Floor Statements

Madam President, how much time do I have to discuss my amendment?

I thank my colleague from Texas and other Senators from border States who are deeply concerned about the issue of broken borders and the drug cartels and human smuggling that has put the lives and security of our American citizens in some danger.

A fact: The kidnapping capital of the world is Mexico City. The city that ranks second in kidnapping to Mexico City is Phoenix, AZ, which is a long way from the border. It happens to be a place where drop houses exist where people are held for ransom, where unspeakable cruelties are inflicted upon those who are being smuggled, where they have become a distribution center for drugs coming up through the so-called central corridor. We are badly in need of assistance.

Yesterday, May 26, 2010, 12:20 p.m.:

Sierra Vista, Ariz.--Acting on a tip, Sierra Vista police

went to a drop house and recovered close to 2,000 pounds of

marijuana Tuesday.

Police spokesman Sgt. Lawrence Boutte said officers found a

total of 83 bails weighing 2,054 pounds.

The marijuana has an estimated street value of $821,000.

Police arrested a 21-year-old Mexican citizen. Officers

said the man was expected to be charged with possession of

marijuana for sale. It's not known if the man was in the U.S.

illegally.

Boutte said drug smugglers use stash houses to store drugs

coming from Mexico before transporting them elsewhere.

``Elsewhere'' means different parts of the country.

By the way, there is an argument that this amendment may be unconstitutional. I remind my colleagues, the

Constitution--article I, section 8, clause 15--preserves to the Congress the power to call ``forth the Militia to execute the Laws of the Union,'' including the immigration laws. This is an independent constitutional power that does not rest on any power exercised by the President as the Chief Executive in article II.

A recent example of Congress's power to task the executive branch in this area, even outside calling forth the militia, is the Secure Fence Act of 2006 in which the Congress tasked the Secretary of Homeland Security to secure the border. Even though Congress was not relying on its article I, section 8, clause 15 power, the Secure Fence Act of 2006 was and is constitutional.

The President announced he was sending 1,200 National Guard to the southwest border. This is one-fifth of what is needed. If the Congress will not heed the call of the Governors of Arizona and Texas, who have asked the President to send troops to the border, the Congress should do so now.

During Operation Jump Start, the National Guard was deployed to the southwest border and provided logistical support, conducted surveillance, and built and repaired critical infrastructure. Until DHS has the technology and infrastructure in place to fully secure the border, at least 6,000 National Guard must be deployed to assist the Border Patrol in stopping the illegal immigration, drug smugglers, and human traffickers flowing across the border.

The borders are broken. There has been improvement. We have shown in San Diego, in Texas, even in the Yuma sector of Arizona that we can secure our border, but we need manpower, surveillance, and fences. We can do it. We have an obligation to our citizens to secure our border and allow them to lead lives where they do not live in fear of home invasions, of property being destroyed, where well-armed, well-equipped drug smugglers, as well as human smugglers, operate with--if not with impunity, certainly with great latitude.

There will be the statement made that the border is more secure. I am sure the Senator from New York will say that. The fact is the border is not secure. It is more secure; it is not secure. The citizens in the southern part of my State do not have a secure environment in which to live and raise their children.

Every enforcement agent on the border with whom I have talked says we need additional National Guard and we need it now. I am sure that in New York City and other major cities in America there is a secure environment, frankly, thanks to Mayor Giuliani. This is not the case in parts of my State, including Phoenix, AZ, having the dubious distinction of being No. 2 as far as the kidnapping capital of the world is concerned.

I appreciate the involvement of Senators from other parts of the United States of America. I invite them to come to the border and talk with my citizens. I invite them to talk with the Border Patrol agents who are overwhelmed in their task in trying to stop the flow of goods and human beings across our border. I hope they will weigh in on behalf of the human rights of the people who are being terribly abused, kept in drop houses, held for ransom, and subjected to unspeakable atrocities. It is another human rights argument for getting our border secure. We can get it more secure by sending these National Guard troops to the border, as former Governor and now Secretary of Homeland Security called for in 2006.

I urge a ``yea'' vote on this amendment.

I yield the floor.

(At the request of Mr. Reid, the following statement was ordered to be printed in the Record.)

I ask for the yeas and nays.

Mr. President, I ask unanimous consent to be included in the colloquy with the other Senator from Arizona and the Senator from Texas.

I will respond to the Senator from Texas, and I thank him. We who are from border States have perhaps a better understanding of the violence--the dramatically increased violence over the last several years. In the last 3 years, 22,000 Mexican citizens have been murdered in this struggle between the drug cartels and the Mexican Government. It is the worst kind of brutality: people being beheaded, bodies hanged from the overpasses. I think it was on the Mexican side of the Texas border the other day. There was a wedding--if the Senator recalls--and the drug cartel people went in and took the groom, the brother, and nephew out and murdered them. That brutality and violence, we all know, is spilling over the border. I believe three American citizens were murdered in Juarez--who were coming back from Juarez.

So the violence and the connection between human smuggling and drug cartels now is incredibly intertwined. They use the same routes, the same intelligence, the same sophisticated communications equipment. It is a threat to our security. That is why we Senators have asked for the Guard to be sent to the border.

What happened yesterday in what was clearly a PR stunt, the President announced 1,200 National Guard to the border. Now we find out they are going to do desk jobs. One of the things we have found out is that the presence of the uniformed Americans on the border has a significant effect on the drug cartels because the only threat they feel from Mexico is from the Mexican Army because of the terrible corruption that exists.

These people who have come across the Nogales border into Tucson and Phoenix have been distributed nationwide. People all over America are beginning to appreciate--according to the polling number the Senator from Texas pointed out--the American people are beginning to understand that our broken borders affect all of America. This violence is increasing, certainly, on that side of the border. The drug cartels make--the number I hear is as high as $65 billion a year. When I tell people we intercepted, in the Tucson sector alone, over 1.2 million pounds of marijuana, people don't believe it. When we tell them we intercepted 241,000 illegal immigrants--and we figure that 4 to 5 to 1 crossed our border to Tucson illegally--over 1 million people--what does the President do? He said he is going to send 1,200 troops to the border. We need 6,000. We need 3,000 for the border and 3,000 for the Arizona border. That is what we hear from the people who are enforcing the law.

This is a national security issue. It is something that all Americans are now more and more aware of and are supporting. I hope the administration and my colleagues on the other side of the aisle who also are being affected by this will understand we need to secure the borders first. Then we can work out an orderly system to address the results of our failure to secure the border.

I ask my friend and colleague from Arizona, what would happen if we enacted comprehensive reform and didn't secure the border?

I ask the Senator from Texas this: There is another important point. There is the belief that we can't secure our borders, that there is just going to be an unending flow of illegal immigrants into this country. I ask my friend from Texas, isn't it true that in at least parts of Texas, with the combination of surveillance, fencing, and proper staffing, there has been basically a secure border?

Mr. President, bringing the issue back to my home State of Arizona, I ask my friend, Senator Kyl, who has, along with me, traveled extensively to the southern part of our State, many of the residents of the southern part of our State, particularly those who are ranchers who live near the border, basically do not have a secure existence. They have people crossing their property illegally. They have home invasions. They have wildlife refuges on the border being trashed because of the overwhelming human traffic and the garbage and the items that are left behind. I have talked with ranchers' wives who said they could not leave their children at the bus stop.

I want to be very clear. Many of these illegal immigrants are just people who want to come and get a job. But the change over the last few years is that they are escorted by these coyotes who are also associated with the drug cartels who are amongst the most cruel and inhuman people in the world.

When people criticize the law in Arizona as being discriminatory, where is their concern for the individuals who are being escorted by these coyotes who inflict on them the worst abuses, terrible abuses? They bring them to Phoenix. Phoenix is the No. 2 kidnaping capital in the world. No. 1, Mexico City. No. 2, Phoenix, AZ. Can my colleagues understand why the people of Phoenix are upset?

They bring them to these drop houses, they jam them into these homes, and they hold them for ransom. Then once they get the money, sometimes they let them go, sometimes they ask for more money. In the meantime, they are suffering under the most inhumane conditions.

When the advocates for ``legal immigration'' are up, I say: Where is your compassion for the people who are being so terribly abused that the coyotes are bringing in the most inhumane fashion across our border and kept in the most inhumane fashions? Isn't that an argument to secure the border? Isn't that an argument to stop this human trafficking? They are unspeakable things. I will not on the floor of the Senate talk about some of the stories I have heard.

We have a situation in the southern part of our State where the residents are living in a state of, if not fear, certainly deep concern and insecurity. Then we have this terrible human trafficking tied to the drug traffickers who are committing the most terrible human rights abuses.

Mr. President, I will point out another aspect of this issue. We are proud in my home State of our Spanish heritage. Spanish was spoken before English was in the State of Arizona. We believe our culture and our life and our State have been enriched by the influx of Hispanic citizens. We want that to continue, but we want it to continue legally. In a broader sense, we want everyone in the world to have an opportunity to come to our country legally. If we did secure our border, then everybody has an equal opportunity, rather than it be by geography.

Let me point out something, of which I am not sure my colleagues are totally aware. The sophistication of these human smuggling rings and drug cartels is beyond description. They have the latest equipment. They have the latest communications. They have the latest weapons. They have a network of informers and a network, unfortunately, of corruption that is of the highest sophistication. Their operations are extremely sophisticated operations which are quite successful. But there are areas and measures that have been taken in certain parts of our border that show we can secure our border. What we need is the manpower, the technology, the assets, and the funding to get our borders secured.

The State of Arizona, unfortunately, has become a funnel for this illegal human trafficking and drug cartels to the point where it has threatened the security of its average citizens.

I hope my colleagues will understand this is a humanitarian issue. This is an issue that cries out for the compassion of all of us so that we can give everyone in the world an opportunity to come to this country, but also to give our citizens a chance to live lives of security that makes them able to enjoy the rights and privileges that American citizens everywhere should enjoy, even if they live on our southern border.

Mr. President, I say to my friend from Arizona, the situation of Secretary Napolitano, former Governor, whom I respect and admire enormously, is a classic example of it is not where you stand, it is where you sit because when Secretary Napalitano was Governor of Arizona, she made fervent pleas for reimbursement for the State of Arizona for our law enforcement problems dealing with immigration and for 3,000 additional Guard troops to be sent to the border.

Senator Kyl and I wrote a letter back on April 9 asking for a decision concerning troops to the border. We still have not received an answer. Perhaps what the President announced yesterday a half hour after discussing the issue with Senator Kyl and me and yet not mentioning that decision might be made to send 1,200 troops to the border--you have to laugh. It is in the spirit of bipartisanship. I hope in the case of our Secretary of Homeland Security that we could see some restoration of the same zeal she held as Governor of the State of Arizona to secure our borders and advocate for the necessary assets to achieve that goal.

I think 3,000. I know we are taking a lot of my colleagues' time. I ask my colleagues and the American people to understand what we are facing in Arizona. I ask the American people and my colleagues to understand the frustration that the Governor and the legislature of Arizona felt about the conditions we have tried to describe on the floor of the Senate that exist, that cry out for Federal intervention, that they did not receive that assistance from the Federal Government so, therefore, they acted.

That law, by the way, upon examination certainly does not call for racial profiling. In fact, it expressly prohibits it. I would urge my colleagues to read the law. I have a copy and would be glad to provide them a copy of it.

But I hope my colleagues and the American people understand the reason why the legislature acted, the reason why we are here on the floor today asking for additional assistance is because of the plight of human beings, both the residents of my State who are there legally, whose security is being threatened, in some cases on a daily basis-- those who live in the southern part of our State--and also for those individuals who are being transported across our border by these cruel coyotes and who are being terribly mistreated. There are human rights violations of the most terrible kind.

I hope we can all come together, recognizing this is a serious problem. It is not just a problem for Arizona, it is a problem for the Nation. We have a requirement to secure our borders. That is the obligation of every Nation. We happen to be, unfortunately, the State that suffers the most because of these insecure borders, but this spreads throughout the country. The drugs don't stop in Arizona; they go all over the country. The individuals who are smuggled in, all of them don't stop in Arizona; they go all over the country.

We need to help the Government of Mexico in their struggle against these drug cartels, but we also have to take the measure--which can probably help the Mexican Government as much as anything else--of getting our border secured. I want to assure my colleagues that those of us from border States, once we get our border secured, stand ready to address these other issues that need to be addressed. But if we don't get our border secured, a year, 2 years, 10 years from now we are going to be faced with the same problem over and over with a population of people who have come to our country illegally.

I ask not only for the votes of my colleagues on these amendments, but I ask for their compassion and understanding about a human rights situation that cries out for us to address as Christians and as individuals who are motivated by Judeo-Christian principles.

Mr. President, I thank my colleagues, and I yield the floor.

I would say to the distinguished chairman, if there is a unanimous consent agreement concluded, I would be more than happy to be interrupted. I know that business in the Senate needs to proceed. I am proud to be joining forces with my colleague from Oklahoma, Dr. Coburn, to insist that we stop burdening our children and our grandchildren with massive debt.

We have before us today a supplemental appropriations bill totaling nearly $60 billion, most of it not paid for, simply being added to the ever growing debt, to be paid for by future generations of Americans.

If we are serious about our commitment to reduce our debt and eliminate our deficit, then Congress needs to start making some tough decisions about our national priorities and we need to start now.

Dr. Coburn is seeking a vote on one of two reasonable amendments, both of which would fully offset the cost of this bill. Yesterday, Dr. Coburn very eloquently laid out his reasons for offering those two amendments. Essentially our fiscal situation is extremely perilous and we can no longer afford to approve any new Federal funding without eliminating wasteful and unnecessary spending in other areas.

