby single-industry regulators, whereas the public's interest is likely to be much more diffuse. In addition, the revolving door may be amplified for a single-industry regulator because the regulators have relatively few options for seeking private sector employment after they leave the single-industry regulator.

Mr. Bromwich has also been quick to recognize the problems caused by having such a small and captive pool of inspectors. As he works to make the job of oil rig inspector more attractive, Congress should support these efforts as an effective way to counter regulatory capture.

Vague statutory lines drawn by Congress, as well as loose oversight, are a fourth contributor to regulator capture because they give captive regulators plenty of room to stretch and contort the law without necessarily breaking the law or even having to explain their actions.

Finally, complex industries, large masses of proprietary data are also able to control the flow of information to the regulators-- information that will form the basis of regulation and enforcement, thereby precluding effective regulation.

We have a business that is very complex. There is a lot of information flowing. It is more and more difficult for the regulator to keep track of the information they need to do their regulation and enforcement.

While I have heard colleagues and commentators argue that Secretary Salazar did not do enough fast enough to reverse the problem of regulatory capture in time to avert the BP disaster, these myopic criticisms ignore the deep and lasting damage that Secretary Salazar found when he arrived done by many of our regulators in the previous administration.

During the last administration, a deregulatory mindset captured our regulatory agencies. They became enamored of the view that self- regulation was adequate--that was throughout the government--that rational self-interest would motivate counterparties to undertake stronger and better forms of due diligence than any regulator could perform, and that market fundamentalism would lead to the best outcomes for the most people.

When the regulators themselves feel the best regulation is no regulation at all, when a laissez faire mindset causes the regulators to be deeply distressful of curbs on any industry practice, then regulatory capture is all but ensured. During these 8 years, Congress's failure to conduct vigorous oversight was particularly damaging as well.

What we had was a situation where we basically pulled the referees off the field and did not even watch what was going on and what happened.

This deregulatory mindset, more than any other factor, explains why we have suffered so many examples of failed regulation in recent years, especially in our financial sector and oil and mineral industries.

It is interesting that I hear colleagues on the other side of the aisle say: The government didn't do this right; the government didn't do right in the oil thing. How could they when the last administration took us completely out of the oil regulation business? How did everything happen on these sites without an inspector there to check that the batteries were working, to see that inspections were carried out.

The Federal Government was denuded of any ability to do anything once the spill developed, once the leak started because we believed the reports that were put out by the companies. No one looked at them and said: Don't

worry, this will never happen. And if it does, we have a plan. Remember, that was the plan that was talking about how we were going to have to look out for the walruses. Remember?

I do not understand how one can be critical of Secretary Salazar when we saw that he came into an office where there was no regulation and where the regulators were totally, completely captured by the business. As we learned over the last 2 years, when regulators fail, it is the American people who pays the price.

When President Obama was inaugurated, therefore, he inherited executive agencies that had been weakened by 8 years of atrophy and neglect.

Another example is the Office of Thrift Supervision. It is a wonderful example of how regulatory neglect in the financial sector led us to an economic and financial crisis.

Listen to this. During the Bush administration, over 20 percent of the full-time equivalent positions at OTS were eliminated. Why did we need OTS inspectors if we did not believe we needed regulation?

This decrease in funding for OTS personnel, while striking, is not the heart of it. It does not reveal the scope of the rot in the agency. For that, one needs to examine how those regulators acted. And I suggest to everyone Senator Levin's Permanent Subcommittee on Investigations hearings that he chaired that went into detail what actually happened to the Office of Thrift Supervision.

As established in those hearings, Washington Mutual, better known as WaMu, comprised as much as 25 percent of the assets under OTS regulation. Moreover, WaMu contributed between 12 percent and 15 percent of OTS's operating revenue through the fees it paid.

Think about this. The largest institution you are regulating covers over 25 percent. Even though WaMu was the most significant and largest institution under its regulation, regulators allowed shoddy and even fraudulent lending to occur under their noses without taking remedial, corrective action or any significant enforcement measures.

Listen to this. The Office of Thrift Supervision sat by as up to 90 percent of the home equity loans underwritten by Washington Mutual were comprised of stated income or so-called liar loans. A stated income or liar loan is where I come in for a loan, the loan officer says to me: Senator Kaufman, what do you make every year? And I say: $1.6 million. They write it down. Nobody asks for a W-2 form. Nobody asks for any further information on it. They just take my word for it.

Can you believe that an institution could make liar loans that were 90 percent of their home equity loans? Ninety percent of the loans they took, when people came in and said what their income was, they never asked for a W-2 form. They never asked for any further information.

Still worse, if that is hard to believe, OTS was captured to such a great degree that it lobbied other regulators to weaken nontraditional mortgage regulations. Not only were they not looking at their businesses, the largest thrift institutions, they were trying to stop other regulators from doing it.

As if to give further evidence of its capture, OTS even went so far as to thwart an investigation into WaMu by the Federal Deposit Insurance Corporation, a secondary regulator, that could have put a stop to some of WaMu's unsustainable business practices before they did so much damage.

OTS and WaMu are just the beginning of the story, however. The problem of capture spread beyond the thrifts to those responsible for regulating Wall Street, where many of the top cops during this time were either former industry insiders or committed to deregulation and self-regulation.

As MIT economist Simon Johnson has termed it, a ``financial oligarchy'' has arisen that moved seamlessly between the private and public sectors leaving an indelible mark on the financial industry landscape in a way that tends to enrich those very oligarch and their friends.

The negotiation of the 2004 Basel II Capital Accord was emblematic of this cozy relationship. As part of these discussions, the Fed was a principal architect of a regulatory framework that would allow banks to determine capital requirements based on the judgment of the ratings agencies and their own internal models.

By outsourcing their regulatory responsibilities to the banks that they were supposed to regulate, the Fed and other bank supervisors made an implicit admission that the size and complexity of megabanks had exceeded their comprehension.

Although the Basel II Accord was not fully implemented, it effectively was applied to large investment banks. While the SEC normally regulated these firms, the Commission had no track record to speak of with respect to ensuring the safety and soundness of financial institutions. The Securities and Exchange Commission allowed these investment banks to leverage a small base of capital over 40 times into asset holdings that in some cases exceeded $1 trillion.

The head of Bear Stearns said his biggest problem was that he was allowed to expand his capital base.

