Floor Statements

Mr. President, I rise today to pay tribute to our colleague, our friend, and a great statesman, Senator Ted Stevens.

It is a somber day in the Senate Chamber as we continue to mourn his loss.

Senator Stevens' service to our Nation began during his military service during World War II as a ``Flying Tiger,'' and spanned six decades.

During his 41 years in the Senate, Senator Stevens has been chairman of four full committees and two select committees, assistant Republican whip, and the President pro tempore Emeritus.

As one of the most effective Senators, Senator Stevens was an ardent supporter of our national defense, serving as either Chairman or Ranking Member of the Defense Appropriations Subcommittee from 1980 to 2005. A champion of our Armed Forces, he ensured that our servicemembers have the equipment, training, and pay necessary to be prepared to take on those who threaten our national security.

Senator Stevens was not only my distinguished colleague but someone I considered a friend. He was a man of purpose whose life touched all those with whom he came in contact. His commitment to the people of Alaska was remarkable, making him a legendary advocate for the State. No one has done more for Alaska than he did. His many contributions to both Alaska and our Nation will not soon be forgotten.

He will be remembered as a dedicated American, World War II warrior, a public servant, and the quintessential American statesman who gave so much of his life in service to the Nation.

I offer my thoughts and prayers his family and friends during this difficult time.

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I rise today in opposition to the nomination of Solicitor General Elena Kagan to the U.S. Supreme Court.

Upon President Obama's nomination of Ms. Kagan, I stated that I would base my decision on what I could ascertain about her judicial philosophy from other components of her record, in light of her lack of judicial experience. What little information she offered during her confirmation hearings did not accrue to her credit, in my judgment.

I am unconvinced that the hostility Ms. Kagan demonstrated toward the second amendment as clerk to Justice Marshall, counsel for the Clinton sdministration, and as Solicitor General under President Obama has changed or would not drive her legal opinions on the matter.

Ms. Kagan has spent her career implementing antigun initiatives and evidence of her antagonistic attitude towards the second amendment can be found from the beginning of her legal career.

As a U.S. Supreme Court law clerk in 1987, Ms. Kagan stated she was ``not sympathetic'' toward a man who contended that his constitutional rights were violated when he was convicted for carrying an unlicensed gun. Think about that.

In a memorandum to Justice Marshall regarding Sandidge v. United States, Ms. Kagan wrote that Mr. Sandidge's ``sole contention is that the District of Columbia's firearm statutes violate his constitutional rights to keep and bear arms.' I'm not sympathetic.'' She recommended that the Supreme Court not even hear the case, thereby allowing Mr. Sandidge's conviction to stand.

When Ms. Kagan served as a political adviser to President Clinton, she played a key role in the gun control efforts that were a trademark of the Clinton administration. Ms. Kagan took a lead role in a series of efforts to respond to the Supreme Court's 1997 ruling in Printz v. United States, which struck down parts of the 1993 Brady handgun law.

Ms. Kagan drafted proposals that would have effectively prohibited the sale of guns without action by a ``chief law enforcement officer.'' She authored a draft executive order requiring ``all federal law enforcement officers to install locks on their weapons'' and one to restrict the importation of certain semiautomatic rifles. Ms. Kagan drafted two memorandums in 1998 that advocated for policy announcements on various gun control proposals, including ``legislation requiring background checks for all secondary market gun purchases,'' and a ``gun tracing initiative.''

As Solicitor General for President Obama, Ms. Kagan failed to find a Federal interest in the McDonald v. Chicago case and did not even file a brief in the case.

Assaults on the second amendment will not end with the McDonald v. Chicago ruling. Therefore, the overarching question remains will Ms. Kagan's attitude as a Supreme Court Justice radically change from her clear and extensive anti-second amendment record?

I firmly believe the right to bear arms is a fundamental right. This has been enunciated through the courts. I do not believe Ms. Kagan's political record and prejudiced background in opposition to the second amendment shows that she is prepared to uphold this core constitutional guarantee as a Supreme Court Justice.

In fact, Ms. Kagan's record has demonstrated a disregard for those laws and constitutional rights she disagrees with. This is also clearly evidenced in her affront to our men and women in the military. I will explain.

As a vocal critic of the military's don't ask, don't tell policy, Ms. Kagan barred military recruiters from Harvard's campus during her time as dean of Harvard Law School. She made her personal feelings unmistakable by repeatedly stating that she abhorred the military's don't ask, don't tell policy, calling it a ``moral injustice of the first order.''

By barring recruiters, Ms. Kagan's actions violated the Solomon Amendment, which requires that the military receive equal access to that of other employers on campus or jeopardize their Federal funding. Ms. Kagan joined a brief before the Supreme Court arguing that Harvard should be able to keep military recruiters off campus but still receive Federal funds--although that was in violation of the law.

She refused to permit ordinary campus access to military recruiters during a time of war, yet still wanted to cash in on Federal funding.

This position was unanimously rejected in 2006, with the Supreme Court stating that this was clearly not what Congress intended.

I find it ironic that we are asked to replace the only Justice with wartime experience with a nominee who willingly obstructed our military during a time of war.

It is unacceptable to limit the ability of our Armed Forces to recruit on campus at a time when the United States is fighting two wars.

I have serious concerns about her actions against the military and her willingness to prevent access to potential recruits during a time of war.

This incident illustrated her liberal agenda superseding her professional judgment.

I have highlighted only two issues of many that exemplify Ms. Kagan's well-defined political record. Put simply, she is a political activist, not a jurist.

Throughout her confirmation hearings, she failed to explain where her political philosophy ends and her judicial philosophy begins.

Mr. President, we need a legal mind on the Supreme Court, not a political one.

We need an impartial arbiter, not a partisan political operative.

Therefore, I firmly oppose Ms. Kagan's nomination to be an Associate Justice on the Supreme Court.

Madam President, who controls the time?

Madam President, I rise to oppose the Landrieu amendment. Only 1 day after the President signed the Dodd-Frank financial regulation bill into law, at that time proclaiming an end to taxpayer- funded bailouts, we find ourselves debating another bailout bill on the floor of the Senate. Just last week, we were told by the majority that the mere passage of Dodd-Frank would help revive our damaged financial system.

The bill was heralded as a thoroughly considered and comprehensive piece of legislation that would restore confidence in our financial system and revive our economy. What a difference a day makes.

If Dodd-Frank is really going to revive our economy, why do we need this bill? I think the answer is clear: The majority knows the Dodd- Frank legislation is going to reduce lending and undermine economic growth by imposing more regulations and taxes on banks. They know, I believe, that Dodd-Frank will do nothing to increase the availability or reduce the cost of loans to small businesses. But, rather than create a new regulatory system to strengthen our private sector, the majority decided to expand significantly the old system, thereby increasing the regulatory burden on American businesses--small, medium, and large.