Mr. President, a kind of bizarre thing happened yesterday. In the middle of his speech and his argument before the Senate, Dr. Coburn yielded the floor to the majority leader who proceeded to file cloture on this bill after only 1 day of floor consideration and not a single vote on any amendment. So on a $60 billion bill, most of it not paid for, we are now going to, without a single amendment having been voted on, be voting on a bill, in fact, that will not be paid for. As my colleagues know quite well, the editorial page of the Washington Post is by no means a conservative, right-leaning, penny-pinching bunch, but even they are perplexed about what we are doing here. Yesterday, in an editorial entitled ``Congress as Usual: There's an election coming. Time to spend,'' the Post wrote:

All across the Western world, fiscal stimulus is starting

to give way to fiscal consolidation. In London, the new

British government has announced $8.6 billion in immediate

budget cuts. In Paris, French President Nicolas Sarkozy is

negotiating to raise that country's retirement age. In

Madrid, Spanish civil servants are facing a 5 percent pay

cut, followed by a wage freeze. Even Italy is talking about

tightening spending. And don't get us started on Greece.

Only in Washington, it seems, is the long awaited ``pivot''

to fiscal restraint nowhere to be seen. As the mid-term

elections draw near, Congress is considering a passel of new

spending, necessary and otherwise, most of which won't be

paid for.

Sadly, the Washington Post hit the nail on the head and the bill before us is the perfect example of Congress's inability to deal with the very serious fiscal realities that are facing this Nation.

Under this supplemental, DOD receives $33.7 billion for operations in Afghanistan, Iraq, and Haiti. The bulk of this money, $24.6 billion, is for operations and maintenance, and much needed other funding. The remainder of the DOD funding is for military personnel costs and other equipment.

Some say the fiscally responsible way to pay for our war costs is to increases taxes. We disagree. The American people, particularly our soldiers and their families, are sacrificing enough already. It is time for Congress to start making some sacrifices and forgo the earmarks and other special deals to help provide our troops with the support and equipment they need.

The first amendment of Dr. Coburn saves taxpayers $59.6 billion by doing the following: freezing raises, bonuses, and salary increases for Federal employees for 1 year; collecting unpaid taxes from Federal employees, $3 billion; reducing printing and publishing costs of government documents, $4.4 billion over 10 years; reducing excessive duplication, overhead, and spending within the Federal Government, $20 billion; eliminating nonessential government travel, $10 billion over 10 years; eliminating bonuses for poor performance by government contractors, $8 billion over 10 years; repealing the Energy Star Program, $627 million over 10 years; eliminating an increase in foreign aid for international organizations, $68 million; limiting voluntary payments to the United Nations, $10 billion over 10 years; striking unnecessary appropriations for salaries and expenses of a government commission Congress ignored, the Financial Crisis Inquiry Commission, 1.8 million; rescinding a State Department training facility that was not requested by the community where it is to be constructed, $500 million.

On the second amendment we can save taxpayers $60 billion by cutting budgets of Members of Congress, by disposing of unneeded, unused government property, auctioning and selling unused and unneeded equipment, rescinding unspent and uncommitted Federal funds, $45 billion.

We have ways we can cut spending. We have ways we can reduce the government, in the first amendment, by nearly $60 billion, and in the other one by $60 billion.

In a letter to Speaker Pelosi in April of last year, President Obama wrote:

As I noted when I first introduced my budget in February,

this is the last planned war supplemental. Since September

2001, the Congress has passed 17 separate emergency funding

bills totaling $822.1 billion for the wars in Iraq and

Afghanistan. After 7 years of war, the American people

deserve an honest accounting of the cost of our involvement

in our ongoing military operations.

Quoting from the President's letter of April of last year:

We must break that recent tradition and include future

military costs in the regular budget so that we have an

honest, more accurate, and fiscally responsible estimate of

Federal spending. And we should not label military costs as

emergency funds so as to avoid our responsibility to abide by

the spending limits set forth by the Congress.

The President emphasized, again quoting from his letter to the Speaker of the House:

After years of budget gimmicks and wasteful spending, it is

time to end the era of irresponsibility in Washington.

I could not agree more. That is why I am disappointed to see yet another supplemental spending bill designated as an emergency without offsets. Dr. Coburn and I agree with what the President said last year. ``After years of budget gimmicks and wasteful spending, it is time to end the era of irresponsibility in Washington.'' That is precisely what we are seeking to do with these two amendments.

In the past 2 years, America has faced her greatest fiscal challenges since the Great Depression. When the financial markets collapsed, it was the American taxpayer who came to the rescue of the banks and the big Wall Street firms. But who has come to the

rescue of the American taxpayer? Certainly not Congress.

So what has Congress done? By enacting inexplicable policies that can only be described as generational theft, we have saddled future generations with literally trillions of dollars of debt. Since January of 2009, we have been on a spending binge the likes of which this Nation has never seen. In that time, our debt has grown by over $2 trillion. We passed a $1.1 trillion stimulus bill.

Remember the assurance that unemployment would be at a maximum of 8 percent? Now it is 9.9. We passed a $2.5 trillion health care bill. The American people are still angry about that. The President submitted a budget for next year totaling $3.8 trillion. We now have a deficit of over $1.4 trillion, and we just passed, a week or so ago, the $13 trillion debt mark which amounts to more than $42,000 owed by every man, woman, and child in America.

This year the government will spend more than $3.6 trillion and will borrow 41 cents for every $1 it spends. Unemployment remains at 9.9 percent and, according to forbes.com, a record 2.8 million American households were threatened with foreclosure last year. That number is expected to rise to well over 3 million homes this year. With this bill, we are poised to tack another $60 billion onto the tab.

I travel a lot around my State. I know all of my colleagues do. Every place I go I meet county supervisors, city councilmen, mayors, elected officials from all over the State. I talk to the Governor, the legislature. They make tough decisions. The city of Phoenix had to cut its budget by some 30 percent last year, a very tough decision. Meanwhile, we increased domestic spending by 20 percent. What is the difference between the city of Phoenix and us in the Capitol? We print money. A debt of $1.4 trillion this year, estimated to be $1.5 trillion this year, how can we continue this?

These two amendments by Dr. Coburn can achieve a significant savings, $60 billion in each. That is $120 billion that both of these amendments could save the taxpayers. Wouldn't it be wonderful to show the taxpayers that maybe we are going to do something like cutting the budget, cutting our budgets? Wouldn't it be nice to tell the American people we are going to eliminate nonessential government travel? Couldn't we at least freeze bonuses?

We have an opportunity to show the American people we are going to tighten our belts a little bit, too; that we care about generational theft; that we care about future generations of Americans. I know some of these measures will not be popular, but Dr. Coburn has never been one who has tried to win a popularity contest. What Dr. Coburn has tried to do is steer the American people on a path to some kind of fiscal solvency so we can stop this terrible generational theft we are committing.

The greatness of America, certainly one of her greatest attributes, is we have handed on to every generation a better one than the one they had before them. That has been the great wonder and beauty of America. With these kinds of debts and deficits, what can we pass on to our children and grandchildren?

I applaud Senator Coburn not only for this effort but many of the other efforts he has made. I am pleased to join him. I hope my colleagues will understand that the American people are angry and frustrated. Look at the latest polling numbers--we do read polls. Do you want to reelect your Member of Congress? What is our approval rating? It is 14, 13, 12 percent. We are down to blood relatives and paid staffers. The point is, let's send a message to the American people we are serious.

Yes, there are tough decisions and tough things that are embodied in this legislation. I urge my colleagues to at least take a look at them and consider putting this Congress and this Nation on a different path.

I yield the floor.

Mr. President, may I engage in a colloquy with my friend from Wyoming for 1 minute?

I understand the Senator from Illinois was talking about Arizona and the border. I wonder if the Senator from Illinois has ever been to the Arizona border. He has?

Yes.

It is pronounced Nogales.

And I have been there many times. It is obvious the Senator from Illinois, even though he has been there, has no conception of what the people who live in southern Arizona are suffering under with hundreds of thousands of illegal immigrants and human smugglers and drug smuggling going through our State.

I am glad he is such an expert--he and the Senator from New Jersey-- on the issue of the terrible problems that afflict our State and our need to try to get our borders secure, which every citizen has the right to expect.

I thank my colleague for yielding.

Tribute to Shawn Whitman

I have a parliamentary inquiry.

What is the parliamentary situation at the moment?

I understand the Senator from Louisiana wants to speak and then the Senator from Wisconsin. I ask unanimous consent that following the Senator from Louisiana, following the Senator from Wisconsin, that I be put in line to speak for purposes of offering an amendment.

I amend my unanimous-consent request that the Senator from Louisiana, followed by the Senator from Wisconsin, followed by me, followed by the Senator from Texas, all to speak, and if the Senator from Hawaii agrees, for purposes of proposing amendments which requires setting aside the pending amendment.

Madam President, I ask unanimous consent that the pending amendment be set aside and call up amendment No. 4214. And I thank the distinguished managers of the bill.

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

Madam President, the amendment would fund the immediate deployment of 6,000 National Guard troops to the U.S.-Mexico border to provide additional security since the situation on the border has greatly deteriorated during the last 18 months. The National Guard troops would remain on the border until the Secretary of Defense, in consultation with the Governors of Arizona, California, New Mexico, and Texas, determines that the Federal Government has achieved ``operational control'' of the border.

Since I put this amendment together, we have been informed that the President will be asking for an additional $500 million to support border security and up to 1,200 National Guard to be sent to the border. I appreciate that. I think it is a recognition of the violence on the border which has been really beyond description in some respects, particularly on the Mexico side.

I appreciate the additional 1,200 Guard being sent, as well as an additional $500 million, but it is simply not enough. We need 6,000. We need 3,000 across the border and an additional 3,000 National Guard troops on the Arizona-Mexico border. I say that because of my many visits to the border, my conversations with the Border Patrol, and the time it will take to train an additional 3,000 troops just for the Arizona-Mexico border.

I have colleagues waiting with other amendments, but I hope my colleagues appreciate the extent of the violence on the Mexican border and the dramatic increase in that violence that has taken place over the last several years. There was a time not that long ago that someone who wanted to come across our border illegally could do so if they were fortunate and would come across by themselves. That is no longer possible. We now have highly organized human smuggling rings and drug cartels that are working together. They are using the same routes, and unfortunately the so-called central corridor, the Arizona-Mexico border, has been where a great degree of violence and certainly a preponderance or a majority of human smuggling and drug smuggling has taken place.

I would refer two numbers to my colleagues. Last year, in the Tucson sector of the Arizona-Mexico border, there were over 1.2 million pounds of marijuana intercepted on that border, to the point where I was told that the U.S. attorney didn't prosecute anything less than 500 pounds of marijuana intercepted. One other number: Last year on the Tucson sector of the Arizona-Mexico border, 241,000 illegal immigrants were apprehended trying to cross the Mexico-Arizona border. If you figure we catch one out of four, one out of five illegal immigrants who are coming across, that is about a million people, a million illegal immigrants coming across the Tucson sector, destroying people's property, destroying our wildlife refuges, and causing an environment of total insecurity amongst the citizens who live in the southern part of my State.

I understand the controversy associated with the legislation that was passed by the Arizona Legislature and signed by the Governor. By the way, that legislation is less severe than Federal law--certainly nothing like the Mexican law regarding treatment of illegal immigrants--and it has been badly mischaracterized by administration officials who have admitted they haven't even read the bill. But the important aspect here is that I support that legislation because the Arizona Governor and Legislature acted in frustration because of the Federal Government's failure to carry out its responsibilities to secure our border.

Again, 1.2 million pounds of marijuana, 241,000 illegal immigrants, and then the situation is compounded by the incredible violence--22,000 Mexican citizens have been murdered on the Mexican side of the border in the last 3 years in the struggle between the Mexican Government and the drug cartels. It was predicted by many of us, as we saw this violence increase, that sooner or later it was going to spill over the border or affect American citizens. Three American citizens were killed on the Mexican side of the border as they made their way home to the United States. In March, a third-generation Arizona rancher was found dead on his property near the Mexican border, reportedly shot by a suspect who may have illegally entered our country. So the point is, this violence is at such a level that it makes a compelling argument for us to secure our border.

I understand the liberal media and the mainstream media who have talked about our situation in Arizona. Most of them have never been within about 100 miles of the border. But the point is that the citizens in my State deserve the right to live a secure existence--not to be threatened, not to have their property overrun, not to have their homes broken into. A mother came to me at a townhall meeting and said: I am afraid to drop my children off at the school bus stop.

This violence on the border is unspeakable. It is one of the least reported aspects of this whole issue, and I still am puzzled as to why. People are beheaded and their bodies hung at the overpass in Tijuana. A wedding took place not long ago, and the drug people came in and took the groom, his brother, and a nephew, and their bodies were found a few hours later. A young man who was part of the capture of one of these drug lords was lionized by the Mexican Government, and his whole family was murdered. This is a degree of brutality that threatens the very existence of the Mexican Government.

I am proud we are working with the Mexican Government. I hope all of our colleagues understand we have spent over $1 billion. The corruption level that exists in Mexico today reaches to the highest levels of government. So really the only institution the government can rely on is the army.

When we send the Guard to the border, we are told the presence of the Guard has an effect on these drug cartels. By the way, the drug cartels are watching everything on the border. They have the most sophisticated communications. They have sophisticated intelligence capability, and they are very efficient in their organization. So the Guard troops on the border in the past have had a very salutary effect. That is why we need 6,000 of them until such time as we can train additional Border Patrol and customs people to address this issue.