When the bottom fell out of the market, the funding engine powering the investment bank business model seized up. Lehman Brothers and Bear Stearns were forced into bankruptcy and the other major investment banks faced an existential crisis.

Lehman Brothers was forced into bankruptcy and Bear Stearns was taken over by JPMorgan Chase. At the end of the day, as we all know, the American taxpayer was left holding the bill for the cost to stabilize the financial system.

Basel II's treatment of capital adequacy standards is just one telling example of regulatory capture. Federal regulators also failed to strengthen consumer protection regulations in the lead-up to the crisis, despite the explosion of the subprime market and warnings from many quarters on the frequent incidence of predatory lending practices.

Hence, just like leverage ratios, regulators allowed underwriting standards to erode precipitously without strengthening mortgage origination regulations.

Wall Street regulation is compromised by another problem--the utter dependence of regulators on the regulated for information. This closed loop depends on the unrealistic assumption--listen to this--that industry will provide regulators with an accurate data stream, even when it is the direct detriment. Too often, however, industry comes up short, and without access to meaningful data, objective analyses cannot be developed by academics, consumer advocates or the media.

A good example of this is high-frequency trading, which has grown rapidly over the past few years free from regulatory structure. Basically, it has gone from 40 percent to 70 percent of all trades that are now done by high-frequency trading. Pending finalization of the April 14 large trader rule, the SEC hasn't been collecting meaningful data about high-frequency trading--listen to this--including information on the identities of individual traders.

Even when implemented, the data will remain between the SEC, the trading firm, and the firm's broker-dealer, thereby eliminating the ability of any objective party to check the Commission's work to make sure it is doing its job of ensuring market credibility.

The recent SEC roundtable discussion on market structure issues is a perfect case in point of regulatory capture. Roundtables are designed to publicly air a diversity of views pertaining to potential regulations. These roundtables are supposed to be where a bunch of people get together with different views that represent all the views and talk about potential regulation. However, the panel that was set up on high-frequency trading, as I said in a speech on May 27, promised to be so completely one-sided and ``in favor of the entrenched money that has caused the very problems we seek to address that the panel itself stands as symbolic failure of the regulators and the regulatory system.'' Look at that panel. See who was on it, and you could see regulatory capture right before your eyes. Thankfully, the SEC agreed to make some modifications to the panel but concerns still remained.

At the opening of the panel, SEC Commissioner Luis Aguilar noted in his opening statement:

I am disappointed that our Roundtable is not constituted to

showcase the full breadth of relevant voices. And I am

concerned that

as a result, today's discussion will not bring to light how

conflicts of interest, and particular business models, may

influence the various views we'll hear today.

Commissioner Aguilar, I couldn't agree with you more. To rely on those who have benefited from the status quo to point out the very regulatory imperfections that allowed them to prosper is to doom the regulatory process from its inception.

As we emerge from this period of regulatory abdication and begin to rediscover the vital role regulation must play in ensuring fair competition and a level playing field, it will take strong leadership and determination in the face of constant industry resistance to retake the initiative in our regulatory agencies for the good of the American public.

Some commentators have looked at the record of regulatory failure and have argued that all regulation is inherently prey to capture. Regulatory capture is a fact of life, they say, and we should therefore endeavor to have as little regulation as possible. Think about that now. Regulatory capture is a fact of life, and they say we should therefore endeavor to have as little regulation as possible. Let's let the industries run it all is essentially what they are saying.

This position ignores the commonsense solutions to regulatory capture, however. Open publication of regulatory data, for example, could allow academic scrutiny and mitigate the problem of the closed loop. Strict ethics rules could mandate cooling-off periods so regulators do not take proprietary information to their new employees. It seems like common sense, right?

Congress can draw clear lines that empower regulators to act for the public interest and minimize vague mandates that can be exploited by shrewd companies. Vigorous congressional oversight can hold regulators accountable before their agencies are too far gone to the problem of capture. Agency employees should be paid fairly and treated with respect so they are not tempted to compromise their judgment in hopes of earning a lucrative industry job.

This country has a long and proud history of successful Federal regulation--a long and proud history of successful Federal regulation. In large part, the safety of our food, our roads, airspace, workplaces, and so many other things is due to successful Federal regulation. Our continued prosperity depends on continuing to have good, positive, well-done regulation, strongly and intelligently done, for the good of the public.

The final Wall Street reform bill is a case in point. It invests enormous responsibilities and discretion into the hands of the regulators. Its ultimate success or failure will depend on the actions and follow-through of these regulators in the years to come.

Congress has a vital role in overseeing the enormous regulatory process that will now take place. I have talked about this before. Congress's role in this is key. We are talking about a lot of regulations down the road. It is up to Congress to do its oversight responsibility. This will include ensuring that the regulators have adequate resources and staff, that the regulations reflect wide and objective input, and that the failed experiments of deregulation and self-regulation are put to an end.

Industry and big business have already begun their counterattack. Already they have begun their counterattack. Daily, we hear that the economic recovery is being slowed by uncertainty about Federal regulations. This argument, which went on for a number of years, might have been plausible a few years ago. I might have stopped to listen to it. But after the massive financial failures and oilspills, it rings empty to me.

I am certainly not a fan of overregulation. I think one of the problems of not having regulation is that when we do regulate, we overregulate. We do not need overregulation. But the complaint that we are starting down the path of overregulation is plainly overstated, to say the least--especially after industry malfeasance and regulatory complicity cost so many Americans their jobs, their homes, and their way of life.

How can we look at what has happened out there now; how can we look at the people unemployed and the people who have lost their homes and say we should go back to the way things were and continue with no regulation and have another incredible meltdown? Unfortunately, some in big business will always complain about having to follow the rules. But without effective rules and rules that are effectively enforced, we are all certain to bear, once again, the cost inflicted upon us by the next industry-caused disaster.

Never again can we allow our environment and our economy to be entrusted to agencies that serve no purpose other than to provide a false sense of security. Lip service, we have found, does not work. Our leadership, the Congress and our regulatory agencies, must walk the walk of enforcement while keeping regulatory capture to a minimum. Our government exists to do no less, and the American people deserve no less.

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

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 more to honor one of America's great Federal employees.

Last week, the Senate focused a lot of its attention on reforming our regulation of Wall Street. As important as that is, we must not forget that the health of our economy depends on the success of businesses on Main Street. Small businesses form the backbone of our prosperity and embody the American dream for millions of families.