I believe this is the same old song and dance: expand the reach of the heavy hand of government, increase taxes and the cost of doing business, and then complain that the private sector is not working. We have heard this before. Once the American business owner is sufficiently encumbered, the only alternative must be a brandnew big government program, such as envisioned here. How do we pay for this new ``necessary'' government program? We borrow money from future generations. Does that sound familiar to people here in the Senate?

This amendment is intended to help small businesses--a goal we can all support. Yet, in practice, the legislation would create a second TARP. Remember TARP? A lot of people wish they had not voted for it. Like TARP, this program does not lend money directly to small businesses. It would have the government take ownership interest in hundreds of banks and then require that they make loans. This is TARP II. In fact, banks could replace original TARP money with funds received from this program.

As I said, just 1 day after the enactment of Dodd-Frank, which contained a provision to speed up termination of TARP, we are voting on an amendment to extend TARP for at least another 10 years.

To force banks to participate in this program, this legislation would subsidize bank financing. Banks would generally pay dividends on the government equity investments at rates ranging from 1 to 5 percent. The current market yield on such investments, however, is between 7 and 8 percent. Hence, any bank that chooses not to participate could find itself at a competitive disadvantage. Moreover, this legislation forces taxpayers to what? Subsidize banks once again. In effect, we are taxing small business owners to pay banks to lend to small businesses. Even worse, the government's equity investments would be subordinated to all of a bank's existing debt. As a result, if a bank fails, existing creditors would get paid before the government, and taxpayers again would take the hit. I believe American taxpayers have lost their appetite for bank bailouts.

Finally, I also want to note that the legislation appears to exempt loans made under this program from existing underwriting regulations. The bank regulator would then have the authority to decide what types of underwriting standards apply to these loans. I believe this raises at least two issues. First, if the multitude of regulations required by Dodd-Frank are really necessary, why does this bill provide a carve-out for loans made under this program? Second, what statutory protections are there to ensure these loans are underwritten in a safe and sound manner so we do not create hundreds of new Freddies and Fannies? The answer, sadly, is none.

This legislation would continue the majority's assault on American business by having the government dictate how and to whom loans are made. Each participating bank would have to provide the government with a business plan for review. Rather than having loans approved based on the creditworthiness of a borrower, politics will now play a role. We should let the market, not bureaucrats, decide which businesses get loans. Unfortunately, the majority party is once again sacrificing our core economic values for a short-term economic gain.

The lack of credit for small business is a problem that needs to be addressed. I fully support the Banking Committee examining the issue and hope Chairman Dodd would consider holding a hearing on this issue. I think it is very important. It is relevant, and it should come out of the committee. I do not, however, believe we should try to solve this problem with another expensive and bureaucratic government program. TARP II is something we do not need and I hope will not be supported in the Senate.

Mr. President, today I wish to pay tribute to Sonya Damsker Lefkovits, who is being honored by the Columbiana Chamber of Commerce for her dedication and service to her community.

Sonya was born May 6, 1923, in Memphis, TN, to Louis and Helen Richberger Damsker. Raised in Tyler, TX, Sonya graduated from Tyler High School and went on to attend Louisiana State University, where she earned a degree in public school music. Following her graduation at LSU, Sonya moved to Birmingham to work at the Jewish Welfare Board as its first activities director. It was there that she met her future husband, Norman Leo Lefkovits.

In July, 1947, Sonya married Norman Leo Lefkovits, and she moved to Columbiana to operate the Lefkovits family mercantile store, The Columbiana Leader. Since arriving in Columbiana, AL, nearly 63 years ago, Sonya has been an integral member of her community. In 1949, she became a charter member of the Vignette Club, which gave her the opportunity to participate in various community projects. Among her proudest achievements was working on the building committee during the construction of the Columbia Library when she was chairman of the Columbiana Library Board.

Sonya has also held various community leadership positions. She was a member of the Shelby County High School Band Boosters Club, the womens coordinator for the Columbiana Civil Defense Organization, and cochairman of the Shelby County Civil War Centennial Commemoration. Sonya was an active member of the Shelby County Historical Society. In 1999, Sonya helped to form the Columbiana Merchants and Professional Association, where she worked on the Columbiana Downtown Renovation Committee. She also served as an ambassador to the South Shelby Chamber of Commerce.

Sonya has two children, Norman Leo Lefkovits, Jr. and Marsha Phyllis Lefkovits, both of whom now reside in California. In the early 1980s, Marsha

served with distinction as a member of my staff in Washington, DC. Soon, Sonya will be leaving Columbiana to join her children on the west coast.

I am sure that Sonya will be sorely missed in Columbiana, whose residents will reap the benefits of her contributions to their community for years to come. Regardless of where she resides, I know that she will continue to touch the lives of everyone fortunate enough to meet her.

I wish Sonya luck on her journey west, and I ask this entire Senate to join me in recognizing and honoring the life and career of my good friend Sonya Lefkovits.

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

Madam President, I rise today to offer some remarks on the Dodd-Frank regulation conference report, which is now before the Senate.

Nearly 2 years ago, the financial crisis exposed massive deficiencies in the structure and culture of our financial regulatory system. Years of technological advances, product development, and the advent of global capital markets rendered the system ill-suited to achieve its mission in the modern economy. Decades of insulation from accountability distracted regulators from focusing on that mission. Instead of acting to preserve safe and sound markets, the regulators primarily became focused on expanding the scope of their bureaucratic reach.

After the crisis, which cost trillions of dollars and millions of jobs, it was clear that significant reform was necessary. Despite broad agreement on the need for reform, the majority decided it would rather move forward with a partisan bill. The result is the 2,300-page legislative monster before us that expands the scope and the power of ineffective bureaucracies. It creates vast new bureaucracies with little accountability and seriously undermines the competitiveness of the American economy.

Unfortunately, the bill does very little to make our financial system safer. Therefore, I will oppose the Dodd-Frank bill and urge my colleagues to do the same.

This was not a preordained outcome; it is the direct result of decisions made by the Obama administration. Had they sincerely wanted to produce a bipartisan bill, I have no doubt we could have crafted a strong bill that would garner 80 or more votes in the Senate. If the American people haven't noticed by now, that is not how things work under the Democratic rule.

Unfortunately, the partisan manner in which this bill was constructed is not its greatest shortcoming. One would have assumed that the scope of the crisis--trillions of dollars lost and millions of jobs eliminated--would have compelled the Banking Committee to spend the time necessary to thoroughly examine the crisis and develop the best possible legislation in response. Unfortunately, such an assumption would be entirely unfounded. The Banking Committee never produced a single report on or conducted an investigation into any aspect of the financial crisis.

In contrast, during the Great Depression, the Banking Committee set up an entire subcommittee to examine what regulatory reforms were needed. The Pecora Commission, as it came to be known, interviewed, under oath, the big actors on Wall Street and produced a multivolume report.