So I wish to emphasize to my colleagues that we should not forget, to start with, that it is the United States of America that is creating the demand for these drugs, and at some point we have to address that issue too. But in the meantime, this violence that is taking place in Mexico on the Mexican side of the border, which has spilled over on our side, can only get worse until these drug cartels are brought under control and the human smugglers are brought under control, and that will only take place when our border is secure.

We can secure the border. The Yuma sector, as my colleague from Arizona has pointed out, has taken measures, including incarceration of illegal immigrants, including increased fencing and surveillance. By the way, UAVs are a very important part of this equation. So we have been able to drastically reduce the illegal activity, both drug and human smuggling, in the Yuma sector of the border. My colleague from Texas will testify that in, I believe it is the McAllen sector of Texas, there has been significant and dramatic improvement. In San Diego, there is dramatic improvement. So those who feel we can't secure our border, there are great examples of our ability to do so with people, with fences, and with technology. We can do these things.

We have to get an additional 6,000 troops to the border before there are more tragedies such as happened with Rob Prince, the rancher from Arizona, or the deputy all the way up in Pinal County, some 50 miles from the border, who was shot in the stomach, in pursuit of one of these drug people, with an AK-47.

So I urge my colleagues and I urge all Americans to understand that we in Arizona didn't want to have this law passed by the legislature. It was done out of frustration because of the Federal Government's failure to exercise its responsibility. It is a Federal responsibility, something that the Secretary of Homeland Security emphasized in a letter, when she was Governor of the State of Arizona, on March 11, 2008. It says: Clearly, Operation Jump Start has been highly effective--on and on about how important the help in insuring the border and bringing the Guard to the border has been. That is true today.

So the Arizona Legislature and Governor did not wish to pass this legislation. It was enacted because the people of Arizona had an insecure border and live, in many cases, in an insecure environment. An obligation we have to all of our citizens is to allow them to live in a secure environment.

By the way, this law the Arizona Legislature passed is far less severe in many respects than the Federal law and certainly far different from the law in Mexico, which is very stringent in its provisions and penalties for illegal immigration.

So we need relief in our State. We need relief in many places across the border. The drug cartels have to be stopped. Working with Mexico, I believe we can, over time, bring the border under control and rid the scourge of these drug cartels and these human smugglers.

Let me finally say, because I know my colleagues are waiting, that the treatment of human beings by these coyotes, these human smugglers, is atrocious, unspeakable. They take them and they pack them into-- well, the other day, a U-Haul rental truck was apprehended. Sixty-seven human beings were packed inside. They take them to these drop houses. They hold them for ransom, and then after they are ransomed, sometimes they mistreat them even further. The human rights abuses that are taking place in these human smuggling rings is atrocious beyond description. That alone should compel us to get our borders secure and to provide for a legal system of immigration into our country.

We welcome immigrants. We welcome our Hispanic heritage. We cherish it. Spanish was spoken in our State of Arizona before English. But we have to get the human smuggling and drug cartels under control because the security of our citizens and our Nation depends on it. So I urge my colleagues to support the amendment.

I yield the floor.

Madam President, I reserve the right to object too. I have been here a long time. That is the first time I have seen that from the Senator from New Jersey. If that is the way we are going to do business here, this place will grind to a halt. I think it is discourteous of the Senator from New Jersey to do that. This place exists and runs mostly on comity. I hope that does not become a practice here or it will be practiced on this side as well.

Mr. President, it is with regret that I come to the floor to announce my opposition to this piece of legislation. I express regret not because this is somehow a good bill with a few flaws serious enough to warrant a no vote--I express regret because this bill is an abysmal failure and serves as yet another example of Congress' inability to tackle tough problems and institute real, meaningful and comprehensive reform.

In the past 2 years America has faced her greatest fiscal challenges since the Great Depression. When the financial markets collapsed it was the American taxpayer who came to the rescue of the banks and big Wall Street firms--but who has come to the rescue of the American taxpayer? Certainly not Congress. So what has Congress done? By enacting policies that can only be described as inexplicable generational theft--we've saddled future generations with literally trillions of dollars of debt. Since January of 2009 we have been on a spending binge the likes of which this nation has never seen. In that time our debt has grown by $2 trillion. We passed a $1.1 trillion ``stimulus'' bill. We spent $83 billion to bail out the domestic auto industry. We passed a $2.5 trillion health care bill. The President submitted a budget for next year totaling $3.8 trillion. We now have a deficit of over $1.4 trillion and a debt of over $12.9 trillion. Unemployment remains at almost 10 percent. And, according to Forbes.com, a record 2.8 million American households were threatened with foreclosure last year, and that number is expected to rise to well over 3 million homes this year. And how has the Senate responded to this crisis of staggering debt, catastrophic job loss and unimaginable foreclosure rates? Did the majority take on the special interests? Did they seize the opportunity to develop a bill that goes right to the heart of the problem and make serious, meaningful and comprehensive reforms? Nope. They punted. Out of pure political expediency, they shrugged their shoulders and kicked the can down the road and left the tough decisions for an unluckier group of Americans.

It is clear to any rational observer that the housing market has been the catalyst of our current economic turmoil. And it is impossible to ignore the significant role played by the government-sponsored enterprises--GSEs--Fannie Mae and Freddie Mac. The events of the past two years have made it clear that never again can we allow the taxpayer to be responsible for poorly-managed financial entities who gambled away billions of dollars. Fannie Mae and Freddie Mac are synonymous with mismanagement and waste and have become the face of `too big to fail'.

A May 6th editorial in the Wall Street Journal stated:

Fan and Fred owned or guaranteed $5 trillion in mortgages

and mortgage-backed securities when they collapsed in

September 2008. Reforming the financial system without fixing

Fannie and Freddie is like declaring a war on terror and

ignoring al Qaeda.

Unreformed, they are sure to kill taxpayers again. Only

yesterday, Freddie said it lost $8 billion in the first

quarter, requested another $10.6 billion from Uncle Sam, and

warned that it would need more in the future. This comes on

top of the $126.9 billion that Fan and Fred had already lost

through the end of 2009. The duo are by far the biggest

losers of the entire financial panic--bigger than AIG,

Citigroup and the rest.

From the 2008 meltdown through 2020, the toxic twins will

cost taxpayers close to $380 billion, according to the

Congressional Budget Office's cautious estimate. The Obama

Administration won't even put the companies on budget for

fear of the deficit impact, but it realizes the problem

because last Christmas Eve it raised the $400 billion cap on

their potential taxpayer losses to . . . infinity.

Moreover, these taxpayer losses understate the financial

destruction wrought by Fan and Fred. By concealing how much

they were gambling on risky subprime and Alt-A mortgages, the

companies sent bogus signals on the size of these markets and

distorted decision-making throughout the system. Their

implicit government guarantee also let them sell mortgage-

backed securities around the world, attracting capital to

U.S. housing and thus turbocharging the mania.

During the debate on this financial reform bill, we heard much about how the U.S. Government will never again allow a financial institution to become too big to fail. We heard countless calls for more regulation to ensure that taxpayers are never again placed at such tremendous risk. Sadly, the bill before us now completely ignores the elephant in the room--because no other entities' failure would be as disastrous to our economy as Fannie Mae's and Freddie Mac's. Yet the majority chose not to address them at all in the bill before us.

There have been numerous warnings about the mismanagement of both Fannie and Freddie over the years. In May of 2006, after a 27 month investigation into the corrupt corporate culture and accounting practices at Fannie Mae, the Office of Federal Housing Enterprise Oversight--OFHEO--the Federal regulator charged with overseeing Fannie Mae--issued a blistering, 348-page report which highlighted the culture of corruption which was rampant at Fannie Mae. The report stated things such as:

Fannie Mae senior management promoted an image of the

Enterprise as one of the lowest-risk financial institutions

in the world and as ``best in class'' in terms of risk

management, financial reporting, internal control, and

corporate governance. The findings in this report show that

risks at Fannie Mae were greatly understated and that the

image was false.

During the period covered by this report--1998 to mid-

2004--Fannie Mae reported extremely smooth profit growth and

hit announced targets for earnings per share precisely each

quarter. Those achievements

were illusions deliberately and systematically created by the

Enterprise's senior management with the aid of inappropriate

accounting and improper earnings management.

A large number of Fannie Mae's accounting policies and

practices did not comply with Generally Accepted Accounting

Principles (GAAP). The Enterprise also had serious problems

of internal control, financial reporting, and corporate

governance. Those errors resulted in Fannie Mae overstating

reported income and capital by a currently estimated $10.6

billion.

By deliberately and intentionally manipulating accounting

to hit earnings targets, senior management maximized the

bonuses and other executive compensation they received, at

the expense of shareholders. Earnings management made a

significant contribution to the compensation of Fannie Mae

Chairman and CEO Franklin Raines, which totaled over $90

million from 1998 through 2003. Of that total, over $52

million was directly tied to achieving earnings per share

targets.

Fannie Mae consistently took a significant amount of

interest rate risk and, when interest rates fell in 2002,

incurred billions of dollars in economic losses. The

Enterprise also had large operational and reputational risk

exposures.

Fannie Mae's Board of Directors contributed to those

problems by failing to be sufficiently informed and to act

independently of its chairman, Franklin Raines, and other

senior executives; by failing to exercise the requisite

oversight over the Enterprise's operations; and by failing to

discover or ensure the correction of a wide variety of unsafe

and unsound practices.

Fannie Mae senior management sought to interfere with

OFHEO's special examination by directing the Enterprise's

lobbyists to use their ties to Congressional staff to (1)

generate a Congressional request for the Inspector General of

the Department of Housing and Urban Development (HUD) to

investigate OFHEO's conduct of that examination and (2)

insert into an appropriations bill language that would reduce

the agency's appropriations until the Director of OFHEO was

replaced.

So what steps were taken by the Congress to punish Fannie Mae for such deliberate manipulation and outright corruption at that time? Basically: none. And nothing is done to rein them in under this bill either.

Just this morning the Heritage Foundation wrote the following:

There is still nothing in this bill that addresses the

perverse incentives and moral hazard that is created when the

federal government sticks its nose into the housing market.

Last year, the two financed or backed about 70 percent of

single-family mortgage loans. They hold about $5 trillion in

their investment portfolios. Both are losing money fast, with

those losses being covered by the U.S. taxpayer. Last month,

Freddie announced it had lost $8 billion in the first quarter

of 2010 and would be asking for another $10.6 billion in

taxpayer help. Not to be outdone, Fannie announced an $11.5

billion loss and asked for another $8.4 billion from

taxpayers. That's atop the nearly $145 billion of your

dollars that Fannie and Freddie have already received. Fannie

and Freddie alone prove this bill does nothing to end ``too

big to fail.'' Fannie and Freddie should be partly wound

down, the rest broken up and sold off--not replaced,

reformed, or rejuvenated. The Dodd bill does none of that.

As my colleagues know, I offered a good, common-sense amendment designed to end the taxpayer-backed conservatorship of Fannie Mae and Freddie Mac by putting in place an orderly transition period and eventually requiring them to operate--without government subsidies--on a level playing field with their private sector competitors. Unfortunately that amendment was defeated by a near-party-line vote.

The majority, however, did offer an alternative proposal to my amendment. Was it a good, well thought out, comprehensive plan to end the taxpayer-backed free ride of Fannie and Freddie and require them to operate on a level playing field with their private sector competitors? Nope. It was a study. The majority included language in this bill to study the problem of Fannie and Freddie for six months. Wow! Instead of dealing head-on with the two enterprises that brought our entire economy to its knees--entities which have already cost taxpayers over $145 billion in bailouts--the Democrats want to study them for 6 more months. It is no wonder the American people view us with such contempt.

Additionally, I cosponsored an amendment with my colleague from Washington, Senator Cantwell, to ensure that we never again stick the American taxpayer with another $700 billion-plus tab to bailout the financial industry. If big Wall Street institutions want to take part in risky transactions--fine. But we should not allow them to do so with federally insured deposits.

Paul Volcker, a top economist in the Obama administration and former Federal Reserve Chairman, wants the nation's banks to be prohibited from owning and trading risky securities, the very practice that got the biggest ones into deep trouble in 2008. Mr. Volcker argues that regulation by itself will not work. Sooner or later, the giants, in pursuit of profits, will get into trouble. Congress and the administration should accept this and shield commercial banking from Wall Street's wild ways. ``The banks are there to serve the public,'' Mr. Volcker said, ``and that is what they should concentrate on. These other activities create conflicts of interest. They create risks, and if you try to control the risks with supervision, that just creates friction and difficulties'' and ultimately fails.

The amendment we offered precluded any member bank of the Federal Reserve System from being affiliated with any entity or organization that is engaged principally in the issue, flotation, underwriting, public sale or distribution of stocks, bonds or other securities. Essentially, commercial banks may no longer inter-mingle their business activities with investment banks. It is that simple.

Since the repeal of the Glass-Steagall Act in 1999, this country has seen a new culture emerge in the financial industry: one of dangerous greed and excessive risk-taking. Commercial banks traditionally used people's deposits for the constructive purpose of main street loans. They did not engage in high risk ventures. Investment banks, however, managed rich people's money--those who can afford to take bigger risks in order to get a bigger return, and who bore their own losses. When these two worlds collided, the investment bank culture prevailed, cutting off the credit lifeblood of Main Street firms, demanding greater returns that were achievable only through high leverage and huge risk taking, and leaving taxpayers with the fallout.