From the colonial merchants at our beginning to those who opened stores in frontier towns in the 19th century, from the mom and pop shops in the postwar years to the online start-ups of our day, small businesses have driven our economy.

Over the past 57 years, the Small Business Administration has been helping small business owners obtain loans and find resources to help them prosper. By guaranteeing loans that small businesses take out from banks, the SBA enables entrepreneurs to grow and develop their businesses with confidence, which helps create jobs and improve local economies.

It was created out of the old Reconstruction Finance Corporation, which was set up during the Hoover administration to lend capital to businesses hurt by the Great Depression. The SBA was founded in 1953, on the cusp of an economic boom that saw the proliferation of new small businesses throughout the Nation.

In 1964, the SBA's Equal Opportunity Loan Program helped tackle poverty by encouraging new businesses started by entrepreneurs living below the poverty line. In the aftermath of natural disasters, the SBA provides emergency assistance to help keep small businesses running. Today, the SBA continues to play an important role in helping small business owners launch and grow their businesses.

The great Federal employee I am honoring this week has worked at the SBA for 16 years.

Jayne Armstrong currently serves as the SBA district director for Delaware. I have known her for several years, and I have seen firsthand her dedication to helping Delaware small businesses thrive.

Jayne, a native of Pittsburgh, worked in advertising, high-tech economic development, and higher education development before joining the SBA in 1994. She holds bachelor's and master's degrees from West Virginia University. First serving as the district director for West Virginia and regional advocate in the SBA's Office of Advocacy, Jayne helped organize the White House Conference on Small Businesses in 1995. She also represented the SBA in Russia during the first-ever formal exchange between American and Russian entrepreneurs the following year.

Since coming to Delaware and, Mr. President, I should add that she has lived in my home State for the past 10 years--Jayne has become one of the greatest advocates for First State entrepreneurs. She has helped hundreds of Delawareans turn ideas into businesses. Nothing, including the economic downturn, slows her down in her drive to help small business owners obtain the loans they need to open or expand.

Jayne has placed a particular emphasis on helping entrepreneurs take advantage of SBA loan programs created through the Recovery Act, such as Queen Bee Beauty Supply in Smyrna, a minority woman-owned business, and Miller Metal Fabrication in Bridgeville, a design engineering and manufacturing company.

These are just two of the hundreds of businesses that have Jayne and the SBA to thank for helping them get their start or expand into new opportunities.

Jayne is also substantially involved in our State's nonprofit community. She serves on the boards of Girls, Inc., the Caesar Rodney Rotary Club, and Delaware Tech's Entrepreneurial Advisory Consortium, among others. Former Governor Ruth Ann Miller appointed her to serve on the Delaware Commission for Women.

The SBA serves as a fitting example of how the Federal Government works with the private sector to fuel job creation--a goal we are continuing to focus heavily on in this Congress.

I hope my colleagues will join me in thanking Jayne Armstrong and all of the men and women at the Small Business Administration for their hard work to help our small business sector grow and prosper. They are all truly great Federal employees.

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

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

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

Mr. President, 2 years ago for the first time global investments in clean energy technology exceeded those for fossil fuels. This is clearly a trend that will continue, and a good trend. Unfortunately, America is not keeping up with the clean energy revolution. Today, 90 percent of the market for production of clean energy is outside the United States. We are losing the race to develop those technologies in nearly every market.

Of the top 10 solar panel companies in the world, only 1 is American. Similarly, of the top 10 wind turbine manufacturers, only 1 is American. And of

the top 10 advanced battery manufacturers, only 2 are American.

For decades we have talked about the need to reform our Nation's energy policy. Every President since Franklin Delano Roosevelt has included energy reform in their policy agenda, and in virtually every Congress we passed an energy bill. But these efforts have not been successful in revolutionizing our Nation's energy system because they did not go far enough. Our oil imports have tripled since 1974. Today we rely on fossil fuels to meet 86 percent of our energy needs and we are one of the largest contributors to global carbon pollution.

The truth is simple and unmistakable. If we want to move away from dirty fossil fuels, we need to put a price on carbon pollution and we need to do it now. Putting a price on carbon will reflect the true costs of our energy sources and enable market forces to drive American ingenuity to develop clean energy technologies that will create jobs, enhance U.S. competitiveness, strengthen national security, and cut carbon pollution.

We are in the worst economic recession our country has seen since the Great Depression. We need to invest in sectors of the economy that can create jobs today and then long into the future. Studies have shown that investments in clean energy jobs create more jobs per dollar than fossil fuel-based energy products. These clean energy jobs use American ingenuity to turn Sun and wind into electricity, waste into fuel, and reduce the energy we use to power our homes, businesses, cars, and trucks. These are the sectors that will provide the long-term economic security and job creation we desperately need.

Studies by numerous academic institutions show that by putting a price on carbon, we could create up to 1.7 million net new jobs over the next 10 years. That is 170,000 jobs per year and includes any jobs that may be lost in the transition away from fossil fuels. Many clean energy jobs cannot be shipped overseas. From installing insulation to building offshore wind turbines, these are jobs that can exist only on American soil. The creation of these new clean energy jobs will themselves create a multiplier effect, allow Americans to do more with their income--such as eat out at a restaurant, take a vacation, or buy a home. These activities could add an additional $39 billion to $111 billion boost to the economy. It is clear that investing in clean energy will give us the best bang for the buck by creating more jobs today and for generations to come, paving a long-term sustainable path to economic recovery.

The good news is that we do not have to wait for these clean energy technologies to be developed. We can get started today. Over the last few decades we made great strides in improving green energy technologies. For example, advances in wind energy technology have reduced the cost from 30 cents per kilowatt hour in the early 1980s to less than 5 cents per kilowatt hour today. The Obama administration as well as cities and States across the country have recognized the potential for these technologies. In fact, the energy provisions of the Recovery Act represent the largest single investment in clean energy in American history.

The truth is, as much as that is, it is still not nearly enough. The rest of the world also faces an economic recession, energy insecurity, and carbon pollution, and many countries have also begun to take significant steps to transition to a new clean energy economy, including China.

We have some things in common with China. We each contribute roughly 20 percent of the world's carbon pollution, and we both rely heavily on foreign oil to meet our energy needs. However, China is outpacing the U.S. investments in clean energy. From 2005 to 2009, China's investment in clean energy increased by 148 percent. This surge of financing led China to surpass the United States for the first time last year, spending nearly twice as much on renewable energy technology.