Unfortunately, this time around, the Democratic-run committee gave Wall Street executives a pass, I believe. There were no investigations, no depositions, and no subpoenas. In fact, Chairman Dodd, my friend and colleague, never called on the likes of

Robert Rubin and Lloyd Blankfein to testify before the Banking Committee. Not a single individual from AIG's financial products division was questioned by the committee or its staff. Although Congress did establish the Financial Crisis Inquiry Commission to do the work that the majority party, I believe, refused to do, the Commission's work will not be completed until the end of this year.

Most amazingly, the Banking Committee didn't even hold a single hearing on the final bill before its markup. The committee never took the time to receive public testimony or survey experts about the likely outcomes the legislation would produce. We know the majority heard from Wall Street lobbyists, government regulators, and liberal activists, but they clearly decided they did not want the American people to have a chance to understand and comment on the bill before us today before it was enacted. The question is, Why? The majority knows that this bill is a job killer and will saddle Americans with billions of dollars in hidden taxes and fees. Allowing the public to weigh in on this bill would have spelled the end of the Democratic version of reform. I believe we owed more to those who lost their jobs, their homes, and their life savings. I believe this truly was a missed opportunity.

The difference between what we needed to do, what we could have done, and what the majority has chosen to do is considerable. I will speak on this.

Congress could have focused this legislation on financial stability. It could have utilized the findings of the Financial Crisis Inquiry Commission. Instead, the Democratic majority chose to adopt legislative language penned by Federal regulators in search of expanded turf. They chose to legislate for the political favor of community organizing groups and liberal activists seeking expansive new bureaucracies that they could leverage for their own political advantage. The result is an activist bill that has little to do with the recent or any crisis and a lot to do with expanding the government to satisfy special interests.

Congress could have written a bill to address the problem of too big to fail once and for all. In fact, the Shelby-Dodd amendment began to address this problem right here on the floor. Unfortunately, the Democrats once again overreached at the eleventh hour and undermined the seriousness of our effort by emphasizing social activism over financial stability. Democrats insisted that the overall financial stability mission of the Financial Stability Oversight Council was less important than the political needs of certain preferred constituencies. This dangerous mixing of social activism and financial stability follows the exact same model that led us to the crisis in the first place; that is, private enterprise co-opted through political mandates to achieve social goals. Fannie and Freddie proved this combination can be highly destructive.

Congress could have written legislation to address key issues known to have played a key role in the recent crisis. On the government- sponsored enterprises, Fannie and Freddie, the bill is silent, aside from a mere study. On the triparty repo market, the bill is silent. On runs in money markets, the bill is silent. On the reliance of market participants on short-term commercial paper funding, the bill is silent. On maturity transformations that allowed the shadow banking system to effectively create money out of AAA-rated securities, thereby making the system much more vulnerable, the bill is silent. On the financial system's overall vulnerability to liquidity crises, the bill again is silent. We know with certainty that all of these factors--none of which is addressed in the bill--were integral to the recent financial crisis. While we don't want to write legislation that only deals with the last crisis, we do want to enact a law that addresses what we know were systemic problems. This bill fails to do so.

Congress could have written a bill to streamline regulation and eliminate the gaps that firms exploit in a race to the regulatory bottom. This bill does the opposite by making our financial regulatory system even more complex. We will still have the Fed, FDIC, SEC, CFTC, OCC, and the remainder of the regulatory alphabet soup. In fact, most of the existing regulators that so recently failed us have been given expanded power and scope. This bill will also add new letters to the already-confused soup, such as the CFPB and the OFR. In addition to increased regulatory complexity, there will be new special activist offices within each regulator for almost every imaginable special interest.

Congress could have set up reasonable new research capabilities in its new Stability Oversight Council to complement financial research performed by the Federal Reserve and others. Instead, the Democrats decided to establish the Office of Financial Research with an unconstrained director and a focus on broad information collecting and processing.

I believe this office will not only fail to detect systemic threats in the asset price bubbles in the future, it will threaten civil liberties and the privacy of Americans, waste billions of dollars of taxpayer resources, and lull markets into the false belief that this new government power will protect the financial system from risky trades.

Congress could have been transparent in identifying the bill's fiscal effects and costs. Instead, the majority wrote a bill that hijacks taxpayer resources but hides that fact from public view. Just as the administration refuses to acknowledge trillions of dollars of contingent taxpayer liabilities residing with Fannie and Freddie, this bill refuses to provide Americans with a transparent view of the costs of the new multibillion-dollar consumer protection bureaucracy.

According to the report on the bill offered by the majority, the consumer bureaucracy's budget is ``paid for by the Federal Reserve System.'' Make no mistake, ``paid for by the Fed'' means paid for ultimately by the taxpayers.

Taxpayers will be on the hook for billions of dollars of unchecked, unencumbered, and unappropriated spending financed by the inflationary money printing authority of the Federal Reserve which will be hidden from the American people in the arcane Federal budget.

Congress could have also used this legislative opportunity to begin the process of reforming the failed mortgage giants Fannie and Freddie, whose ever growing bailouts have no upper limit. When it became clear that this was not the intention of the Democrats, Republicans sought to address the current and worsening conditions of the GSEs.

We suggested establishing taxpayer protections, such as portfolio caps, on the mortgage giants. We recommended making the cost of Freddie and Fannie bailouts transparent to the public; that is, to the taxpayer. We offered initial steps toward the inevitable unwinding of these failed institutions. Yet at every turn, the Democratic majority blocked Republican efforts to establish at least a foundation for reform.

The Democratic-preferred approach in this bill to reforming the mortgage giants is a study. Let me repeat that notion. In order to address a bailout that has already cost American taxpayers roughly $150 billion to date, with unlimited future taxpayer exposure, the Democrats propose a study. It does not take a study to determine that $150 billion in unlimited loss exposure needs to be addressed immediately-- now.

Congress could have focused on securities market practices that were known to have contributed to systemic risks in our financial system. Instead, Democrats overreached once again.

For example, the bill gives the Securities and Exchange Commission, which has failed to carry out its existing mandates, a new systemic risk mandate to oversee advisers to hedge funds and private equity funds. Yet no one contends private funds were a cause of the recent crisis or that the demise of any private fund during the crisis resulted in a systemwide shock.

Congress could have acted to curtail Wall Street's speculative excesses and enhance Main Street's access to credit. But instead, in this bill large financial firms on Wall Street seem to have benefited, judging by the behavior of the stock prices, while the legislation almost surely will increase uncertainties and costs for Main Street and America's job creators.

The actual provisions in the bill will benefit big Wall Street institutions because they substantially increase the amount and cost of financial regulation. Only large financial institutions will have the resources to navigate all

of the new laws and regulations that this legislation will generate. As a result, this bill, disproportionately will hurt small and medium- sized banks which had nothing to do with the crisis.

While the largest financial institutions will get special regulation under this bill, the unintended result will be lower funding costs for these firms. That will benefit the big banks and hurt the small banks. Therefore, this bill will result in higher fees, less choice, and fewer opportunities to responsibly obtain credit for blameless consumers.