When the glass wall dividing banks and securities firms was shattered, common sense and caution went out the door. The new mantra of ``bigger is better'' took over--and the path forward focused on short-term gains rather than long-term planning. Banks became overleveraged in their haste to keep up in the race. The more they lent, the more they made. Aggressive mortgages were underwritten for unqualified individuals who became homeowners saddled with loans they couldn't afford. Banks turned right around and bought portfolios of these shaky loans.

Sub-prime loans made up only 5 percent of all mortgage lending in 1998, but by the time the financial crisis peaked in late 2008, they were approaching 30 percent. Since January 2008, we have seen 264 state and national banks fail. In my home State of Arizona, eight banks have shut their doors, leaving small businesses scrambling to find credit from other banks that may have already been overleveraged.

Banks sold sub-prime mortgages to their affiliates and other securities firms for securitization, while other financial institutions made risky bets on these and other assets for which they had no financial interest. As the market grew bigger, its foundation became shakier. It was like a house of cards waiting to fall. And fall it did.

In October 2008, the financial system was on the brink of collapse when Congress was forced to risk $700 billion of taxpayer dollars to bailout the industry. These financial institutions had become too big to fail. In fact, the special inspector general of Troubled Asset Relief Program--TARP--testified before Congress last year that ``total potential Federal Government support could reach $23.7 trillion'' to stabilize and support the financial system. Ironically, some of these ``too big to fail'' institutions have now become even bigger. A recent editorial from the New York Times stated:

The truth is that the taxpayers are still very much on the

hook for a banking system that is shaping up to be much

riskier than the one that led to disaster.

Big bank profits, for instance, still come mostly courtesy

of taxpayers. Their trading earnings are financed by more

than a trillion dollars' worth of cheap loans from the

Federal Reserve, for which some of their most noxious assets

are collateral. They benefit from immense federal loan

guarantees, but they are not lending much. Lending to

business, notably, is very tight.

What profits the banks make come mostly from trading. Many

big banks are happy to depend on the lifeline from the Fed

and hang onto their toxic assets hoping for a rebound in

prices. And the whole system has grown more concentrated.

Bank of America was considered too big to fail before the

meltdown. Since then, it has acquired Merrill Lynch. Wells

Fargo took over Wachovia. And JPMorgan Chase gobbled up Bear

Stearns.

If the goal is to reduce the number of huge banks that

taxpayers must rescue at any cost, the nation is moving in

the wrong direction. The growth of the biggest banks ensures

that the next bailout will have to be even bigger. These

banks will be more likely to take on excessive risk because

they have the implicit assurance of rescue.

The Federal Government has set a dangerous precedent here. We sent the wrong message to the financial industry: you engage in bad, risky business practices, and when you get into trouble, the government will be there to save your hide. It amounts to nothing more than a taxpayer- funded subsidy for risky behavior.

The consolidation of the banking world was also riddled with conflicts of interest, despite the purported firewalls that were put into place. If an investment bank had underwritten shares for a company that was now in financial trouble, the investment bank's commercial arm would feel pressure to lend the company money, despite the lack of merits to do so. This amendment would have eliminated some of these conflicts.

It is time to put a stop to the taxpayer financed excesses of Wall Street. No single financial institution should be so big that its failure would bring ruin to our economy and destroy millions of American jobs. This country would be better served if we limit the activities of these financial institutions. Banks should accept consumer deposits and invest conservatively, while investment banks engage in underwriting and sales of securities.

In an op-ed titled ``Bring Back Glass-Steagall,'' Wall Street Journal columnist Thomas Frank summed up the situation very nicely recently when he wrote:

One of these days, we will finally dispel the `New Economy'

mysticism that beclouds this issue and begin to think

seriously about how to re-regulate the financial sector. And

when we do, we may find the answer involves some version of

the idea behind Glass-Steagall--drawing a line between banks

that the government effectively guarantees and banks that

behave like big hedge funds, experimenting with the latest

financial toxins. Hopefully, that day will come before Wall

Street decides to take another headlong run at some

attractive cliff.

Unfortunately, our amendment was defeated by a procedural motion and was not even brought up for a vote.

Again, I regret that I have to vote against this bill. I assure my colleagues, and the American people, that if this were truly a bill that instituted real, serious and effective reforms--I would be the first in line to cast a vote in its favor. But it is not. It serves as evidence of a dereliction of our duty and a missed opportunity to provide the American people with the protections necessary to avert yet another financial disaster. They deserve better from us.

Mr. President, I call up amendment No. 3839 and ask for its immediate consideration and ask to set aside pending amendments.

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

Mr. President, before we continue, I know the distinguished chairman of the Banking Committee and the manager of the bill want us to move forward. I understand that. As we speak, I am compiling a list of those who want to speak on the amendment on this side. I assure him we will try to get a time agreement completed as soon as possible. I ask my colleagues on this side of the aisle who want to speak on this amendment to call the cloakroom so we can get that done.

Mr. President, I ask unanimous consent that Senators Burr, Hutchison, and Roberts be added as cosponsors of this amendment.

Mr. President, I apologize to my colleagues for giving them false information a couple of days ago. It is not $125.9 billion that we are now pouring into Fannie and Freddie; it is up to $145 billion that is now being poured in--$145 billion. I remind my colleagues again that last Christmas Eve at 7 p.m. was when the Treasury Department decided to lift the cap, which had been at $400 billion. It is now up--$145 billion. Here we are addressing financial regulatory reform and not looking at $5 trillion of toxic assets that have already spent $145 billion off budget. It is off budget. Incredible.

My distinguished friend from Connecticut pointed out yesterday--he says I want a little revisionist history. He says the House financial committee passed bipartisan legislation. It stalled in the committee over here despite the support for it. The Republican-controlled committee then passed a bill and never filed it, never brought it up for a vote here on the floor of the Senate in 2005. That was my friend Senator Dodd's statement yesterday.

The fact is--a little revisionist history--on April 1, 2004, the Senate Banking Committee passed the bill, the Federal Housing Enterprise Regulatory Reform Act. All 12 Republicans voted for it. All Democrats, including the distinguished chairman, voted against it, according to the Record. So neither bill was taken on the floor because, as we know, we don't move forward with legislation if it is blocked by the other side.

Then Senator Dodd went on to say: I became chairman of the Banking Committee in 2007. We arrived at 2008. We had a significant number of hearings. In the summer of 2008, the Banking Committee passed a comprehensive bill--et cetera, et cetera. The Housing and Economic Recovery Act was finally enacted on July 30, 2008. Just 39 days later, Fannie Mae and Freddie Mac were placed into conservatorship.

I remind Senator Dodd that back in 2006, there was a group of us, in response to an inspector general's report, who said we need to fix it and fix it now, and that was blocked by the other side.

Senator Dodd said: If you think the market took a plunge last Thursday, adopt the McCain amendment. It is a reckless amendment.

What is reckless is the status quo. What is reckless is to totally ignore $5 trillion in toxic assets, already $145 billion of the taxpayers' money being spent. It is reckless for us to go to the American people and say we are fixing the problem that caused the financial meltdown and yet we are ignoring Fannie and Freddie. We are ignoring the trillions of dollars of toxic assets. And don't worry, we will address it later on. That is what the distinguished chairman is going to say--we will address this later on. Later on? Later on? When we have this already done? And it is not on budget. Remarkable.

What the amendment says is that the conservatorship has to end in 24 months. We will give them 2 years to figure all this out. It is reckless, in my view, to say we are not addressing these trillions of dollars in toxic assets, the hemorrhaging of $145 billion already of taxpayers' dollars, on which there is no expert who believes we will ever see a return.

Finally, I would like to quote the Wall Street Journal editorial of this morning that says, ``$145 Billion and Counting. Fannie and Freddie lose it all for you.''

The editorial says:

These efforts to support the Obama anti-foreclosure program

resulted in a doubling of loan modifications compared to the

previous--

Let me start from the beginning.

Fannie Mae yesterday announced its 11th consecutive

quarterly loss--$11.5 billion--and asked for another $8.4

billion in taxpayer assistance.

They lost that. They are asking for $8.4 billion. That puts us well over $150 billion.

Fannie Mae is the Cal Ripken of bad real-estate deals,

reliably pouring taxpayer money into the housing market.

Granted, Fannie faces tough competition from its toxic twin,

Freddie Mac, which last week announced its own request of

another $10.6 billion from taxpayers.

Once the checks from the Treasury clear, Fan and Fred will

have consumed a combined $145 billion in taxpayer cash, and

the end is nowhere in sight. Both companies warned of further

losses triggering more government assistance, which is now

unlimited after a 2009 Treasury decision.

The losses are unlimited because the companies are now run

by the government not to make money, by deliberately

subsidizing housing. In yesterday's press release, CEO Mike

Williams didn't even pretend that he's running a profit-

making business. ``In the first quarter, we continued to

serve as a leading source of liquidity to the mortgage

market, and we made solid progress in our ongoing effort to

keep people in their homes,'' he said. These efforts to

support the Obama anti-foreclosure program resulted in a

doubling of loan modifications compared to the previous

quarter.

Ramping up modifications makes perfect sense in the upside-

down world of Fannie Mae. The company also announced that

most of the loans it modified in the first three quarters of

2009 had gone delinquent again within six months.

Does anyone get that? Most of the loans that were modified--at the cost of $100-and-some billion of taxpayers money--have gone under again, have gone delinquent again within 6 months.

The Wall Street Journal goes on:

Talk about an exciting business opportunity. In case anyone

still hasn't gotten the joke, the company also clarified

yesterday that its directors ``are not obligated to consider

the interests of the company'' unless the government tells

them to do so.

The real joke is that the Obama Administration and Senator

Chris Dodd have collaborated on a financial regulatory reform

bill that includes no reform of Fan or Fred. Senators should

rectify this embarrassment as early as today by voting for

John McCain's amendment to end this most costly of all

bailouts.

My question to the distinguished chairman is, even if he doesn't accept any of the statements I made, is it true that there are trillions of dollars in toxic assets and, if so, what are we going to do about it and when? If not on this bill, where?

The cynicism out there amongst the American people is at the highest level

I have ever seen it in the many years I have been privileged to serve. To go to the American people and say we are going to take measures which will prevent another worldwide fiscal meltdown and we are not going to address trillions of dollars in toxic assets we have already poured $145 billion into--they lifted the cap on Christmas Eve at 7 p.m, so they think it is going to be in excess of $400 billion over time, and nothing in this piece of legislation, nothing in it has anything to do with Fannie Mae or Freddie Mac. Don't be surprised at the cynicism of the American people.

I want to tell the manager, because he was not here, that I am trying to get a list of speakers, get time agreements and give him a time agreement at least on this side as soon as possible.

I yield the floor.

Mr. President, for the information of the manager, I have the following speakers: Senator Coburn for 10 minutes, Senator DeMint for 10 minutes, Senator Thune for 10 minutes. I have not been able to nail down Senator Shelby as to how much time he will take. I would like to sum up for 5 minutes. There will be no more speakers on my side other than those.

Mr. President, before I yield to Senator Thune, in response to Senator Dodd's statement, I am incredulous that we would somehow believe Fannie and Freddie were not among the prime reasons for this financial meltdown.

Peter Wallison, who is a fellow in financial policy studies at the American

Enterprise Institute and is a leading expert on banking and securities regulation, has written extensively about this issue and says:

The roots of the financial crisis date back to 1993, when

Fannie Mae and Freddie Mac--

With the encouragement, by the way, of Members of Congress, including the passage of the Community Reinvestment Act, which basically forced people to give home loan mortgages to people who could never pay them back--he goes on to say--

began stocking up on subprime mortgage assets and other risky

loans while reporting them as prime. The agencies' conflict

of interest between lending to low-income borrowers and

minimizing risk-taking activity may be to blame for their

behavior, however, it is certain that the government's

failure to properly regulate the enterprises has created one

of the worst policy disasters in history.

On Christmas Eve, when most Americans' minds were on other

things, the Treasury Department announced it was removing the

$400 billion cap from what the administration believes will

be necessary to keep Fannie Mae and Freddie Mac solvent. This

action confirms that the decade-long congressional failure to

more closely regulate these two government-sponsored

enterprises (GSEs) will rank for U.S. taxpayers as one of the

worst policy disasters in our history.

That is the view of most economists. How in the world someone as knowledgeable as the distinguished chairman of the committee does not recognize this is one of the prime reasons for the failure, this is one of the prime reasons why 48 percent of the homes in Arizona are underwater, where people are throwing keys in the middle of the living room floor because they cannot afford to make the payments.

The enablers were Fannie Mae and Freddie Mac--the enablers of all this. Time after time, this Congress--this Congress--put pressure on them to increase their home loan mortgages to people who could never afford to pay their mortgages. We know that is the cause of it, and how the Senator from Connecticut can somehow allege that Fannie and Freddie were not--as Mr. Wallison says, the ``action confirms that the decade- long congressional failure to more closely regulate these two government-sponsored enterprises will rank for U.S. taxpayers as one of the worst policy disasters in our history.''

This morning, Mr. Wallison is quoted as saying:

Right now we have a consensus that something needs to be

done. The sensible thing to do is to put Congress in a

position where they have to act within a certain period of

time.

That is what this amendment does. They have to act in a certain period of time. The Senator wants to know who should be making home loans? Community banks. Community banks should be making home loans to people. They should be able to extend lines of credit to small businesses. But the main thing is, it should not be given to a government-sponsored enterprise to keep it in business, where the hundreds of billions of taxpayer dollars being spent is unlimited.