China is now the largest manufacturer of wind turbines and the largest manufacturer of solar panels, 95 percent of which they export to other countries.

My home State of Delaware is a leader in renewable energy development. In fact, we are on the verge of constructing one of the first offshore wind farms in the United States. The project leaders are working hard to make sure that the turbines off the Delaware coast will proudly wear the label ``Made in the U.S.A.''

Today, the average wind tower has 50 percent American-made components. If we want to ensure that 100 percent of future wind and other renewable energy projects are made in America, then we must make it a national priority. Only then will we have the capacity to meet our own rising demands for clean energy.

We must also recognize the fact that our reliance on foreign oil is a serious threat to our national security. The United States imports nearly 60 percent of the oil we use, and 70 percent of the imports come from outside North America. All told, we send $1 billion overseas every day for foreign oil. Some of the nations we buy oil from do not share our interests and may be hostile to the United States or their own people, and some of these nations are unstable, corrupt, and dangerous. Because of this, we send our troops overseas to ensure the secure flow of oil around the world. This stretches our military thin, and puts our troops in harm's way.

Even during times of peace, we have spent $50 billion a year to patrol shipping lanes and secure Middle Eastern oilfields and transport routes. Our dependence on foreign oil also forces us to deal with undemocratic nations in order to protect our interests in oil. It reduces our leverage and forces us to make oil security part of our international diplomatic and military strategies.

Furthermore, because we consume 25 percent of the world's oil, our high demand drives up prices worldwide. So no matter from whom we choose to buy oil, oil-rich nations, some of which are unstable and hostile to the United States, will reap the benefits.

This dependence on oil also leaves us vulnerable to price manipulation by entities such as OPEC, which can influence global oil prices at any time, as they have done so many times in the past. We have the opportunity now to make this right. We can eliminate the threat of foreign oil to our national security by transitioning to a clean energy economy. We can harness American ingenuity and regain our competitive edge in the global markets. We can create hundreds of thousands of new jobs in America for generations to come.

By putting a price on carbon, we will send a signal to investors, industries, manufacturers, and global competitors that the future of the American economy lies in clean energy.

Pricing carbon is the most cost-effective policy tool available to transition the United States away from dirty fossil fuels. It will create incentives for businesses and industry to find low-cost solutions to reduce carbon pollution, and it will send a clear signal that offers predictability in the marketplace. It will allow businesses and investors to finance long-term projects in renewable energy knowing that they are standing on the same common ground as their competitors.

Many of the new clean energy technologies require decades of lead time before they are ready for commercial-scale development. Therefore, it is imperative that we start investing in them immediately. Furthermore, because market barriers exist, we must also provide additional investments such as loan guarantees, grants, tax incentives, and other assistance to encourage early and significant action toward clean energy technology development and deployment.

We can no longer afford to pay for the high cost of a fossil-based economy. Putting a price on carbon will reflect the true costs of our energy sources and enable market forces to drive American ingenuity to develop clean energy technologies. We have the most creative and talented workforce in the world. We can transform our energy system to one that creates jobs and enhances U.S. competitiveness, strengthens national security, and cuts carbon pollution. But we have to take the bull by the horns. Now is the time to chart a new course for the country.

I urge my colleagues to join me and seize this moment.

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

Madam President, I rise today to speak on the Dodd-Frank bill. I must start by expressing my awe--that old expression from Iraq, ``shock and awe''--at what Chairman Dodd has been able to do during this session of the Congress. I have been around this place since 1973, and I genuinely cannot think of an example where an individual Senator ever participated in passing three bills in one Congress of the magnitude of the health care bill, the credit card reform bill, and now the Dodd-Frank bill. If there is a legislative hall of fame, there is a spot for Chris Dodd in that hall of fame.

I am going to speak today about areas where I don't agree with this bill. Anyone who has followed my speeches on the floor would recognize that I have a difference of opinion on a number of issues. However, I wish to make it clear from the beginning--and I will raise it again in my speech--to the extent this bill doesn't reach where I want it to reach, the responsibility lies on my friends--and I truly mean my friends--and colleagues on the other side of the aisle.

Time and again, vote after vote, they voted as a block to block meaningful reform on many issues. We can talk about the Brown-Kaufman amendment to break up the banks or we can talk about the maneuvers that were done on the Brownback bill so we never got a vote, and on Levin- Merkley. So as I give this speech today, the reason we didn't get the things I wanted in this bill is because 41 Republicans, time and time and time again--when there was a vote up they could have changed the way we do things; they could have instituted the kinds of reforms I wanted in this bill--voted against it.

So Chairman Dodd was left with the problem of, How do we get the votes together to pass the bill? It is essential that we pass a bill, and a good bill, and we did, and I am voting for it. But it could have been, in my opinion, a better bill if several votes had gone the other way.

After months of careful consideration, landmark financial reform legislation moves toward final passage. While this bill is a vast improvement over the existing regulatory structure, I believe it should go further with respect to erecting statutory rules that address the fundamental problem of too big to fail.

Anyone who has heard my speeches on the Senate floor starting 4 or 5 months ago will understand my position on that. I made it abundantly clear. I will support the conference report, but I do so with reservations about a missed opportunity to enact meaningful reforms that would prevent another financial crisis. But as I said before, ultimately, given the makeup of the Senate and the requirement for 60 votes and the intransigence on the other side of the aisle, this was the best bill that could pass.

For those who wish the bill were stronger, let there be no confusion about where the blame lies. It is because almost every Senator on the other side of the aisle did everything they could to stall, delay, and oppose Wall Street reform.

To be sure, the bill that has come out of conference includes some extremely important reforms. It establishes an independent Consumer Financial Protection Bureau with strong and autonomous rulemaking authority and the ability to enforce those rules for large banks and nonbank entities such as payday lenders and mortgage finance companies. In addition, it requires electronic trading and centralized clearing of standardized over-the-counter derivatives contracts, as well as more robust collateral margin requirements. The bill's inclusion of the Kanjorski provision will give regulators the explicit authority to break up megabanks that pose a ``grave threat'' to financial stability.

I was pleased that the bill includes a provision I helped develop to give regulators enhanced tools and powers to pursue financial fraud. Through the Collins provision, the bill also establishes minimum leverage and risk-based capital requirements for bank holding companies and systemically risky nonbank institutions that are at least as stringent as those that apply to insured depository institutions, an important reform in this bill.