Moreover, this bill raises taxes which, as we all know, are ultimately borne by consumers. Make no mistake, when Wall Street writes a check to pay its higher taxes, the ones who end up paying those taxes are American consumers and workers.

Congress could have written legislation for consumer protection that respects both American consumers and the need for safety and soundness in our financial system.

Instead, the Dodd-Frank bill was basically constructed by architects in the Treasury Department who have a certain condescension for American consumers and their choices.

The ultimate goal is to substitute the judgment of a benevolent bureaucrat for that of the American consumer, thereby controlling consumer behavior without regard for the safety and soundness of our banking system.

The American people are being told not to worry, however, because it is all being done for their own good.

While a consumer protection agency might sound like a good idea, the way it is constructed in this bill will slow economic growth and kill jobs by imposing massive new regulatory burdens on businesses, large and small. It will stifle innovation in consumer financial products, and it will reduce small business activity. It will lead to reduced consumer credit and higher costs for available credit.

Less credit at higher price will dampen the very small business engines of job creation that our economy desperately needs right now. That is a price I am not willing to pay.

Congress could have implemented reforms to improve derivatives market activities. Instead, the bill's derivatives title seems to be inspired by a desire to be punitive or to provide short-term political support during an election, or both. Instead of imposing a rational and effective regulatory framework on the OTC derivatives market, the bill runs roughshod over the Main Street businesses that use derivatives to protect themselves every day.

The Dodd-Frank bill will increase companies' costs and limit their access to risk-mitigating derivatives without making our financial system safer in the process. As a result, there will be fewer opportunities for businesses to grow, fewer jobs for the unemployed, and higher prices for consumers.

Congress could have written a bill to put an end to overreliance on credit agencies and underreliance on their own due diligence. Instead, the Dodd-Frank bill sets up new regulations and liability provisions to give the impression that ratings are accurate. It then takes a contradictory direction and instructs regulators to replace references to ratings with other standards of creditworthiness.

To make matters even more confusing, the bill also provides for the establishment of a government-sponsored body that will select a credit rating agency to perform an initial rating of a security issue.

I anticipate the net effect of these conflicting provisions will be a reduction of competition among credit rating agencies. Potential competitors either will be deterred by all of the new regulatory requirements or be destroyed by the liability provisions set up in the bill. The lack of competition led to poor quality ratings in the runup to the crisis. This bill perpetuates and, in fact, worsens that problem.

Congress could have eased regulatory burdens on small and medium- sized businesses not integral to the recent crisis or any crisis. Instead, Main Street corporations will be subject to a panoply of new corporate governance and executive compensation requirements.

These new requirements will be costly and potentially harmful to shareholders because they empower special interests and encourage short-term thinking by managers. These features were included solely for the purpose of appeasing unions and other special interest lobbyists, and there is no demonstrated link between these changes and the enhanced stability of our financial system or improved investor protection.

We are getting toward the end. Congress could have held hearings or analyzed a number of changes this bill makes to the securities laws. Instead, dramatic changes in those laws were written with little discussion and no analysis.

Throughout this process, there has been a lot of talk about the influence of Wall Street over this bill. To be sure, in the early stages of the negotiations, Wall Street and the big banks were very engaged.

I think the American people know, however, that in the end, the real influence peddlers on this bill were not Wall Street lobbyists but rather liberal activists and Washington bureaucrats. Wall Street and the big banks just happen to be the incidental beneficiaries of their success.

When Chairman Dodd and I began this process, we agreed that the bureaucratic status quo was unacceptable and that radical change was necessary. With that in mind, we agreed to consolidate all the financial regulators and constrain the Fed to its monetary policy role.

This was not a result the big banks wanted. The last thing a large regulated financial institution wants is a new regulator. After all, they spent years and millions of dollars developing a relationship with our current regulators.

A major regulatory reorganization would seriously upset the status quo and cost them a great deal of money. Neither Chairman Dodd nor I were persuaded, however. Change was necessary and change was going to come.

Unfortunately, that vision of reform began to die as the bureaucrats and the liberal left began to exercise their influence over the bill. When it became apparent that I was not willing to embrace the left's expansive consumer bureaucracy, it also became apparent that actual regulatory reform was not what the majority was seeking.

All other serious reform was scuttled by the Democrats in defense of the new consumer bureaucracy. That was the point at which Chairman Dodd and I began to seek a new negotiating partner, ultimately to no avail.

As the Fed and the other regulators began to regain their foothold with the Democrats and the administration and the activist left consolidated its support around an expansive new bureaucracy, all the Democrats will succeed in doing, with the help of a few Republicans, is give the failed bureaucracies more power, more money, and a pat on the back with the hope they will do a better job next time.

That is not real reform. That is just more of the same.

We had an opportunity to lead the world by creating a modern, efficient, and competitive regulatory structure that will serve our economy for years to come. Instead, I believe we squandered that opportunity by barely expanding our obsolete, inefficient, and uncompetitive system. To make it even worse, they have added to the bureaucratic morass several more unrestrained and unaccountable agencies.

It became apparent early on to me that the administration and the Democratic majority were not interested in regulatory reform. All they were trying to do is exploit the crisis in order to expand government further and reward special interests.

The Dodd-Frank bill will not enhance systemic stability. It will not prevent future bailouts of politically favored institutions and groups by the government.

The bill serves only to expand the Federal bureaucracy and the government control of the private sector. It will impose large costs on the taxpayers and businesses.

For these reasons, I urge my colleagues to reject this bill.

Mr. President, I wish to pay tribute to Cedric Erroll Flowers, Jr., my dear friend who passed away on May 25, 2010.

Cedric was born and raised in Sumter County, AL, where he attended Demopolis High School. There, he developed an interest in English literature and world history, as well as a passion for music. He devoted his ample talents to the piano and the clarinet, the latter of which he played for the Demopolis High School concert band. This is remarkable given his failing, and eventual loss of, eyesight. Despite his blindness, Cedric excelled in high school.

Following graduation from Demopolis High School in 1951, Cedric enrolled at the Alabama Institute for the Deaf and Blind where he pursued his love of music. Without eyes to guide him, Cedric studied and mastered the art of piano tuning by ear. It was also at the Alabama Institute for the Deaf and Blind where he met Sue Akel, whom he would later marry in 1962.

After earning his degree from the Alabama Institute for the Deaf and Blind, Cedric took his newly acquired skills to Savannah, GA, where he cared for all the pianos within the Chatham County and Savannah City Schools. In 1954, he came back to Alabama where he performed this same invaluable service for the concert series program at my alma mater, the University of Alabama.

In 1964, Cedric opened his own business, Flowers Piano Company. Known as the ``People Who Know Pianos,'' Flowers Piano Company began as a specialty piano retail store and a service-based enterprise. For many years, Cedric, who was also instrumental in founding the Tuscaloosa Music Merchants Association, served as the exclusive local dealer of high-end pianos in the Tuscaloosa area. As his business flourished, Cedric expanded the store's inventory to include band instruments and sheet music and offer beginner piano lessons.