I yield the floor. Senator Thune, I believe, has 10 minutes.

Mr. President, I have been around this body for a long time. I have seen the side-by-sides. This is one of the classics that we have seen time after time. If you don't like a tough amendment, then have one that requires a study. Let's study the problem. And the purpose of this amendment as stated, and I quote from the amendment:

To require the Secretary of the Treasury to conduct a study

on ending the conservatorship of Fannie Mae and Freddie Mac

and reforming the housing finance system.

Reforming the housing finance system--I thought reforming the housing finance system was part of the deal here. I had no idea we were not going to reform the housing finance system when we advertised this legislation to the American people as to assure them that there would never be another financial meltdown which was caused by the housing finance system.

What does the side-by-side amendment do? It will require the Secretary of Treasury to conduct a study. Do you mean to tell me the Secretary of Treasury, after the greatest financial meltdown in history since the Great Depression, has to conduct a study? He has to conduct a study to figure out why we have just spent $145 billion, lifted the $400 billion cap at 7 p.m. on Christmas Eve? The system cries out for reform now. As is stated by literally every expert in America, it was the housing meltdown, abetted by the enablers Fannie and Freddie, that caused the financial meltdown. So we are doing nothing about it except asking the Secretary of Treasury to conduct a study. Remarkable. Remarkable.

Again I want to quote from the Wall Street Journal that says it well enough. It says:

This action confirms the decade-long congressional failure

to more closely regulate these two government-sponsored

enterprises will rank for U.S. taxpayers as one of the worst

policy disasters in our history.

One of the worst policy disasters in our history, and we are doing nothing about it except conduct a study. That ought to do it.

I am not calling for the abolition of Fannie and Freddie. I am calling for them to stop being in the government trough. I am saying that Fannie and Freddie ought to be doing their job in competition with everybody else who finances home loan mortgages in America. The history of these organizations is replete with enabling by the Congress of the United States--including, by the way, incredible compensation for the so-called people who were supervising these organizations as they went into the tank--one of them $93 million for a year or two of supervising going farther and farther into toxic assets.

All I can say is if we pass this legislation without this amendment, do not look the American people in the eye and say we have reformed the financial system in America. Do not look the American people in the eye and say we will never again have a financial collapse in this country. Do not say we are going to turn off the spigot of Federal tax dollars-- already $145 billion.

Why did the Treasury lift the cap of $400 billion that we were going to spend to help with these toxic assets of Fannie and Freddie if they didn't think it was going to be more than $400 billion?

So what are we doing in response? Sitting by and watching hundreds of billions of dollars of the taxpayers' money being used to bail out these two government-sponsored enterprises to the great cost of the American taxpayer. Again I say to my colleagues: Don't wonder why the American people are fed up. Don't wonder why the American people are in virtual peaceful revolt, when we continue to pour good money after bad, to the tune of hundreds of billions of dollars, without reforming the institutions that caused it. We are not fulfilling our responsibilities to the American taxpayers.

I am asking my colleagues, don't vote for another study. If you are going to vote against my amendment, fine, but let's not continue this charade and vote for another study.

I yield to the Senator from Alabama what time remains.

I ask for the yeas and nays.

Madam President, I want to discuss amendment No. 3839. This amendment is designed to end the taxpayer-backed conservatorship of Fannie Mae and Freddie Mac by putting in place an orderly transition period and eventually requiring them to operate without government subsidies on a level playing field with their private sector competitors.

Events of the last 2 years have made it clear that never again can we allow the taxpayer to be responsible for poorly managed financial entities which gamble away billions of dollars. Fannie Mae and Freddie Mac are synonomous with mismanagement and waste and have become the face of too big to fail. The time has come to end Fannie Mae and Freddie Mac's taxpayer-backed free ride and require them to operate on a level playing field.

I want to quote from an AP story yesterday entitled: ``Freddie Mac seeks $10.6B in aid after 1Q loss.'' Freddie Mac is asking for $10.6 billion in additional Federal aid after posting a big loss in the first 3 months of the year. It is another sign that the taxpayer bill for stabilizing the housing market will keep mounting. The McLean, VA-based mortgage finance company has been effectively owned by the government after nearly collapsing in September of 2008. The new request will bring the total tab for rescuing Freddie Mac to $61.3 billion. Freddie Mac says it lost $8 billion, or $2.45 a share, in the January-March period. That takes into account $1.3 billion in dividends paid to the Treasury Department. It compares with the loss of $10.4 billion or $3.18 a share, in the year-ago period.

So the beat goes on and the drainage goes on. Here on this chart we have the money yet to be repaid by institutions that received $10 billion or more in taxpayer bailouts. Obviously, these organizations have paid back. GMAC still has $16 billion they owe the taxpayer; Citigroup, $25 billion; GM--despite their PR stunt the other day, where they say they paid back, with TARP money, they paid the taxpayers with taxpayer money--$43.7 billion; AIG, $69.8 billion; and, of course, Fannie and Freddie, $125.9 billion plus.

I wish to begin today by calling my colleagues' attention to an editorial in this morning's Wall Street Journal, which states:

Fan and Fred owned or guaranteed $5 trillion in mortgages

and mortgage-backed securities when they collapsed in

September of 2008. Reforming the financial system without

fixing Fannie and Freddie is like declaring a war on terror

and ignoring al-Qaida.

I want to repeat that sentence for the benefit of my colleagues. This is from the Wall Street Journal this morning.

Reforming the financial system without fixing Fannie and

Freddie is like declaring war on terror and ignoring al-

Qaida.

Unreformed, they are sure to kill taxpayers again. Only

yesterday, Freddie said it lost $8 billion in the first

quarter, requested another $10.6 billion from Uncle Sam, and

warned that it would need more in the future. This comes on

top of the $126.9 billion that Fan and Fred had already lost

through the end of 2009. The duo are by far the biggest

losers of the entire financial panic--bigger than AIG,

Citigroup and the rest.

From the 2008 meltdown through 2020, the toxic twins will

cost taxpayers close to $380 billion, according to the

Congressional Budget Office's cautious estimate.

The numbers, I say to my colleagues, are staggering--staggering.

The Obama administration won't even put the companies on

budget for fear of the deficit impact, but it realizes the

problem because last Christmas Eve--

Strangely enough on Christmas Eve--

. . . it raised the $400 billion cap on their potential

taxpayer losses to . . . infinity. Moreover, these taxpayer

losses understate the financial destruction wrought by Fan

and Fred. By concealing how much they were gambling on risky

subprime and Alt-A mortgages, the companies sent bogus

signals on the size of these markets and distorted decision-

making throughout the system. Their implicit government

guarantee also let them sell mortgage-backed securities

around the world, attracting capital to U.S. housing and thus

turbocharging the mania.

Specifically, this amendment does several things:

It provides for a finite end to the current conservatorship period for both government-sponsored enterprises--GSEs--at 2 years of date from the enactment. The Federal Housing Finance Agency has an option to extend conservatorship for 6 months if the FHFA Director determines and notifies Congress that adverse market conditions exist. If at the end of conservatorship a GSE is not financially viable, the FHFA must place that GSE in receivership. If the GSE is financially viable, then it would be allowed to reenter the market under new operating restrictions.

It provides for the following changes to existing operating structure:

It calls for the repeal of the affordable housing goals mandates for the GSEs.

It calls for new limits for mortgage assets held on its books of no more than 95 percent of mortgage assets owned on December 31 of the prior year, reduced an additional 25 percent by the end of year 1, reduced an additional 25 percent by the end of year 2, and reduced to $250 billion by the end of year 3.

It strengthens capital standards and allows them to be increased by the FHFA as necessary.

It calls for the repeal of the temporary increases in conforming loan limit and high cost area increases, and a return to the $417,000 conforming loan limit for the first year, subject to annual adjustments by FHFA.

It provides for a prohibition on the purchase of mortgages exceeding the median home price for that area.

It calls for a minimum downpayment requirement of at least 5 percent for all new loans purchased by the GSE, increasing to 7.5 percent in the second year, and 10 percent in the third year.

It repeals the GSE exemption from having to pay State and local taxes.

I wonder how many of my colleagues and fellow citizens knew that Fannie and Freddie did not have to pay State and local taxes.

It calls for a repeal of the exemption allowing GSE securities to avoid full SEC registration.

In other words, given their enormous clout here in the Congress, Fannie and Freddie were able to have an exemption from their securities falling under SEC registration.

It calls for an assessment of fees on GSEs to recoup full value of the benefit due to guarantee provided by the Federal Government. And GAO will conduct a study to determine current value of government guarantee.

The amendment establishes a 3-year period after the end of conservatorship for GSEs to operate under new operating restrictions until their government charter expires. Upon charter expiration, it provides for a 10-year period with the creation of a separate holding corporation and a dissolution trust fund for any remaining mortgages or debt obligations held by the GSE.

It establishes a Senate-confirmed special inspector general within the Government Accountability Office with responsibility for investigating and reporting to Congress on decisions made with respect to the conservatorships of Fannie Mae and Freddie Mac. The SIG would provide quarterly reports to Congress.

While GSEs remain in conservatorship, it reestablishes the Federal funding limit of $200 billion per institution

for the GSEs and requires the GSEs to reduce their portfolio holdings by 10 percent of the prior year's holdings. It also establishes an approval process for any further agreements that put the taxpayers at risk.

It places Fannie Mae and Freddie Mac as part of the Federal budget as long as either institution is under a conservatorship or receivership.

Again, my colleagues might be interested that Fannie Mae and Freddie Mac, and what we are doing with them now, is not part of the Federal budget--remarkable.

It requires the FHFA to establish minimum prudent underwriting standards for mortgage loans eligible for government-sponsored entities purchase. Minimum requirements will include verification and documentation of income and assets relied upon to qualify the borrower for the mortgage loan and determination of borrower's ability to repay the mortgage loan.

I might add that the Congressional Budget Office has indicated this amendment would save the taxpayers several billions of dollars annually. I repeat, the Congressional Budget Office states--and, by the way, it has not been given any phony assumptions such as a doc fix-- this amendment would save the taxpayers several billions of dollars annually.

During the debate on this financial reform bill, we will continue to hear a lot about how the U.S. Government will never again allow a financial institution to become too big to fail. We will hear continuous calls for more regulation to ensure that taxpayers are never again placed at such tremendous risk.

Sadly, and I say very sadly, the underlying bill completely ignores the elephant in the room because no other entity's failure would be as disastrous to our economy as Fannie Mae's and Freddie Mac's. Yet this bill does not address them at all.

In a recent Opinion Piece in the Wall Street Journal, Robert Wilmers wrote:

Congress may be making progress crafting new regulations

for the financial-services industry, but it has yet to begin

reforming two institutions that played a key role in the 2008

credit crisis--Fannie Mae and Freddie Mac.

We cannot reform these government-sponsored enterprises

unless we fully confront the extent to which their outrageous

behavior and reckless business practices have affected the

entire commercial banking sector and the U.S. economy as a

whole.

At the end of 2009, their total debt outstanding--either

held directly on their balance sheets or as guarantees on

mortgage securities they'd sold to investors--was $8.1

trillion. That compares to $7.8 trillion in total marketable

debt outstanding for the entire U.S. government. The debt has

the implicit guarantee of the federal government but is not

reflected on the national balance sheet.

The public has focused more on taxpayer bailouts of banks,

auto makers and insurance companies. But the scale of the

rescue required in September 2008 when Fannie and Freddie

were forced into conservatorship--their version of

bankruptcy--was staggering. To date, the federal government

has been forced to pump $126 billion into Fannie and Freddie.

That's far more than AIG, which absorbed $70 billion of

government largess, and General Motors and Chrysler, which

shared $77 billion. Banks received $205 billion, of which

$136 billion has been repaid.

Fannie and Freddie continue to operate deeply in the red,

with no end in sight. The Congressional Budget Office

estimated that if their operating costs and subsidies were

included in our accounting of the overall federal deficit--as

properly they should be--the 2009 deficit would be greater by

$291 billion.

The op-ed continues:

All this happened in the name of the ``American Dream'' of

home ownership. But there's no evidence Fannie and Freddie

helped much, if at all, to make this dream come true. Despite

all their initiatives since the early 1970s, shortly after

they were incorporated as private corporations protected by

government charters, the percentage of American households

owning homes has increased by merely four percentage points

to 67%.

According to a 2004 Congressional Budget Office study, the

two GSEs enjoyed $23 billion in subsidies in 2003--primarily

in the form of lower borrowing costs and exemption from state

and local taxation. But they passed on only $13 billion to

home buyers. Nevertheless, one former Fannie Mae CEO,

Franklin Raines, received $91 million in compensation from

1998 through 2003.

Amazing.

In 2006, the top five Fannie Mae executives shared $34

million in compensation, while their counterparts at Freddie

Mac shared $35 million. In 2009, even after the financial

crash and as these two GSEs fell deeper into the red, the top

five executives at Fannie Mae received $19 million in

compensation and the CEO earned $6 million.

This is not private enterprise--it's crony capitalism, in

which public subsidies are turned into private riches. From

2001 through 2006, Fannie and Freddie spent $123 million to

lobby Congress--the second-highest lobbying total in the

country. That lobbying was complemented by sizable direct

political contributions to members of Congress.

Changing this terrible situation will not be easy. The

mortgage market has come to be structured around Fannie and

Freddie and powerful interests are allied with the status

quo.

Nonetheless, Congress must get to work on the reform of

Fannie Mae and Freddie Mac. A healthy housing market, a

healthy financial system and even the bond rating of the

federal government depend on it.