In light of the failures of past international capital accords, this requirement will set a much-needed floor on how low capital can drop in the upcoming Basel III negotiations on capital requirements. It will also ensure that the capital base of megabanks is not adulterated with debt that masquerades as equity capital.

That being said, unfortunately, I believe the bill suffers from two major problems. First, the bill delegates too much authority to the regulators. I have been around the Senate for 37 years. As I said on the Senate floor on February 4 of this year and in several speeches since then, I know that many times laws are not written with hard and clear lines. Laws are a product of legislative compromise, which often means they are vague and ambiguous. We often justify our vagueness by saying the regulators to whom we grant statutory authority are in a better position than we are to write the rules--and then to apply those regulatory rules on a case-by-case basis. But, as I have said, this was not one of those times. This was a time for Congress to draw hard lines that get directly at the structural problems that afflict Wall Street and our largest banks.

Despite repeated urging from me and others to pass laws that would help regulators to succeed, Congress largely has decided instead to punt decisions to the regulators, saddling them with a mountain of rulemakings and studies. The law firm Davis Polk has estimated that the SEC alone must undertake close to 100 rulemakings and more than a dozen studies. Indeed, Congress has so choked the agencies with rulemakings and studies, the totality of the burden threatens to undermine the very ability of the agencies to accomplish their ongoing everyday mission. I for one urge the agencies carefully to triage these required rulemakings and studies, establish a hierarchy of priorities, and ensure that the agencies do not shift all resources to new rules meant to address old problems to such a degree that they fail to stay on top of current and growing problems. I will have more to say on this subject in a future speech.

Second, the legislation does not go far enough in addressing the fundamental problem of ``too big to fail.'' Instead of erecting enduring statutory walls as we did in the 1930s, the bill invests the same regulators who failed to prevent the financial crisis with additional discretion and relies upon a resolution regime to successfully unwind complex and interconnected mega-banks engaged across the globe. I am also disappointed that key reform provisions like the Volcker Rule and the Lincoln swaps dealers spin-off provision were scaled back in conference.

The bill mainly places its faith and trust in regulatory discretion and on international agreements on bank capital requirements and supervision. After decades of deregulation and industry self- regulation, it is incumbent upon the regulators now to reassert themselves and establish rulemaking and supervisory frameworks that not only correct their glaring mistakes of the past, but also anticipate future problems, particularly risks to financial stability. Unfortunately, the early indications we are seeing out of the G-20 and so-called Basel III discussions are not encouraging, as critical reforms are already being watered down and pushed back in part because some foreign regulators carelessly refuse to heed the risks posed by their megabanks.

The legislation also puts in place a resolution authority to deal with these institutions when they inevitably get into trouble. While such authority is absolutely necessary, it is not sufficient. That is because no matter how well Congress crafts a resolution mechanism, there can never be an orderly wind-down of a $2-trillion financial institution that has hundreds of billions of dollars of off-balance- sheet assets, relies heavily on wholesale funding, and has more than a toehold in over 100 countries. Of course, since financial crises are macro events that will undoubtedly affect multiple megabanks simultaneously, resolution of these institutions will be enormously expensive. And until there is international agreement on resolution authority, it is probably unworkable.

Given the history of financial regulatory failures and the enormous burden of rulemakings and studies with which the regulators are being tasked, Congress has a critical oversight responsibility. Congress first must ensure that the regulators have enough staff and resources at their disposal to follow through on their serious obligations. Just as important, Congress must monitor the regulatory phase of this bill's implementation closely to ensure that the regulators don't return to ``business as usual'' when the experience of the most recent financial crisis fades into memory.

How quickly we forget. Time and again, I have heard people speak as if there was no big financial crisis, saying: I have a bank in my hometown that is going to have a problem with this legislation. So we should let all the banks be free to do whatever they

want to do. We had a crisis here that practically destroyed the country, the world, and these people are bringing up anecdotal evidence to give these banks more responsibility and not go after the root cause.

For example, in addition to granting great discretion to regulators on how they interpret the ban on proprietary trading at banks, the scaled-back Volcker Rule contains a large loophole that allows megabanks to continue to own, control and manage hedge funds and private equity funds under certain conditions. Most notably, it includes a de minimis exception that permits banks to invest up to three percent of Tier 1 capital in hedge funds and private equity funds so long as their investments don't constitute more than three percent ownership in the individual funds.

The impact of a supposedly small three percent de minimis exception for investments in hedge funds and private equity firms has the potential to be massive. For example, a $2 trillion bank that has $100 billion in Tier 1 capital would be able to invest $3 billion into hedge funds. Since that $3 billion could only constitute three percent ownership, it would need to be invested alongside at least $97 billion of funds from outside investors. The bank would therefore be able to manage $100 billion in hedge fund assets, a massive amount equal to the current size of the largest hedge funds in the world combined. What's more, that $100 billion in assets can be leveraged several times over through the use of borrowed funds and derivatives into overall exposures that could exceed a trillion dollars. And given the ambiguity of the legislative language, unless clarified by a rulemaking, some commentators have indicated that megabanks could potentially provide prime brokerage loans to hedge funds they partially own and run.

Fortunately, the final bill does place costs on banks' de minimis investments in hedge funds and private equity funds. Specifically, the legislation requires a 100 percent capital charge on these proprietary investments, making them expensive for banks to hold. While this may be a helpful deterrent, I am concerned that it will not be enough of one, particularly when considering how lucrative and risky an activity it is for banks to run hedge funds and private equity funds.

The overarching problem is that banks will continue to be able to offer and run--never mind, partially own--risky investment funds. Even though the scaled-back Volcker Rule includes a ``no bailout'' provision, I have concerns about the credibility of that edict. Under any circumstance, the failure of a massive hedge fund run by a megabank would pose serious reputational and financial risks to that institution.

Just look at what happened when the structured investment vehicles, or SIVs, of Citigroup and other megabanks began to falter. Because of the reputational consequences of liquidating these funds and allowing them to default on their funding obligations, they were bailed out by the megabanks that spawned them even though the SIVs themselves were generally separate, off-balance-sheet entities with no official backing from the banks.