Cedric's passion for tending to pianos did not cease with the establishment of his company. His skills as a Master Concert Tuner/ Technician served the Piano Technicians Guild and the National Association of Music Merchants well. In fact, while continuing to serve and provide equipment to the University of Alabama, he worked with artists and musical groups who performed in and around Tuscaloosa and Birmingham. His expertise and precision benefitted music and entertainment throughout Tuscaloosa and Jefferson Counties.

Cedric also served the Tuscaloosa community as a deacon at the First Presbyterian Church of Tuscaloosa and a volunteer for many music and art-related endeavors and causes.

A faithful member of the University of Alabama family, Cedric never missed game day play-by-play radio coverage of the Crimson Tide. I can only imagine how happy he was to hear the sweet sound of the Million Dollar Band playing ``Yea, Alabama'' in the Rose Bowl following the Tide's BCS National Championship victory this past January.

I was fortunate to have known Cedric during his time here, and I mourn his passing. He is loved and respected throughout our community and will be missed by his beloved wife of 47 years, Sue, and his daughter, Marcia. I ask the entire Senate to join me in recognizing and honoring the life of my friend, Cedric Erroll Flowers, Jr.

Mr. President, I rise today to speak in strong support of the conference report to accompany the Comprehensive Iran Sanctions, Accountability, and Divestment Act. I want to thank my colleagues, Chairman Dodd, and House Foreign Affairs Chairman Howard Berman and Ranking Member Ileana Ros-Lehtinen for working cooperatively to complete work on this conference report.

There is general agreement that the existing Iran Sanctions Act has not worked either in practice or in its intent to stop Iran's nuclear program or its support of terror. Iran, today, is a more dangerous rogue state than ever before.

Though not a silver bullet, the Comprehensive Iran Sanctions, Accountability, and Divestment Act is undoubtedly one of the toughest sanctions measures that Congress has produced and promises to be more effective than current law.

The act continues to prohibit investments of $20 million in Iran's energy sector, but now we have closed an earlier investment loophole that allowed for sales of petroleum-related goods, services, and technology to Iran.

The act also broadens the categories of transactions that trigger sanctions to include sales to Iran of refined petroleum products and prohibits any assistance to Iran to either increase or maintain its domestic refining capacity.

In addition to the existing menu of six sanctions, we have established three new sanctions on foreign exchange, access to the U.S. banking system, and against property transactions. Under current law, the President must choose two from a menu of six sanctions. He now must impose at least three of the nine sanctions.

Despite dozens of credible reports of investment violations over successive administrations, there has been but one Presidential determination of a violation made 12 years ago. In that particular instance, the President waived the imposition of sanctions.

This act will put an end to that practice. The sanctions regime will now require the President to investigate a report of sanctionable activity and make a determination whether a violation has occurred. That determination must be reported to Congress and if a violation has occurred, the President must impose sanctions or give the specific reasons why a waiver of the sanctions is necessary. Prior law merely authorized a President to investigate. It did not require a President to investigate or make a determination if he chose to investigate.

A brand new mandatory financial sanction imposes severe restrictions on foreign banks doing business with Iranian banks or the IRGC--Iranian Revolutionary Guard Corps--and its affiliates, which are increasingly seen to command vital sectors of the Iranian economy.

The act also establishes a legal framework for States and local governments and a safe harbor for fund managers to divest their portfolios of foreign companies involved in Iran's energy sector. We have also created a system to address black market diversion of sensitive technologies to Iran through other countries.

In order to accommodate the President's constitutional authorities in the conduct of foreign affairs, we have had to preserve the prior construct of waivers and exceptions to these sanctions throughout the act. We have tried, however, to give the President as narrow an opening as possible for diplomatic delays. Even though the window for delay remains slightly open, this legislation is a vast improvement over prior law, and ensures that the President must make a determination to impose sanctions or provide Congress with a timely and written rationale for any delays or waivers.

During the conference process, the administration insisted that we include a so-called closely cooperating countries exemption. Such an exemption would spare a country and its firms from any public risk to reputation and imposition of sanctions because an exemption, as opposed to a waiver, allows the country in question to avoid the specter of an investigation altogether.

Instead, an already existing waiver for countries that cooperate with the United States in multilateral efforts to prevent Iran from acquiring nuclear weapons technology was modified to give a country and its firms, on a case-by-case basis, more time to cure their behavior.

This waiver for cooperation can only be used, however, after the President first initiates an investigation, makes his determination whether sanctionable activity exists, and then certifies to Congress who would get the waiver. He must then explain exactly what actions that particular government is taking to cooperate with multilateral efforts and why the waiver is ``vital to the national security interests of the United States.''

Once enacted, this law will allow the Treasury Department to put key companies and countries on notice that the clock is running, investigations are to begin immediately, and there is little room to avoid determinations of potential violations. In other words, there is no place left to hide.

Once again, nothing that we have done in this conference report will curb Iran's nuclear ambitions. But, targeting Iran's oil and gas sectors will certainly raise the stakes for Iran's leaders, perhaps enough for them to consider confining their nuclear ambitions to peaceful uses.

Mr. President, today I honor Coach Gene Stallings, who will be inducted into the College Football Hall of Fame on July 18, 2010.

Eugene Clifton Stallings was born March 2, 1935, in Paris, TX. As a young man, Gene was an accomplished athlete who demonstrated his natural leadership as the captain for the Paris High School football, baseball, and golf teams. Whether on the gridiron, the diamond, or the links, his abilities were readily apparent. These talents coupled with a tireless work ethic earned him a football scholarship at Texas A&M University, where he would play end for Coach Paul ``Bear'' Bryant.

At Texas A&M, Stallings would ultimately help the Aggies bring a Southwest Conference Championship back to College Station. But the road to victory was paved with hardship, and it ran through Junction, TX.

When Bryant first signed on as the head coach for Texas A&M's football team in 1954, more than 100 players were listed on the Aggies' roster. What players were left after a grueling spring and summer regimen attended a preseason camp at an adjunct campus in Junction. After 10 days of practicing during a record Texan drought and heat that at times reached 100 degrees Fahrenheit, less than 40 players remained to take the field as the 1954 Aggies. Gene Stallings was among the strong that survived and have since been known simply as the Junction Boys.

The Junction Boys returned to campus stronger, with a clearer sense of purpose and unity. Though their success was not immediate--the 1954 Aggies won only one game--they persevered. These men, forged in the Texas heat, kept working through these setbacks and losses.

The Aggies would finish the 1956 season as undefeated Southwestern Conference Champions, thanks in no small part to the resolve of the Junction Boys that lead that team. They demonstrated the truth of the Bear's simple philosophy: ``the price of victory is high, but so are the rewards.''