There have been countless warnings about the mismanagement of both Fannie and Freddie over the years. In May of 2006, after a 27-month investigation into the corrupt corporate culture and accounting practices at Fannie Mae, the Office of Federal Housing Enterprise Oversight--OFHEO--the Federal regulator charged with overseeing Fannie Mae--issued a blistering, 348-page report which stated that:

Fannie Mae senior management promoted an image of the

Enterprise as one of the lowest-risk financial institutions

in the world and as ``best in class'' in terms of risk

management, financial reporting, internal control, and

corporate governance. The findings in this report show that

risks at Fannie Mae were greatly understated and that the

image was false.

During the period covered by this report--1998 to mid-

2004--Fannie Mae reported extremely smooth profit growth and

hit announced targets for earnings per share precisely each

quarter. Those achievements were illusions deliberately and

systematically created by the Enterprise's senior management

with the aid of inappropriate accounting and improper

earnings management.

A large number of Fannie Mae's accounting policies and

practices did not comply with Generally Accepted Accounting

Principles (GAAP). The Enterprise also had serious problems

of internal control, financial reporting, and corporate

governance. Those errors resulted in Fannie Mae overstating

reported income and capital by a currently estimated $10.6

billion.

By deliberately and intentionally manipulating accounting

to hit earnings targets, senior management maximized the

bonuses and other executive compensation they received, at

the expense of shareholders. Earnings management made a

significant contribution to the compensation of Fannie Mae

Chairman and CEO Franklin Raines, which totaled over $90

million from 1998 through 2003. Of that total, over $52

million was directly tied to achieving earnings per share

targets.

Fannie Mae consistently took a significant amount of

interest rate risk and, when interest rates fell in 2002,

incurred billions of dollars in economic losses. The

Enterprise also had large operational and reputational risk

exposures.

Fannie Mae's Board of Directors contributed to those

problems by failing to be sufficiently informed and to act

independently of its chairman, Franklin Raines, and other

senior executives; by failing to exercise the requisite

oversight over the Enterprise's operations; and by failing to

discover or ensure the correction of a wide variety of unsafe

and unsound practices.

The Board's failures continued in the wake of revelations

of accounting problems and improper earnings management at

Freddie Mac and other high profile firms, the initiation of

OFHEO's special examination, and credible allegations of

improper earnings management made by an employee of the

Enterprise's Office of the Controller.

Senior management did not make investments in accounting

systems, computer systems, other infrastructure, and staffing

needed to support a sound internal control system, proper

accounting, and GAAP-consistent financial reporting. Those

failures came at a time when Fannie Mae faced many

operational challenges related to its rapid growth and

changing accounting and legal requirements.

Fannie Mae senior management sought to interfere with

OFHEO's special examination by diretstOg the Enterprise's

lobbyists to use their ties to Congressional staff to No. 1,

generate a Congressional request for the Inspector General of

the Department of Housing and Urban Development (HUD) to

investigate OFHEO's conduct of that examination and No. 2,

insert into an appropriations bill language that would reduce

the agency's appropriations until the Director of OFHEO was

replaced.

OFHEO has directed and will continue to direct Fannie Mae

to take remedial actions to enhance the safe and sound

operation of the Enterprise going forward. OFHEO staff

recommends actions to enhance the goal of maintaining the

safety and soundness of Fannie Mae.

A remarkable report.

So what steps were taken by the Congress to punish Fannie Mae for such deliberate manipulation and outright corruption? Basically: NONE. According to published reports--including

Fannie Mae's own news release--Daniel Mudd, the president and CEO of Fannie Mae at the time, was awarded over $14.4 million in 2006--the year this report was issued, and over $12.2 million in 2007 in salary, bonuses and stock. And Fannie Mae continued their risky behavior-- successfully posting profits of $4.1 billion in 2006.

The blatant corruption reported by the OFHEO led me to come to the Senate floor back in 2006 and call for the immediate consideration of GSE regulatory reform legislation. At the time I said:

For years I have been concerned about the regulatory

structure that governs Fannie Mae and Freddie Mac and the

sheer magnitude of these companies and the role they play in

the housing market. OFHEO's report this week does nothing to

ease these concerns. In fact, the report does quite the

contrary. OFHEO's report solidifies my view that the GSEs

need to be reformed without delay.

If Congress does not act, American taxpayers will continue

to be exposed to the enormous risk that Fannie Mae and

Freddie Mac pose to the housing market, the overall financial

system, and the economy as a whole.

Additionally, also in May, 2006, I joined 19 of my colleagues in writing to the majority leader urging him to bring the Federal Housing Enterprise Regulatory Reform Act to the floor for debate.

I ask unanimous consent this letter be printed in the Record.

The letter stated in part:

Substantial testimony calling for improved regulation of

the GSEs has been provided to the Senate by the Treasury,

Federal Reserve, HUD, GAO, CBO, and others. Congress has the

opportunity to recommit itself to the housing mission of the

GSEs while at the same time making sure the GSEs operate in a

manner that does not expose our financial system, or

taxpayers, to unnecessary risk. It is vitally important that

Congress take the necessary steps to ensure that these

institutions benefit from strong and independent regulatory

supervision, operate in a safe and sound manner, and are

primarily focused on their statutory mission.

More importantly, Congress must ensure that the American

taxpayer is protected in the event either GSE should fail.

Sadly, the bill which had passed the Senate Banking Committee under the leadership of then-Chairman Shelby, with the support of all the committee's Republicans and none of the Democrats, was not brought up for consideration before this body.

It is critical to note, it was in 2005 that the GSEs, which had been acquiring increasing numbers of subprime loans for many years in order to meet their HUD-imposed affordable housing requirements, accelerated the purchases that led to their 2008 insolvency.

If legislation along the lines of the Senate Banking Committee's bill had been enacted that year, many if not all the losses Fannie Mae and Freddie Mac suffered, and will suffer in the future, may have been avoided. I wish to make it clear to my colleagues: Failure of Congress to act could have prevented--if they had acted--many of the failures we are now facing.

Any criticism leveled at Congress for the failures in Fannie Mae and Freddie Mac is very well placed. On October 3, 2008, the Wall Street Journal reported on how Congress pushed Fannie Mae and Freddie Mac to increase the purchases of low- and moderate-income borrowers. They wrote:

Beginning in 1992, Congress pushed Fannie Mae and Freddie

Mac to increase their purchases of mortgages going to low-

and moderate-income borrowers. For 1996, the Department of

Housing and Urban Development (HUD) gave Fannie and Freddie

an explicit target--42 percent of their mortgage financing

had to go to borrowers with income below the median in their

area. The target increased to 50 percent in 2000 and 52

percent in 2005.

For 1996, HUD required that 12 percent of all mortgages purchased by Fannie Mae and Freddie Mac be ``special, affordable'' loans, typically to borrowers with income less than 60 percent of their area's median income. That number was increased to 20 percent in 2000 and 22 percent in 2005. The 2008 goal was to be 28 percent.

Between 2000 and 2005, Fannie Mae and Freddie Mac met these goals every year, funding hundreds of billions of dollars' worth of loans, many of them subprime and adjustable rate loans made to borrowers who bought houses with less than 10 percent down.

Fannie Mae and Freddie Mac also purchased hundreds of billions of subprime securities for their own portfolios to make money and help satisfy HUD affordable housing goals. Fannie Mae and Freddie Mac were important contributors to the demand for subprime securities. Congress designed Fannie Mae and Freddie Mac to serve both their investors and the political class.

Demanding that Fannie Mae and Freddie do more to increase home ownership among poor people allowed Congress and the White House to subsidize low-income housing outside the budget, at least in the short run. It was a political free lunch. The Community Reinvestment Act, CRA, did the same thing with traditional banks. It encouraged banks to serve two masters, their bottom line and the so-called common good.

First passed in 1977, the CRA was ``strengthened'' in 1995, causing an increase of 80 percent in the number of bank loans going to low- and moderate-income families. By the way, there is nothing wrong with that as long as they meet the fundamental criteria, that they are borrowing money they can pay back.

Fannie Mae and Freddie Mac were part of the CRA story too. In 1997, Bear Stearns did the first securitization of CRA loans, a $384 million offering guaranteed by Freddie Mac. Over the next 10 months, Bear Sterns issued $1.9 billion of CRA mortgages backed by Fannie Mae or Freddie Mac.

Between 2000 and 2002, Fannie Mae securitized $394 billion in CRA loans, with $20 billion going to securitize the mortgages. Fannie Mae and Freddie Mac played a significant role in the explosion of subprime mortgages and subprime mortgage-backed securities.

Without Fannie Mae and Freddie Mac's implicit guarantee of government support, which turned out to be all too real, would the mortgage-backed securities market and the subprime part of it have expanded the way they did? Perhaps. But before we conclude that markets failed, we need a careful analysis of public policy's role in creating this mess. Greedy investors obviously played a part, but investors have always been greedy, and

some inevitably overreach and destroy themselves.

Why did they take so many down with them this time? Part of the answer is, a political class greedy to push home ownership rates to historic highs, from 64 percent in 1994 to 69 percent in 2004. This was mostly the result of loans to low-income, higher risk borrowers. Both Bill Clinton and George W. Bush, abetted by Congress, trumpeted this rise as it occurred.

The consequence, on top of putting the entire financial system at risk, the hidden cost has been hundreds of billions of dollars funneled into the housing market instead of more productive assets. Beware of trying to do good with other people's money.

Unfortunately, that strategy remains at the heart of the political process and a proposed solution to this crisis. Congress had the responsibility to ensure that Fannie Mae and Freddie Mac were properly supervised and adequately regulated. Congress failed. The devastation caused by that failure continues to reverberate across the Nation as more and more families face foreclosures every day.

In September 2008, the Washington Post published an in-depth article titled: ``How Washington Failed to Rein in Fannie, Freddie. As Profits Grew, Firms Used Their Power To Mask Peril.'' It is extremely informative and raised many troubling questions about the culture of corruption which is evident in the operations of both enterprises.

The Post piece begins:

Gary Gensler, an undersecretary of the Treasury, went to

Capitol Hill in March 2000 to testify in favor of a bill

everyone knew would fail.

Fannie Mae and Freddie Mac were ascendent, giants of the

mortgage finance business and key players in the Clinton

administration's drive to expand home ownership. But Gensler

and other Treasury officials feared the companies had grown

so large that, if they stumbled, the damage to the U.S.

economy could be staggering. Few officials had ever publicly

criticized Fannie Mae and Freddie Mac, but Gensler concluded

it was time to rein them in.

``We thought this was a hand-on-the-Bible moment,'' he

recalled.

The bill failed.

The companies kept growing, the dangers posed by their

scale and financial practices kept mounting, critics kept

warning of the consequences. Yet across official Washington,

those who might have acted repeatedly failed to do so until

it was too late.

Blessed with the advantages of a government agency and a

private company ``at the same time, Fannie Mae and Freddie

Mac used their windfall profits to co-opt the politicians who

were supposed to control them. The companies fought

successfully against increased regulation by cultivating

their friends and hounding their enemies.

The agencies that regulated the companies were outmatched:

They lacked the money, the staff, the sophistication and the

political support to serve as an effective check.

But most of all, the companies were protected by the belief

widespread in Washington--and aggressively promoted by Fannie

Mae and Freddie Mac--that their success was inseparable from

the expansion of homeownership in America. That conviction

was so strong that many lawmakers and regulators ignored the

peril posed to that ideal by the failure of either company.

In October 1992, a brief debate unfolded on the floor of

the House of Representatives over a bill to create a new

regulator for Fannie Mae and Freddie Mac. On one side stood

Jim Leach, an Iowa Republican concerned that Congress was

``hamstringing'' this new regulator at the behest of the

companies.

He warned that the two companies were changing ``from being

agencies of the public at large to money machines for the

stockholding few.''

On the other side stood Barney Frank, a Massachusetts

Democrat, who said the companies served a public purpose.

They were in the business of lowering the price of mortgage

loans.

Congress chose to create a weak regulator, the Office of

Federal Housing Enterprise Oversight. The agency was required

to get its budget approved by Congress, while agencies that

regulated the banks set their own budgets. That gave

Congressional allies an easy way to exert pressure.

``Fannie Mae's lobbyists worked to ensure that [the] agency

was poorly funded and its budget remained subject to approval

in the annual appropriations process,'' OFHEO said more than

a decade later in a report on Fannie Mae. ``The goal of

senior management was straightforward: to force OFHEO to rely

on the [Fannie] for information and expertise to the degree

that Fannie Mae would essentially regulate itself.''

Congress also wanted to free up money for Fannie Mae and

Freddie Mac to buy mortgage loans and specified that the pair

would be required to keep a much smaller share of their funds

on hand than other financial institutions. Where banks that

held $100 could spend $90 buying mortgage loans, Fannie Mae

and Freddie Mac could spend $97.50 buying loans.

Finally, Congress ordered that the companies be required to

keep more capital as a cushion against losses if they

invested in riskier securities. But the rule was never set

during the Clinton administration, which came to office that

winter, and was only put in place nine years later.

The Clinton administration wanted to expand the share of

Americans who owned homes, which had stagnated below 65

percent throughout the 1980s. Encouraging the growth of the

two companies was a key part of that plan.

``We began to stress homeownership as an explicit goal for

this period of American history,'' said Henry Cisneros, then

Secretary of Housing and Urban Development. ``Fannie Mae and

Freddie Mac became part of that equation.''

The result was a period of unrestrained growth for the

companies. They had pioneered the business of selling bundled

mortgage loans to investors and now, as demand for investors

soared, so did their profits.