Finally, the strength of the core part of the Volcker Rule--the ban on proprietary trading--will depend greatly on the interpretation of the regulators. They will ultimately be the arbiter of whether broad statutory exceptions for ``market making'' or ``risk-mitigating hedging'' or ``purchases'' or ``sales'' of securities on ``behalf of customers'' are allowed to swallow the putative prohibition. I therefore urge the regulators to construe narrowly those activities that constitute exceptions to proprietary trading to ensure that the Volcker Rule has some teeth in it.

Senator Lincoln's original swap dealer spin-off provision would have prohibited banks with swap dealers from receiving emergency assistance from the Federal Reserve or FDIC. By essentially forcing megabanks to spin off their swap dealers into an affiliate or separate company, this section would have helped restore the wall between the government- guaranteed part of the financial system and those financial entities that remain free to take on greater risk. It would also have forced derivatives dealers to be adequately capitalized.

While the final bill includes the Lincoln provision, it limits its application to derivatives that reference assets that are permissible for banks to hold and invest in under the National Bank Act. Since that exception covers interest rates, foreign exchange and other swaps, it ultimately exempts close to 90 percent of the over-the-counter derivatives market. Regulators must therefore reduce counterparty exposures by requiring the vast majority of derivatives contracts to be cleared and calibrate carefully the amount of capital that bank derivatives dealers must maintain. Only then can we be sure we never again face a meltdown caused by excessively leveraged derivatives exposure that no regulator helps to keep in check.

The financial reform bill places enormous responsibilities and discretion into the hands of the regulators. Its ultimate success or failure will depend on the actions and follow-through of these regulators for many years to come.

One of my main concerns is, if we elected another President who believed we should not have regulators and regulation, they would again have the ability to do what they did to cause a meltdown.

It is estimated that various Federal agencies will be charged with writing over 200 rulemakings and dozens of studies. Many of the same regulators who failed in the run-up to the last crisis will once again be given the solemn task of safeguarding our financial stability. Like many others, I am concerned whether they have the capacity and wherewithal to succeed in this endeavor.

I repeat again, Congress has an important role to play in overseeing the enormous regulatory process that will ensue following the bill's enactment. The American people, for that matter, must stay focused on these issues, if just to help ensure that Congress indeed will fulfill its oversight duty and its duty to intervene if the regulators fail. Likewise, although I will be leaving the Senate in November, I will be watching closely to see how the regulators follow through on the enormous responsibilities they are being handed.

Let us not forget why reform is so necessary and important. After years of Wall Street malfeasance and the systematic dismantling of our regulatory structure, our financial system went into cardiac arrest and our economy nearly fell into the abyss. Wall Street, which had grown out of control on leverage and financial gimmickry, blew up. More than 8 million jobs were wiped out; millions more have lost their homes. We spent trillions of dollars in monetary easing and emergency measures to avert the wholesale failure of many of our megabanks. Not surprisingly, we continue to feel the aftershocks of the worst financial crisis since the Great Depression.

Every single thing you look at, almost without exception, when you read our newspapers, is related to our present economic situation, which was caused by lack of regulatory action on Wall Street.

The banks are not lending. Fed Chairman Bernanke just days ago urged them to do more for small businesses. Companies and consumers alike remain shaken in their confidence. And despite dramatic stimulus measures, the economic recovery has been slow and tentative. Many of the opponents of Wall Street reform would like to make the dubious claim that the recovery is being held back by uncertainty about future regulations and taxes. Can you believe that? In reality, it is being held back by the financial shock and the fact that we are still in a period of financial instability and undergoing an excruciating process of deleveraging. Even now it is unclear whether a European banking crisis based on their holdings of sovereign debt will continue to impede that recovery.

It is also being caused by the fact that Americans are losing faith in the credibility of our markets. Who wouldn't, after what has happened?

I think it has been an important factor in our present hiccup-- hopefully, it was a hiccup and not a double dip.

It is, therefore, imperative that we build a financial system on a firmer foundation. The American economy cannot succeed--cannot succeed--unless we restore and maintain financial stability--not only restore and maintain financial stability but maintain

the credibility of our financial system. We simply cannot afford another financial crisis or continued financial instability if the American economy is to succeed in the coming decades. Getting financial regulation right and maintaining it for years to come should be one of this Nation's highest priorities because the price of failure is far too high.

I yield the floor.

Madam President, I just laid it out. I taught a course on Congress in law school for 20 years. I say this in all sincerity: Houdini could not have gotten through this process. Really and truly, when one looks at it, Houdini could not have gotten through this process with a bill.

I try very hard to be bipartisan in everything I do, and I try to speak well of my colleagues because I really do like every one of my colleagues on the other side. That is not hyperbole. But when we start out with 41 Senators bound and determined to slow down, delay, stop, and block, it makes the job the Senator from Connecticut has done even more incredible. And then we have to get 60 votes on anything of substance. Then we have to go over to the House side. And God bless our friends on the House side. When I talk with them, they just look over here and cannot believe we ever get anything done.

Getting this bill done, getting it through the Senate, dealing with all the stakeholders, dealing with the administration, dealing with the folks on the House side, and, with all due respect, doing it three times in one Congress, is definitely a Hall of Fame performance.

I thank the Senator again.

Madam President, I totally agree with the Senator. It is oversimple. I know the Senator from Connecticut received a lot of support from the Republican side. I know how difficult it is to be the person standing in your caucus when everyone in your caucus wants to vote another way. I appreciate that.

What is amazing to me is what passed was what the three of them would sign on to or others would sign on to. The idea that the Senator came with a bill--every one of my concerns I raised today, if we had gotten some help from the other side might have gone another way. But they were not going to go another way with the group we had.

I could not agree with Senator Dodd more. I think it is easy to stand up in our caucus and be for this bill. I think what they did was truly courageous. But I also think that on every major issue, to have to figure out how we get 60 votes is a special, difficult problem. It is not like a swan dive. It is not, like they do in the Olympics, a double summersault. Putting all those things together is a triple summersault in the pike position. That is the point I want to make--the difficulty of getting a bill when we need to get 60 votes on every issue and there is a constant pressure on the other side for all to vote together one way.

Mr. President, in the last few weeks, great turmoil has unfolded in Kyrgyzstan. According to media reports, ethnic riots in the southern cities of Osh and Jalalabad have left up to 2,000 dead--309 confirmed by the Kyrgyz Government--thousands have been injured, and approximately 400,000 Uzbeks have been displaced.