Stallings finished his playing career after the 1956 season, but his football

career was far from over and would soon flourish. He followed Bryant to the University of Alabama in 1958 and served as an assistant coach for the 1961 and 1964 National Championship teams. After helping restore the winning Tradition of the Crimson Tide, Coach Stallings returned to his alma mater, where he would lead the Aggies to another Southwestern Conference Championship in 1967.

Stallings left College Station for the Dallas Cowboys in 1972. After 18 years in the NFL, he returned to the Capstone to lead the Crimson Tide back atop the elite of college football yet again.

In 1992, Coach Stallings' Crimson Tide, led by a stifling defense and a workhorse offense, won the inaugural Southeastern Conference Championship game and the National Championship in classic wins over the University of Florida Gators and the University of Miami Hurricanes. Scenes from these great moments in Crimson Tide history are to this day replayed before each and every game at Bryant-Denny Stadium.

In November of 1996, and after coaching the Crimson Tide to seventy victories in 7 years, Stallings announced that he would retire from football for the one thing that he loved more: his son John Mark Stallings. John Mark was born with Down syndrome and was not expected to live past the age of four. He lived 46 years, proving that uncommon strength is a common trait in the Stallings household.

Though he was greatly missed at the Capstone, it was not hard to understand why Coach Stallings left for his son. John Mark, himself, was much beloved by the Crimson Tide family. The equipment room at the football complex is even named in his honor. John Mark was known for his ability to positively impact the people around him with his kind nature and genuine interest in their lives. After his passing, athletics director Mal Moore stated that ``For someone who never played or coached a game, I think John Mark may have touched more Alabama fans than any other person ever did.''

By anyone else's standards, Coach Stallings' time in Tuscaloosa was his most successful, but Stallings doesn't measure success in wins, trophies, and championships. He measures his success by the lives that he has positively affected. As a football coach, he did so by instilling the values of character, discipline, and integrity in young men. He did just that at every stop on his coaching path, and, even after football, he continues to succeed in affecting his community and our Nation.

John Mark inspired his father to advocate on behalf of persons with disabilities. Coach Stallings worked to start a golf tournament to benefit the Arc of Tuscaloosa County, a local nonprofit organization devoted to helping the intellectually and developmentally disabled. This tournament raised more than $1 million for the program by the time he left Tuscaloosa in 1996.

Stallings has also been a prolific fundraiser for the RISE School at the University of Alabama, which provides family-oriented services to children with developmental disabilities. When he returned to the Capstone, the RISE School had devoted educators and a special cause, but the underfunded program languished in subpar facilities. RISE's staff worried that each year would be their last.

The value of RISE was not truly known nor its potential realized until Coach Stallings came on the scene. Following a 2-year capital campaign, the RISE School moved to a state-of-the-art building with six classrooms that serve more than 80 students. This beautiful building on the Alabama campus is named the Stallings Center in honor of Coach Stallings' tireless efforts on RISE's behalf, and John Mark is remembered at the school's playground, which is named for him.

With John Mark's inspiration and Coach Stallings' signature work ethic, the RISE program spread from Tuscaloosa to Austin, Corpus Christi, Dallas, Houston, Denver, and Stillwater. Today, families across the country can receive early intervention services for their young children with disabilities. The dedicated teachers and administrators of the RISE program teach these children what they can do, rather than what they cannot.

For enduring the trials of Junction, for passing on these lessons of character, and for helping to grow a culture that embraces and encourages persons with disabilities, Eugene Clifton Stallings has certainly proven himself worthy of being immortalized in the College Football Hall of Fame.

On behalf of the University of Alabama, the Crimson Tide faithful, and the whole of the great State of Alabama, I thank Coach Stallings for his contributions to my alma mater and our community. We are truly fortunate for the examples he has set as a player, coach and philanthropist.

I yield back time, and I ask for the yeas and nays.

Mr. President, at the appropriate time I will ask for amendments Nos. 4242 and 4287 to be called up for consideration.

I ask unanimous consent that Senator Landrieu be added as a cosponsor on amendment No. 4242, and Senator LeMieux be added as a cosponsor on amendment No. 4287.

Mr. President, it is now day 37 of the oil spill. We are no closer to finding a solution to this crisis then we were on day one.

Oil continues to pour into the gulf at an unprecedented rate, significantly more than the estimate of 5,000 barrels a day.

Oil has reached deep into the Louisiana marshes. Tar balls have washed up on the shores of Alabama and Mississippi.

As long as this oil continues to flow into the gulf we have a real and unprecedented disaster.

On May 18, I requested that the Secretary of Commerce declare a fisheries disaster in the Gulf of Mexico. Alabama's fishing industry represents one of the largest economic engines in the State, accounting for more than $800 matron in annual sales and nearly 18,000 jobs.

On Monday, the Secretary declared a fisheries disaster in Alabama, Mississippi, and Louisiana.

Now, it is up to Congress to ensure that our fishermen who will be adversely impacted by this oil spill for years to come receive adequate assistance.

Today, I offer an amendment to help our gulf coast communities mitigate the disastrous effects of the oil spill. This amendment is not more spending but offset from the oil spill liability trust fund. It further requires ``responsible parties'' to reimburse the trust fund for funding the Federal Government puts towards this amendment.

First, this amendment provides $20 million to fund the Secretary of Commerce's disaster declaration. NOAA has closed 22.4 percent of the commercial and recreational fisheries in the gulf because of the spill.

This declaration will allow the Federal Government to put additional, immediate Federal resources towards this disaster to alleviate and recover from the devastating impacts to the gulf's fisheries.

However, this declaration has no teeth if it is not funded. While I hoped the administration would realize this by requesting an amendment to the supplemental, they have not. My amendment will provide the resources necessary to help our gulf coast region.

Second, it provides NOAA with the resources necessary to begin an expanded stock assessment in the gulf.

A comprehensive stock assessment is critical to the gulf, where there are

hundreds of species managed under fisheries management plans or international conventions. NOAA recently identified the needed steps to improve and expand stock assessments in the gulf and to do so, they will need the best and most timely data on the health and abundance of the stocks. This amendment will provide $15 million to NOAA to begin an expanded stock assessment. We must know what the fisheries stocks in the gulf are now, so we will have a better idea how the oil has affected them.

Finally, this amendment will provide funding to the National Academy of Sciences to study the long-term ecosystem impacts of the spill on the gulf.

It is critical to proactively work to adequately deal with this man- made crisis. If the oil continues to spill in the gulf unabated, it will not only destroy the fisheries this year, but will adversely impact the gulf's ecosystem for decades.

We cannot simply sit by and wait for this problem to solve itself. Clearly, we all know that BP has not yet come up with a solution.

We must continue to ensure that BP, as the responsible party, pays for all damage related to this oil spill, but that does not mean BP can make all the decisions as to what to do and how to handle the disaster that continues to unfold.

We have been dealing with this crisis for 37 days and are no closer to stopping the oilspill than we were on day 1. Since the spill, BP has failed in every attempt to stop the oil flow.