Near the end of the Clinton administration, some of its

officials had concluded the companies were so large that

their sheer size posed a risk to the financial system.

In the fall of 1999, Treasury Secretary Lawrence Summers

issued a warning, saying, ``Debates about systemic risk

should also now include government-sponsored enterprises,

which are large and growing rapidly.''

It was a signal moment. An administration official had said

in public that Fannie Mae and Freddie Mac could be a hazard.

The next spring, seeking to limit the companies' growth,

Treasury official Gensler testified before Congress in favor

of a bill that would have suspended the Treasury's right to

buy $2.25 billion of each company's debt--basically, a $4.5

billion lifeline for the companies.

A Fannie Mae spokesman announced that Gensler's remarks had

just cost 206,000 Americans the chance to buy a home because

the market now saw the companies as a riskier investment.

The Treasury Department folded in the face of public

pressure.

There was an emerging consensus among politicians and even

critics of the two companies that Fannie Mae might be right.

The companies increasingly were seen as the engine of the

housing boom. They were increasingly impervious to calls for

even modest reforms.

As early as 1996, the Congressional Budget Office had

reported that the two companies were using government support

to goose profits, rather than reducing mortgage rates as much

as possible.

But the report concluded that severing government ties with

Fannie Mae and Freddie Mac would harm the housing market. In

unusually colorful language, the budget office wrote, ``Once

one agrees to share a canoe with a bear, it is hard to get

him out without obtaining his agreement or getting wet.''

Fannie Mae and Freddie Mac enjoyed the nearest thing to a

license to print money. The companies borrowed money at

below-market interest rates based on the perception that the

government guaranteed repayment, and then they used the money

to buy mortgages that paid market interest rates. Federal

Reserve Chairman Alan Greenspan called the difference between

the interest rates a ``big, fat gap.'' The budget office

study found that it was worth $3.9 billion in 1995. By 2004,

the office would estimate it was worth $20 billion.

As a result, the great risk to the profitability of Fannie

Mae and Freddie Mac was not the movement of interest rates or

defaults by borrowers, the concerns of normal financial

institution. Fannie Mae's risk was political, the concern

that the government would end its special status.

So the companies increasingly used their windfall for a

massive campaign to protect that status.

``We manage our political risk with the same intensity that

we manage our credit and interest rate risks,'' Fannie Mae

chief executive Franklin Raines said in a 1999 meeting with

investors.

Fannie Mae, and to a lesser extent Freddie Mac, became

enmeshed in the fabric of political Washington. They were

places former government officials went to get wealthy--and

to wait for new federal appointments. At Fannie Mae, chief

executives had clauses written into their contracts spelling

out the severance benefits they would receive if they left

for a government post.

The companies also donated generously to the campaigns of

favored politicians.

But Fannie Mae wasn't just buying influence. It was selling

government officials on an idea by making its brand

synonymous with homeownership. The company spent tens of

millions of dollars each year on advertising.

In tying itself to politicians and wrapping itself in the

American flag, Fannie Mae went out of its way to share credit

with politicians for investments in their communities.

``They have always done everything in their power to

massage Congress,'' Leach said.

And when they couldn't massage, they intimidated. In 2003,

Richard H. Baker (R-La.), chairman of the House Financial

Services subcommittee with oversight over Fannie Mae and

Freddie Mac, got information from OFHEO on the salaries paid

to executives at both companies. Fannie Mae threatened to

sue Baker if he released it, he recalled. Fearing the expense

of a court battle, he kept the data secret for a year.

Baker, who left office in February, 2008, said he had never

received a comparable threat from another company in 21 years

in Congress. ``The political arrogance exhibited in their

heyday, there has never been before or since a private entity

that exerted that kind of political power,'' he said.

In June 2003, Freddie Mac dropped a bombshell: It had

understated its profits over the previous three years by as

much as $6.9 billion in an effort to smooth out earnings.

OFHEO seemed blind. Months earlier, the regulator had

pronounced Freddie's accounting controls ``accurate and

reliable.''

Humiliated by the scandal, then-OFHEO director Armando

Falcon Jr. persuaded the White House to pay for an outside

accountant to review the books of Fannie Mae. The agency

reported in September 2004 that Fannie Mae also had

manipulated its accounting, in this case to inflate its

profits.

The companies soon faced new bills in both the House and

the Senate seeking increased regulation. The Bush

administration took the hardest line, insisting on a strong

new regulator and seeking the power to put the companies into

receivership if they foundered. That suggested the government

might not stand behind the companies' debt.

Fannie Mae and Freddie Mac succeeded in escaping once more,

by pounding every available button.

The companies orchestrated a letter-writing campaign by

traditional allies including real estate agents, home

builders and mortgage lenders. Fannie Mae ran radio and

television ads ahead of a key Senate committee meeting,

depicting a Latino couple who fretted that if the bill

passed, mortgage rates would go up.

The wife lamented: ``But that could mean we won't be able

to afford the new house.''

Most of all, the company leaned on its Congressional

supporters.

Fannie Mae even persuaded the New York Stock Exchange to

allow its shares to keep trading. The company had not issued

a required report on its financial condition in a year. The

rules of the exchange required delisting. So the exchange

created an exception when ``delisting would be significantly

contrary to the national interest.''

The amendment was approved by the Securities and Exchange

Commission. Fannie Mae would remain on the New York Stock

Exchange.

As Fannie Mae and Freddie Mac were trying to recover from

their accounting scandals, a new and ultimately mortal threat

emerged. Yet again, the warnings went unheeded for too long.

The companies had begun buying loans made to borrowers with

credit problems.

Fannie Mae and Freddie Mac had been losing market share to

Wall Street banks, which were doing boomtown business

packaging these riskier loans. The mortgage finance giants

wanted a share of the profits.

Soon, the firms' own reports were noting the growing risk

of their portfolios. Dense monthly summaries of the

companies' mortgage purchases were piling up at OFHEO.

An employee at one of the companies said it was already a

constant discussion around the office in 2004: When would the

regulators notice?

``It didn't take a lot of sophistication to notice what was

happening to the quality of the loans. Anybody could have

seen it,'' the staffer said. ``But nobody on the outside was

even questioning us about it.''

President Bush had pledged to create an ``ownership

society,'' and the companies were helping the administration

achieve its goal of putting more than 10 million Americans

into their first homes.

Fannie Mae and Freddie Mac's appetite for risky loans was

growing ever more voracious. By the time OFHEO began raising

red flags in January 2007, many borrowers were defaulting on

loans and within months Fannie Mae and Freddie Mac would be

running out of money to cover the losses.

Finally, as the credit crisis escalated, Congress passed a

bill in July of 2008 that established a tough, new regulator

for Fannie Mae and Freddie Mac. It was too late.

Americans are hurting. The economic situation remains depressed in my State. Unemployment is at record levels. The time has come to end the taxpayer-funded free ride of the gambling institutions. We cannot afford it anymore.

Mr. President, for us to somehow say we are going to enact significant and meaningful financial regulatory reform without addressing this situation--these hundreds of billions of dollars of toxic assets that still have not been resolved; two government- supported enterprises that have been propped up by the taxpayers of America for too long, while they engaged in the riskiest of enterprises, paying obscene profits to their executives and CEOs, their boards of directors derelict in their duties, criminally so.

We must enact reform of Freddie and Fannie if we are going to perform our duties, albeit too late--too late because of the terrible losses we have inflicted on the American taxpayers. But it is not too late to fix it.

Mr. President, I yield the floor.

I have not laid down the amendment because I understand the Senator from Connecticut would move to table, and there are numerous Members who want to talk on this issue--this multitrillion- dollar issue. So, no, I have not. But I can also assure the Senator from Connecticut, if I propose the amendment, and it is tabled without proper debate, there will be another amendment just like it.

In the words of Humphrey Bogart in Casablanca, I was misinformed because I was told by several different individuals that you would be moving to table the amendment if it was proposed. I am glad to hear that is not the case. I know of at least 20 Members on this side who want to speak on this issue. I will try to compile that and try to come to the Senator with a list and the time they want to discuss.

With all due respect to all the other amendments--and I do not say this very often--when we are talking about trillions of dollars-- trillions of dollars--this is a very important amendment. So I will try to get to the distinguished chairman--I say with sympathy and respect-- a list of speakers and the amount of time they may consume as soon as possible.

Sure. Absolutely.

Absolutely.

I have no objection to moving other amendments while I am doing that. None whatsoever.

We have to ask our leader but, yes, that is fine. Our two leaders say it is fine. I thank you.

Mr. President, I wish to speak in order to honor the life and achievements of Christopher C. Bolkcom, Congressional Research Service Specialist, on the occasion of the first anniversary of his passing away, on May 1, 2009.

Christopher Bolkcom served Congress with distinction for 9 years at the Library of Congress as a specialist in military aviation for the Congressional Research Service. He held a bachelor's degree in international relations from the University of Minnesota, a master's degree in international affairs from American University in Washington, DC, and a master's degree in national security strategy from the National War College in Washington, DC.

Christopher was born on June 13, 1962, in Minneapolis, MN, raised there and then spent his adult life and career in the National Capitol Region until his untimely death on May 1, 2009.

Christopher was recognized throughout Congress, the military Services, the defense community, and the aeronautical industry as an expert on the management, operational use and procurement of military aircraft. In that capacity, he assisted Congress in its legislative and oversight activities, including testifying before the Senate Armed Services Committee; the House Armed Services Committee; the Senate Commerce, Science and Transportation Committee; and the Senate Governmental Affairs Committee. Christopher published many influential CRS reports on such subjects as Air Force aerial refueling; the role of airpower in counterinsurgency operations; tactical aviation and bomber force modernization; military aviation safety; suppression of enemy air defenses; and protecting commercial aircraft from shoulder-fired missiles. He provided objective, expert analysis on a number of issues, including the Joint Strike Fighter and the KC-X Tanker, to Congress, the Senate Armed Services Committee, and to me and my staff personally--analysis for which I am very grateful.

Christopher displayed generous enthusiasm for meeting the professional needs of colleagues and clients, enlivened by persistent humor and wit in his interpersonal relations. He worked hard at his public duties. He also played hard with friends, whether skiing or kick-boxing, and found time to serve others, at for example the Falls Church Presbyterian Church in Falls Church, VA.

On this occasion--the first anniversary of Christopher's passing away--I want to honor the life and achievements of Congressional Research Service Specialist Christopher Bolkcom, who is survived by his loving family, including his children Jessica and Maxwell Bolkcom; their mother Mary Anne Alexander; his parents Gene and Ann Bolkcom; his sister Elizabeth Matteson; his brother Bill Bolkcom; and his nephew Tristin Matteson.

Mr. President, I would like to take a moment today to recognize the extraordinary contributions of VADM Mike Loose, Civil Engineer Corps, U.S. Navy to our Nation. Vice Admiral Loose has served with exceptional distinction as the Deputy Chief of Naval Operations, CNO, for Fleet Readiness and Logistics, a position of great responsibility, from January 2007 to April 2010.

Vice Admiral Loose brought a unique and remarkable perspective to the CNO's leadership team, resulting in profound innovations to Navy policy, programs, and resourcing. His professional reach extended to the Joint Staff, the other Services, our international defense partners, and the industry to achieve alignment and collaboration resulting in great benefits to everyone involved. He was the visionary leader and driving force behind the Navy's transition from a level-of- effort based budget to a model-based approach that links Afloat Readiness to output metrics and resources. This transformational leap provided senior Navy leadership the intellectual basis and the tools to enhance core Warfighting capabilities in a restrained fiscal environment and to clearly define the relationship between baseline and overseas contingency operations funding.

Vice Admiral Loose was also the vanguard who recognized the strategic imperative of energy to the employment of Navy combat forces and spearheaded the establishment of Task Force Energy and the Navy Energy Coordination Office 2 years ago. He fully established the mindset that energy is a tactical advantage and strategic enabler for military forces. In short order, his Energy organization was recognized as the premier model for the other Services and as the foundation for the DON's Energy program. In addition, he profoundly reshaped and expertly guided the Navy's Environmental Program at a time when the importance of the program was paramount. His foresight and energetic leadership ensured the Navy achieved regulatory milestones and uninterrupted, critical operational training in support of national command authority objectives.

In recognition of the enormous challenges inherently facing the funding of future ownership costs of existing and new systems Vice Admiral Loose directed the development of a ``2030 and Beyond'' assessment that demonstrated that the growth in future ownership costs of existing and new systems would far exceed the expected growth in the Navy's topline budget over the next 20 years. His efforts led to an increased focus on total ownership costs across the Navy, specific direction in the 2010 Chief of Naval Operations Guidance and his assignment as the Navy's Executive Agent for Total Ownership Costs.

Today, I honor Vice Admiral Loose for his service to our country, his inspirational and visionary leadership, his extraordinary strength of character and moral courage, and his irrepressible drive and leadership. He and his wife Carol and their son Chris have made many sacrifices during his career in the Navy. I call upon my colleagues

to join his family, friends, and association to wish them ``fair winds and following seas.''

Mr. President, I am pleased to introduce legislation that would amend the Radiation Exposure Compensation Act, RECA, by adding Mohave County, AZ, to the list of counties eligible for downwinder compensation. A similar proposal was introduced in the House of Representatives by Congressman Trent Franks. I'm hopeful this bill will help close a painful chapter for those Arizonans who were arguably the most affected by nuclear weapons testing during the Cold War.