I am deeply concerned about ethnic clashes and ongoing tension between the Kyrgyz and Uzbeks, especially given reports that international observers have noted they are reminiscent of the tragedies in Bosnia and Rwanda in the 1990s. Today, the situation appears to have stabilized, but we cannot discount the potential for renewed conflict after an apparent lull, which happened in both Bosnia and Rwanda.

We must also not forget that what happens in Kyrgyzstan has implications for U.S. interests throughout central Asia. As the Senate noted in Resolution 566, which passed unanimously on June 25, the events of the past month could spark unrest across the Ferghana Valley, which borders Kyrgyzstan, Uzbekistan, and Tajikistan. Kyrgyzstan also plays host to a U.S. air base at Manas International Airport that serves as a critical supply line for NATO and U.S.-led operations in Afghanistan.

For these reasons, I rise today to urge the provisional government and all citizens of Kyrgyzstan to move ahead with the process of reconciliation. I would also like to commend the Obama administration and others in the international community--particularly the United Nations and Russia--who have rendered fiscal and humanitarian aid to the Government of Kyrgyzstan during this difficult time. The international community must call on all parties to refrain from violence, cease persecution of minorities, and explore peaceful routes to conflict resolution.

There is other news out of Kyrgyzstan worth noting--namely, the referendum held on June 27 in support of a constitution that will establish central Asia's first parliamentary democracy. This referendum was peaceful and inclusive, and I commend the provisional government for organizing this process. The referendum marked a historic opportunity to usher in a new period of democracy and stability in Kyrgyzstan, and the stakes are high. This is why I would like to highlight three areas where I hope there can be additional progress can be made.

Perhaps most importantly, there must be a credible investigation into the recent violence. One of the most important actions to take is to establish an investigative team that is viewed as credible by all sides. This investigation must ensure the perpetrators of violence are held accountable for their actions and initiate a process whereby all citizens, including ethnic Uzbeks, see themselves as sufficiently represented in the country's national institutions.

The interim government must also ensure a smooth transition to the new Constitution. This means that the Kyrgyz authorities should redouble efforts to prevent the escalation of violence, and observers must monitor the elections. The first transition of power is critical to the success of this democratic transition because it will set the baseline for all future elections. The people of Kyrgyzstan have shown overwhelmingly that they want democracy, and now the provisional government should do everything in its power to make those aspirations a reality.

Finally, the government must promote freedom of the press. According to Freedom House, in 2010, Kyrgyzstan was ranked 159th of 192 countries. At this critical juncture, the interim government may feel tempted to muzzle criticism to avoid giving fodder to dissidents. But to do so would undermine its credibility far more than any words published in a free press. There is an undeniable connection between a population's confidence in their political system and the capacity of that system to ensure the free flow of information through an independent media. If the interim government and its successor want to identify the failures of previous governments in Kyrgyzstan, they need look no further than its abysmal record in the area of press freedom. To make the new constitution in Kyrgyzstan a success, the nation needs a truly independent media.

Mr. President, we are at an important turning point in Kyrgyzstan, where there is a glimmer of hope about democracy taking root in the future. At the same time, the potential for renewed unrest, rampant corruption, and curtailed freedoms could easily jeopardize recent progress. It is incumbent on all sides to act responsibly and to ensure there is not a resurgence of violence, so that the new Government of Kyrgyzstan can set an example of successful democracy for the region.

Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on July 15, 2010, at 9:30 a.m.

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 July 15, 2010, at 9:00 a.m.

Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet during the session of the Senate on July 15, 2010, at 10:00 a.m. in Room 253 of the Russell Senate Office Building.

Mr. President, I ask unanimous consent that the Committee on Finance be authorized to meet during the session of the Senate on July 15, 2010, at 10 a.m., in room 215 of the Dirksen Senate Office Building, to conduct a hearing entitled ``Choosing to Work During Retirement and the Impact on Social Security.''

Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on July 15, 2010, at 2:30 p.m. to hold a hearing entitled ``The New START Treaty: Maintaining a Safe, Secure and Effective Nuclear Arsenal.''

Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet during the session of the Senate on July 15, 2010, at 4 p.m., in room SD-226 of the Dirksen Senate Office Building, to conduct a hearing entitled ``Nominations.''

Mr. President, I ask unanimous consent that the Subcommittee on Consumer Protection, Product Safety, and Insurance of the Committee on Commerce, Science, and Transportation be authorized to meet during the session of the Senate on July 15, 2010, at 2 p.m., in room 253 of the Russell Senate Office Building.

Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs' Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security be authorized to meet during the session of the Senate on July 15, 2010, at 10 a.m., to conduct a hearing entitled, ``Preventing and Recovering Government Payment Errors.''

Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs' Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia be authorized to meet during the session of the Senate on July 15, 2010, at 2:30 p.m., to conduct a hearing entitled ``The Federal Government's Role in Empowering Americans to Make Informed Financial Decisions.''

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

Madam President, I rise once again to recognize one of our Nation's great Federal employees. Here are all the employees we have recognized to date.

Madam President, we in Washington are in the midst of a summer heat wave. I know it is the same for millions of Americans across the country. This comes on the heels of a harsh winter where the Capital City endured heavy snowfall that shut down businesses and even certain government offices. The powerful forces of nature continue to challenge us.

Many Americans only notice weather in its extremes. The hard-working men and women of the National Oceanic and Atmospheric Administration, or NOAA, spend their careers making it easier for us to address nature's challenges. This year is NOAA's 40th anniversary. It was created in 1970 from three former agencies, and since that time NOAA employees have been at the forefront of weather prediction, oceanography, and fishery management.

Whenever anyone turns on the television and sees an alert from the National Weather Service, that is NOAA at work. If you go to the Pacific coast and enjoy the beaches, you can feel safe knowing that NOAA's tsunami warning system stands at the ready. NOAA personnel are also leading the way to ensure the long-term sustainability of our coastal fisheries so those who make their living from the sea can continue to do so for generations to come.

The great Federal employee I am recognizing today won the 2008 Service to America Medal for Homeland Security for his work at NOAA helping to detect and warn against destructive tsunamis. Dr. Eddie Bernard has served as Director of NOAA's Pacific Marine Environmental Laboratory in Seattle, WA, since 1982. One of the leading experts on tsunamis, he has published over 80 scientific articles and edited books on the phenomenon.

For 3 years Eddie directed the National Tsunami Warning Center in Hawaii, and he was the founding chairman of the National Tsunami Hazard Mitigation Steering Committee, a joint Federal-State effort.