We need to begin putting resources in the gulf to help mitigate the long-term effects of what could be the largest and most devastating oilspill in American history.

I ask my colleagues to support the people of the gulf coast by supporting my amendment.

I object.

I object.

Mr. President, tonight we are nearing the end of the Senate's consideration of a historic piece of legislation. In response to the most significant financial crisis this country has seen in a generation, we have been engaged in a debate about the future of our financial system.

Two years ago, our economy came to a grinding halt. Credit markets shut down, business activity basically stopped in some areas, and world trade virtually collapsed. Millions of Americans lost their jobs and their homes, and they saw trillions in savings wiped out.

As a witness to the near collapse of our financial system and the economic devastation it has wrought, I am fully aware of the fundamental importance of the legislative effort we will soon complete. Because the financial system serves as the heart of our economy, this legislation will have a profound effect on the economic future of this country. The decisions we have made will have an impact on the lives of Americans for decades to come. Furthermore, the impact of this legislation will extend far beyond our shores.

For these reasons, I believe we must get it right. In the end, we will be judged by whether we have created a more stable, durable, and competitive financial system. That judgment will not be rendered by self-congratulatory press releases, but, rather, by the marketplace. And the marketplace does not give credit for good intentions.

Knowing that millions of Americans suffered greatly because of the financial crisis and that generations of future Americans are relying on us to get this right, how did we go about this proceeding that brought us to where we are tonight? I am going to pose a number of questions.

Did we conduct a thorough review of every facet of the crisis?

Did we look at the structure of our markets, examine the role of the regulators, and determine how the existing regulations drove certain market actions?

Did we investigate the GSEs, examine their capital and leverage, address the inherent weaknesses in their dual and conflicting objectives of maximizing returns for private owners while serving as a public housing mission?

Did we explain Bear Stearns and the causes of its collapse, along with the SEC regulatory program entrusted at that time with its oversight?

Did we collect and analyze data regarding the areas hardest hit by foreclosures?

Did we determine whether there were any specific loan types, however characterized, that led to the foreclosures?

Did we take time to learn lessons from the debacle of the AIG financial products division or securities lending operations or of overheated tri-party repo activity?

Did we analyze how maturity transformation allowed the shadow banking system to, in effect, create money out of AAA rated securities?

Did we analyze how activities in the shadow banking system led to an increased concentration of inherently runnable activities?

Did we analyze liquidity buffers at broker dealers?

And did we wait for the Financial Crisis Inquiring Commission, a creation of this Congress, to deliver lessons that it learned about the financial crisis so as to inform our deliberations even more?

The answer to all of these questions I posed is no, we did not. In my view, this represents a fundamental failure of this body to do its own due diligence before we even attempt such a significant undertaking as we are about to tonight.

Millions of people lost their jobs, their homes, and trillions of dollars of wealth. The American people expect more and certainly deserve more, I believe, from us.

Nonetheless, it certainly did not take much investigation to know that the heart of the crisis was massive failures in our mortgage underwriting and securitization systems. Therefore, the most incredulous shortcoming of this bill, in my judgment, is the lack of any serious attention by the Senate being paid to the government- sponsored enterprises that we know as Fannie Mae and Freddie Mac.

Yesterday, one of my colleagues on the other side of the aisle said we were not dealing with the GSEs in this bill because it is too hard. I have to say we certainly have come a long way in the wrong direction.

There was a time not long ago when we did things because they are hard and because they are worth doing. What a difference a few years makes. It is simply a failure of will that nothing is being done to reform the GSEs or, at the very least, cap the allowable losses.

This bill has 12 titles totaling well over 1,500 pages. It has been amended dozens of times. Yet the bill does nothing to affect the ongoing, unlimited bailouts of Fannie Mae and Freddie Mac that to date have cost the American taxpayers at least $146 billion, one of the largest bailouts in history, and it is growing. Our distinguished chairman, the Senator from Connecticut, has expressed his outrage on a number of occasions that consumers paid around $40 billion in overdraft fees in 2009, and he is right. The GSEs now have cost the American taxpayers over 3\1/2\ times that amount and counting. To quote my old friend and former majority leader, Bob Dole: Where is the outrage here?

Perhaps what is most disappointing about the lack of attention to Fannie and Freddie is the fact that there is no end in sight. Losses continue to mount

and the taxpayer exposure is unlimited. For example, in a recent SEC filing, Fannie Mae reported a need for another $8\1/2\ billion from the taxpayers. Hardworking Americans in my State of Alabama and throughout the Nation will be asked to pony up again and again until we do something to stop it. When will it stop? According to my Democratic friends, not yet. The best they can do for the American people in this bill is a study. That is simply incredible.

The GSEs should have been our primary focus. Instead, they were ignored and further enabled by the administration when they raised the cap on losses in December of last year. In an attempt to do something about the GSEs, Senators McCain, Gregg, and I, joined by several of our Republican colleagues, introduced an amendment to this bill that would have ended these bailouts. However, just as they presented action to rein in Fannie and Freddie in the past, Democrats once again embraced the status quo and blocked the road to real GSE reform.

Once our amendment failed, several of my Republican colleagues and I, led by Senator Crapo of Idaho, decided that if we could not end these unlimited bailouts, we would try to cap the losses and provide for a true accounting of the costs. Our amendment would have capped these bailouts at $400 billion, which is a lot of money. Yet even at nearly $\1/2\ trillion, the Democrats could not bring themselves to stop the hemorrhaging of Fannie and Freddie and voted against the amendment.

How much will the GSEs have to lose before my Democratic friends will say enough is enough? Will $\1/2\ trillion be enough? Will Democrats allow reform of Fannie and Freddie before it costs the taxpayers $1 trillion? How much is too much?

The supporters of this bill have argued that it will stabilize our financial sector--the bill itself. I am not sure, however, it can stabilize anything when it does nothing--nothing--to address the two largest destabilizing forces of the crisis, Fannie Mae and Freddie Mac. The fact that it is costing taxpayers nearly $7 billion every month should be enough to convince anyone that something needs to be done and done now. Unfortunately, my Democratic friends, led by the President, are telling the American people they are going to have to pony up and wait again.

The failure to address the GSEs is the most glaring omission in this legislation. There are, however, many things that are in this bill that raise similar concerns for the future of our economy, and I will go through some of them.

A major component of the bill deals with the creation of a massive new consumer bureaucracy, along with a separate title 12, which is a liberal activist's dream come true. Provisions in this title will compel financial institutions to provide free services to selected community groups. This is the exact same model that led us to the crisis in the first place, except for one distinct difference. The government bailout is built in from the beginning through the use of taxpayer guarantees.

The American people are being misled. The authors of this bill are telling them this legislation has been drafted to address the recent financial crisis and that it will tame Wall Street. I am afraid they are going to be disappointed. By the Democrats' own admission, the most important facet of this legislation is the creation of a massive new consumer bureaucracy. It has been described by my Democratic friends as the ``third rail'' of this bill.