In 1990, Congress enacted the Radiation Exposure Compensation Act to compensate victims or their survivors who suffered certain illnesses caused by fallout exposure ``down wind'' of atmospheric nuclear weapons testing in the 1940's and lasting into the 1960's. Among various requirements, compensation eligibility is limited to certain affected counties which are specifically listed in the law. Astonishingly, despite its close proximity to the Nevada Test Site, the original RECA law and its subsequent amendments never listed Mohave County proper as an affected area. I believe the people of Mohave County deserve to see righted this unjust policy which has obstructed their ability to qualify for compensation.

I understand that several of my colleagues have proposed similar RECA amendments based on data suggesting that their home states were also ``down wind'' of nuclear weapons testing. In addition, my colleague, Senator Tom Udall, has introduced a far reaching legislative proposal to vastly expand the RECA program. I would hope that as these various RECA proposals advance through the legislative process, Congress gives thorough consideration to an April 2005 report by the National Academy of Sciences, NAS, that assessed, among other things, whether additional geographic areas should be added to the RECA program. The NAS study revealed a much wider area of radioactive fallout then originally identified when the RECA law was first written. The report also recommended replacing the geographic area criteria with a new science- based process for determining compensation eligibility, a method similar to what's used in the Radiation Exposed-Veterans Compensation Act and the Energy Employees Occupational Illness Compensation Program Act. I believe it is worthwhile

for policy makers to consider the recommendations of the NAS report.

In the meantime and until a comprehensive overhaul of RECA is developed, I will work within the parameters of the existing RECA law in my efforts to ensure that the people of Mohave County are treated fairly in this matter. I encourage my colleagues to support this bill.

Mr. President, I am pleased to introduce legislation that would amend the Radiation Exposure Compensation Act, RECA, by adding Mohave County, AZ, to the list of counties eligible for downwinder compensation. A similar proposal was introduced in the House of Representatives by Congressman Trent Franks. I'm hopeful this bill will help close a painful chapter for those Arizonans who were arguably the most affected by nuclear weapons testing during the Cold War.

In 1990, Congress enacted the Radiation Exposure Compensation Act to compensate victims or their survivors who suffered certain illnesses caused by fallout exposure ``down wind'' of atmospheric nuclear weapons testing in the 1940's and lasting into the 1960's. Among various requirements, compensation eligibility is limited to certain affected counties which are specifically listed in the law. Astonishingly, despite its close proximity to the Nevada Test Site, the original RECA law and its subsequent amendments never listed Mohave County proper as an affected area. I believe the people of Mohave County deserve to see righted this unjust policy which has obstructed their ability to qualify for compensation.

I understand that several of my colleagues have proposed similar RECA amendments based on data suggesting that their home states were also ``down wind'' of nuclear weapons testing. In addition, my colleague, Senator Tom Udall, has introduced a far reaching legislative proposal to vastly expand the RECA program. I would hope that as these various RECA proposals advance through the legislative process, Congress gives thorough consideration to an April 2005 report by the National Academy of Sciences, NAS, that assessed, among other things, whether additional geographic areas should be added to the RECA program. The NAS study revealed a much wider area of radioactive fallout then originally identified when the RECA law was first written. The report also recommended replacing the geographic area criteria with a new science- based process for determining compensation eligibility, a method similar to what's used in the Radiation Exposed-Veterans Compensation Act and the Energy Employees Occupational Illness Compensation Program Act. I believe it is worthwhile

for policy makers to consider the recommendations of the NAS report.

In the meantime and until a comprehensive overhaul of RECA is developed, I will work within the parameters of the existing RECA law in my efforts to ensure that the people of Mohave County are treated fairly in this matter. I encourage my colleagues to support this bill.

Mr. President, I am proud to introduce the Second Amendment Enforcement Act today with Senator Tester. I have always supported Americans' Second Amendment rights and was pleased when the Supreme Court found in June 2008 that the District of Columbia had reached too far in restricting the District's residents from owning firearms and defending themselves in their home. The legislation that we introduce today seeks to implement the Supreme Court's decision in District of Columbia v. Heller.

Specifically, the Second Amendment Enforcement Act would codify many of the laws the District of Columbia City Council has put in place in response to the Supreme Court's decision. For example, this legislation would codify the District's repeal of the semiautomatic ban and retain the District's ban on fully-automatic machine guns. The legislation would also codify the District City Council's law that prohibits the carrying of firearms into the District's public buildings that have implemented security measures and codify the Council's law regulating the carrying of rifles or shotguns.

The legislation would correctly restore the right of self-defense for any District resident in his or her home. Previously, the District had a requirement that any firearm kept in a home be stored in a manner that made it essentially useless for self-defense, e.g. kept ``unloaded and either disassembled or secured by a trigger lock, gun safe, locked box, or other secure device.'' The legislation would also clarify that landlords cannot prohibit firearms in rented homes or offices or dictate what firearms tenants may own.

Most egregious was the District's restrictions on the purchase of firearms and outright ban on the purchase of ammunition. At the heart of the Supreme Court's decision was that District residents must be able to own operable firearms for lawful purposes, which must then allow residents meaningful opportunities to purchase firearms and ammunition. Since the District does not have traditional retail gun shops and current federal law prohibits a person from purchasing handguns outside the person's State of residence, the legislation would amend Federal law to allow District residents the ability to purchase guns from federally-licensed dealers in Maryland and Virginia and then transport them back to their homes in DC. Let me be very clear on this point, this legislation would not allow residents of the District to buy firearms from anyone who is not a federally-licensed dealer, even at a gun show. I believe this is a very reasonable restriction and one that again, like much of this legislation, takes into consideration the concerns of the District's City Council.

Some may ask why a Senator from Arizona and a Senator from Montana would introduce legislation that impacts the lives of District residents. It is simple--we believe that residents across this country should have access to firearms to protect themselves, particularly in their own home or place of business. It is a constitutional right and one that was put in place by the Founding Fathers, recognized by the Supreme Court and cherished by many Americans. However, the District of Columbia City Council did not follow the Supreme Court's directive in fully updating their city's laws regarding firearms, and so now it is up to Congress to ensure that District residents' rights are respected by their government.

I hope my colleagues will join me in supporting this important legislation that will not only restore District residents' rights, but also ensure that no resident in any State, territory or the District is prevented from exercising his or her Second Amendment right.

Mr. President, I am proud to introduce the Second Amendment Enforcement Act today with Senator Tester. I have always supported Americans' Second Amendment rights and was pleased when the Supreme Court found in June 2008 that the District of Columbia had reached too far in restricting the District's residents from owning firearms and defending themselves in their home. The legislation that we introduce today seeks to implement the Supreme Court's decision in District of Columbia v. Heller.

Specifically, the Second Amendment Enforcement Act would codify many of the laws the District of Columbia City Council has put in place in response to the Supreme Court's decision. For example, this legislation would codify the District's repeal of the semiautomatic ban and retain the District's ban on fully-automatic machine guns. The legislation would also codify the District City Council's law that prohibits the carrying of firearms into the District's public buildings that have implemented security measures and codify the Council's law regulating the carrying of rifles or shotguns.

The legislation would correctly restore the right of self-defense for any District resident in his or her home. Previously, the District had a requirement that any firearm kept in a home be stored in a manner that made it essentially useless for self-defense, e.g. kept ``unloaded and either disassembled or secured by a trigger lock, gun safe, locked box, or other secure device.'' The legislation would also clarify that landlords cannot prohibit firearms in rented homes or offices or dictate what firearms tenants may own.

Most egregious was the District's restrictions on the purchase of firearms and outright ban on the purchase of ammunition. At the heart of the Supreme Court's decision was that District residents must be able to own operable firearms for lawful purposes, which must then allow residents meaningful opportunities to purchase firearms and ammunition. Since the District does not have traditional retail gun shops and current federal law prohibits a person from purchasing handguns outside the person's State of residence, the legislation would amend Federal law to allow District residents the ability to purchase guns from federally-licensed dealers in Maryland and Virginia and then transport them back to their homes in DC. Let me be very clear on this point, this legislation would not allow residents of the District to buy firearms from anyone who is not a federally-licensed dealer, even at a gun show. I believe this is a very reasonable restriction and one that again, like much of this legislation, takes into consideration the concerns of the District's City Council.

Some may ask why a Senator from Arizona and a Senator from Montana would introduce legislation that impacts the lives of District residents. It is simple--we believe that residents across this country should have access to firearms to protect themselves, particularly in their own home or place of business. It is a constitutional right and one that was put in place by the Founding Fathers, recognized by the Supreme Court and cherished by many Americans. However, the District of Columbia City Council did not follow the Supreme Court's directive in fully updating their city's laws regarding firearms, and so now it is up to Congress to ensure that District residents' rights are respected by their government.

I hope my colleagues will join me in supporting this important legislation that will not only restore District residents' rights, but also ensure that no resident in any State, territory or the District is prevented from exercising his or her Second Amendment right.

I ask unanimous consent to engage in a colloquy with my colleague from Arizona, Senator Kyl.

Mr. President, as is well known by my colleagues and most Americans, over the last several days, the Governor of Arizona signed legislation, which is controversial, which is designed to affect the issue of illegal immigrants into the country across the Arizona border. That legislation was enacted by the Arizona legislature and signed by the Governor because of the frustration the Governor and the legislation and, indeed, the majority of my constituents have over the Federal Government's failure to carry out its responsibility to secure our border. Many viewed this as a civil rights issue. There is no intention whatsoever to violate anyone's civil rights, but this is a national security issue. This is a national security issue where the United States has an unsecured border between Arizona and Mexico which has led to violence, the worst I have ever seen, and numbers that stagger those who are unfamiliar with the issue--such as 241,000 illegal immigrants were apprehended on the Tucson sector border of Arizona in the last year. Do the math. You have three to five times that number who actually cross, so we are talking about a million people crossing the border illegally.

This is not just a human smuggling issue. This is a drug issue. Our borders are unsecured, and the flow of drugs across the border is staggering. Last year in the Tucson sector alone, there were over 1.3 million pounds of marijuana apprehended, 1.3 million pounds on the Arizona border. The numbers of methamphetamine, cocaine, and other drugs crossing the border by the drug cartels is staggering. The Los Angeles Times reported last week that over 22,000 Mexican citizens have been killed in drug wars against the cartels. Have no doubt, this is an existential government between the Government of Mexico, the drug cartels, and the human smugglers who work together, and the security of the United States.

The violence has already spilled across our borders, and unless we get it under control, it will get worse. Three American citizens were murdered in Juarez, Mexico as they were trying to find their way home. A rancher in southern Arizona was murdered as he was out patrolling his own property. The people in southern Arizona have had their rights violated by the unending and constant flow of drug smugglers and human traffickers across their property. Their homes are being broken into. Their rights are being violated, their rights as American citizens to live in a safe and secure environment, as most of the pundits who are criticizing this legislation enjoy.

The fact is, our borders are broken. They are not secure. It is a Federal responsibility to secure our borders. It is not being done. Senator Kyl and I have a 10-point plan that can be enacted immediately in order to secure the borders and secure them quickly.

Before I ask my colleague to comment, there is a question about whether we can secure our borders. Of course, we can. We have seen in the Yuma sector of Arizona a dramatic decrease in illegal crossings and drug smuggling. Again, I want to mention to my friend from Arizona, have no doubt that this is not just a human smuggling problem and people trying to cross the border illegally to find work. This is a human smuggling cartel aligned with the drug cartels that are sending drugs across our border and killing our citizens. The cartels and the human smugglers are a direct threat to the security of this Nation. Two weeks ago a highly organized syndicate that takes people who are coming across our border illegally to Tucson, puts them in vans, taking them to Phoenix and distributing them all over the country. These individuals come from as far away as China.

Have no doubt of the extent of the problem, the organization, the cruelty, the barbarity of the challenge we face, of the drug cartels and the human smugglers that are just south of our border, and the State of Arizona has been bearing the brunt of it. The administration has failed to act. We need 33,000 Border Patrol agents down on the border. We need the National Guard, 3,000 troops. We need to take a number of other steps Senator Kyl and I will describe. This situation is the worst I have ever seen. It is time for the Federal Government to act. If you don't like the bill the legislature passed and the Governor signed in Arizona, then carry out the Federal responsibility to secure the border. You probably wouldn't have had this problem.

I have. If it was 241,000 last year that were apprehended, there are estimates that as many as five to one are not apprehended. So that could have been over a million people who crossed the Arizona border illegally in 1 year. That is staggering in itself.

May I ask unanimous consent, with the indulgence of my friend from Hawaii, for 3 additional minutes.

Could I also emphasize that the violence is worse than it has ever been. Mr. President, 22,000 Mexicans have been murdered on the Mexican border. American citizens have been murdered on our border. This is no longer a situation where someone from Mexico or some other country decides they want to cross our borders. These are highly organized, highly sophisticated, well-equipped, well-trained, armed cartels. Drug and human smuggling cartels coordinate with each other through these corridors. They have better communication than our enforcement agencies due to our lack of interoperability. They have sophisticated equipment. They are even sending drugs over using ultralights.

This is a struggle for the existence of the Government of Mexico. This is a struggle on our side of the border for the fundamental obligation any government has; that is, to provide its citizens with secure borders. Right now, our citizens are not safe, and therefore the Federal Government should be fulfilling its responsibilities to provide the necessary equipment and manpower to secure our borders. As my colleague from Arizona just pointed out, it can be achieved. It is now a massive failure on the part of the Federal Government. They should also fund it.

I thank my friend from Arizona, and I thank my colleague from Hawaii for his indulgence.

Madam President, I ask unanimous consent to extend morning business for up to 10 minutes.

I thank the Chair.