In addition to his work on tsunamis, as Director of the Pacific Marine Environmental Laboratory Eddie oversees a number of important oceanographic research programs such as El Nino forecasts and studies of underwater volcanoes.

Eddie received his bachelor's degree in physics from Lamar University, and he holds master's and doctoral degrees in physical oceanography from Texas A&M.

In order to protect our coastlines against damage from Pacific tsunamis such as the one that devastated the coasts of South Asia in 2004, Eddie led the development of the innovative DART system. As a tsunami wave moves under the ocean, DART--which stands for deep ocean assessment of tsunamis--uses buoys to report data back to the Tsunami Warning Centers.

It took years to perfect, and Eddie and his team had hoped to get close to a 60-percent accuracy rate in predicting the scope and intensity of incoming tsunamis. As it turns out, they

were able to achieve over 90 percent accuracy with DART. Their system became the basis for the Tsunami Warning and Education Act, which passed the Congress in 2006. Eddie was instrumental in helping to draft that legislation which strengthened tsunami detection, warning, and mitigation programs to ensure that we are prepared for even the worst- case scenarios.

The work of NOAA employees is often not glamorous, but it saves lives, protects property, and helps to prepare our coastal communities to meet the challenges of nature. My home State of Delaware is filled with coastal communities, and the work NOAA performs in a range of areas to help coastal States such as Delaware in so many ways.

I hope my colleagues will join me in thanking Dr. Eddie Bernard and all those at NOAA who continue to monitor the seas and skies on our behalf. They are all truly great Federal employees.

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.

Mr. President, I rise in support of the nomination of Solicitor General Elena Kagan to be an Associate Justice on the U.S. Supreme Court.

Last month, the Judiciary Committee held 4 days of hearings on General Kagan's nomination, including 2 very full days of testimony from the nominee herself.

I came away from the hearings deeply impressed with General Kagan's intellect, thoughtfulness, demeanor, and integrity. These characteristics, already plainly evident in her lifetime of accomplishment, were on full display during her testimony.

Last year, when Justice Souter announced his retirement, and again when Justice Stevens announced his retirement this April, I suggested that the Court would benefit from a broader range of experience among its members.

My concern was not just the relative lack of women or racial or ethnic minorities on our Federal courts, though that deficit remains glaring.

I was noting the fact that the current Justices all share very similar professional backgrounds. Every one of them served as a Federal circuit court judge before being appointed to the Supreme Court.

Not one of them has ever run for political office, like Sandra Day O'Connor or Earl Warren or Hugo Black.

I am heartened by what this nominee would bring to the Court based on her experience working in and with all three branches of government, the skills she developed running a complex institution like Harvard Law School, and yes, the prospect of her being the fourth woman to serve on our Nation's highest court.

Some pundits, and some Senators, have suggested her lack of judicial experience is somehow a liability. I could not disagree more.

While prior judicial experience can be valuable, the Court should have a broader range of perspectives than can be gleaned from the appellate bench.

In the history of the U.S. Supreme Court, more than one-third of the Justices have had no prior judicial experience before being nominated. And a nominee's lack of judicial experience has certainly been no barrier to success.

When Woodrow Wilson nominated Louis Brandeis in 1916, many objected on the ground that he had never served on the bench.

Over his 23-year career, however, Justice Brandeis proved to be one of the Court's greatest members. His opinions exemplify judicial restraint and his approach still resonates in our judicial thinking more than 70 years after his retirement.

Felix Frankfurter, William Douglas, Robert Jackson, Byron White, Lewis Powell, Harlan Fiske Stone, Earl Warren and William Rehnquist all became Justices without having previously been judges. They certainly all had distinguished careers on the Supreme Court.

As Justice Frankfurter wrote about judicial experience in 1957:

One is entitled to say without qualification that the

correlation between prior judicial experience and fitness for

the functions of the Supreme Court is zero.

We have all now had the opportunity to review General Kagan's extensive record as a lawyer, a policy adviser, and administrator, and to listen to her thoughtful and candid answers to a wide range of probing questions.

Throughout her career, she has consistently demonstrated the all-too- rare combination of a first-rate intellect and an intensely pragmatic approach to identifying and solving problems.

Last summer, during then-Judge Sotomayor's confirmation hearing, and again during General Kagan's hearing, I focused on the current Court's handling of business cases.

I am convinced, by education, experience, and inclination, that the integrity of our capital markets, along with our democratic traditions, is what makes America great.

Today, however, while we have a real need for significant financial regulatory reform, we also face a Supreme Court too prone to disregard congressional policy choices.

My concern is that a Court resistant to Federal Government involvement in and regulation of markets could undermine those efforts. I am not suggesting that we face a return to ``a New-Deal-era Court--a Court determined to strike down regulatory reform as beyond the authority of Congress.

But a Court predisposed against government regulation might chip away at the edges of reform, materially reducing its effectiveness.

That is why my questioning of Solicitor General Kagan focused on business cases and on her philosophy concerning deference to congressional judgment.

During the hearing, she emphasized the importance of ``judicial deference to the legislative process.'' She also acknowledged Congress's ``broad authority'' under the commerce clause to regulate the financial markets.

Finally, she stated emphatically her views on results-oriented judging. I really liked what she said on this point, so I'm going to quote it in full:

I think results-oriented judging is pretty much the worst

kind of judging there is. I mean the worst thing that you can

say about a judge is that he or she is results-oriented. It

suggests that a judge is kind of picking sides irrespective

of what the law requires, and that's the absolute antithesis

of what a judge should be doing, that the judge should be

trying to figure out as best she can what the law does

require, and not going in and saying, ``You know, I don't

really care about the law, you know, this side should win.''

So to be a results-oriented judge is the worst kind of judge

you can be.

Based on General Kagan's ability to communicate her thoughts and ideas during the committee hearings last month, I am confident that other Justices and, by extension, the entire Court, will benefit by the addition of her voice to their deliberations.

One of the aspirations of the American judicial system is that it render justice equally to ordinary citizens and to the most powerful.

We need Justices on the Supreme Court who not only understand that aspiration but also are committed to making it a reality. I believe Elena Kagan, through her truly impressive record of accomplishment, and through the entire confirmation process, has demonstrated that commitment.

In short, this nominee has all the qualities necessary to serve well all Americans, and the rule of law, on our Nation's highest court.

I urge my colleagues to confirm her without delay.

I suggest the absence of a quorum.