During our negotiations on the consumer bureaucracy, my Democratic friends were not focused on the mortgage market. Their sights were set on the rest of the economy. Make no mistake, behind the veil of anti- Wall Street rhetoric is an unrelenting desire to manage every facet of commerce under the guise of consumer protection. They may be interested in protecting consumers, but they are more interested in managing them. All one has to do is read the academic writings of the authors of this new bureaucracy and it becomes very clear what their goals are.

The Democrats' new bureaucracy is an enormous reach across virtually every segment of our economy and a massive expansion of government influence in our daily financial lives. The people of America have been clear: They do not want a massively intrusive, continuously growing, and overly expansive government. They do not want a continuation of our unsustainable government promises, government spending, government deficits, and government debt. They saw what happened in Greece when it overpromised and overspent, and Americans do not want to leave European fiscal legacy to their children.

Yet this bill does not listen to the American people. It promises massive government overreach into even routine daily financial transactions of ordinary Americans and businesses, large and small. Why does the Federal Government need information on ``pertinent characteristics''--whatever that might mean--of persons covered by the new consumer bureaucracy?

This new consumer bureaucracy will become massive, populated with thousands of bureaucrats who will create, within the new bureau, what administration officials have referred to as a correct ``culture'' of consumerism. What is that? The new consumer protection bureaucracy is funded by over $\1/2\ billion per year, funded through an Argentina- style raid on our central bank. Of course, this opens the door for unlimited Federal taxpayer funds for community organizers and groups such as ACORN.

I favor consumer protection. I believe all of us do. This new bureau, however, promises to be more abusive than protective. By abuse, I mean that the bureau will lower the living standards of Americans. This new consumer bureaucracy is intended, by its architects in the Treasury, to begin the process of financial regulation with the intent of changing the behaviors of the American people.

I have faith in the American people and their ability to make good choices. Granted, we do not always choose well, but that is the human condition. I believe a poor choice freely made is far superior to a good choice that is made for me. I am afraid the architects of this bill do not share this sentiment, nor do they share my faith in the American people.

They view us as victims in need of their guidance. They view us as fallible and in need of government bureaucrats to protect us from ourselves. It is a bit ironic, however, that the sponsors of this new bureaucracy seem to believe regulators do not share the same fallibility of ordinary Americans. Tell that to the hundreds of Bernie Madoff victims.

This is the world view that is driving this bill, and it should concern every American. It seems, increasingly, that the view of the Democrats toward virtually all American business is a cynical view that Americans are out to take advantage of one another. I don't share that view either. My presumption is Americans are honest and hardworking and history has shown that to be true.

This bill promises to slow economic growth and kill jobs because it will place onerous regulatory burdens on businesses large and small. This bill will stifle innovation in consumer financial products and reduce small business activity. It will lead to reduced consumer credit and higher costs for available credit. Less credit at a higher price will dampen the very small business engines of job creation so desperately needed right now, when unemployment hovers near double digits nationally and is at 11 percent in my home State of Alabama. I cannot support legislation that threatens business conditions and the potential for job creation, especially at a time when we are crawling out of a severe recession.

Aside from onerous new consumer regulations, another avenue through which the bill will slow economic activity is in the treatment of derivatives. This bill will chase risky financial trades overseas and further into the unregulated shadow banking system, thereby magnifying, not reducing, unmonitored systemic risks.

This bill demonstrates an imprudent disregard for the economic effects of a severely misguided approach to derivatives. Given the treatment of derivatives in this bill, end users--that is everyone from candy bar makers to beer brewers--who rely on these financial instruments to manage their risks will face massive increases in costs. Because risk management will now be

significantly more expensive, we can expect lower business investment, which, again, means fewer jobs.

Why are we increasing costs to ordinary end users of derivatives, such as your home heating provider or makers of candy bars? There seems to be an irrational desire to make all financial products of certain types standard, whether that can or should be done. Once again, the attitude seems to be: We are government and we know best. That attitude will almost surely lead to massive concentrations of risks in central derivatives clearinghouses. It will also, ironically, chase derivatives activities overseas and into the unregulated shadow banking system. Who will back up these clearinghouses at the end of the day should market stresses prove to be severe? The Federal Government and the Federal Reserve will back them up, promising even more bailouts in the future-- this time possibly for clearinghouses.

The approach to hedge fund oversight in this bill is symptomatic of an overall careless approach to assigning regulatory responsibility. Hedge funds have not been identified as a cause of the financial crisis, but hedge funds have been identified as a potential source of systemic risk.

However, rather than subjecting hedge funds to a systemic risk oversight regime, hedge fund advisers will be subject to a registration regime and the investor-protection oriented requirements that go along with it.

On its face, registration sounds reasonable.

The SEC, however, is not a systemic risk regulator, and when it tried to be one through the Consolidated Supervised Entity--``CSE''--program, it failed. Yet, now, we are doubling down on the SEC, the very agency that failed us to begin with.

An unfortunate consequence of the treatment of hedge funds in the bill is that investors will likely treat SEC registration as an SEC seal of approval. Fraudulent hedge fund advisors will be virtually invited to use registration as a marketing tool.

Investor protection is an important job for the SEC, but its resources are not endless, and the SEC has been notoriously unable to inspect advisors on a regular basis.

Limited SEC resources should not be diverted from regulated public investment companies, such as mutual funds, to the monitoring of hedge fund advisors, as the reported bill proposes to do.

If the SEC is spending its resources in this manner, it will not be long before investors that do not meet the accredited investor threshold start demanding to be allowed to invest in hedge funds.

It will be hard to counter the argument that they should have access to such investments when the SEC is on the case.

Mr. President, there are dozens of problems with the Lincoln-Dodd over-the-counter--OTC--derivatives title, which I would be more than happy to document. In the interest of brevity, however, I will point out just a few of the most egregious examples:

The Lincoln-Dodd derivatives title does not provide regulators with access to the information they need to do their job.

The title is unworkable. In a 6-month marathon rulemaking session, regulators are to make massive changes in a huge market without the usual notice-and-comment that allows for broad public input.

Neither the SEC nor the CFTC has the staff that it needs to write the rules, let alone implement them. Companies, including Main Street businesses, all across the United States will also face operational, legal, and financial challenges as they strive to come into compliance with record keeping, reporting, capital, margin, clearing, and business conduct requirements.

Key provisions in the Lincoln-Dodd derivatives title directly contradict key provisions in other titles and current law. Section 716, for example, would preclude a clearinghouse--even one that does not clear swaps--from receiving access to the discount window. This is directly contrary to title 8, which empowers the Federal Reserve to grant discount window access to clearinghouses.

The proposed regulatory framework in the Lincoln-Dodd derivatives title poses new risks to the system. For-profit clearinghouses will have an incentive to clear as many swaps as possible.

If they do not properly assess and collect margin for risks associated with these products or do not have sufficient operational capacity, an unanticipated event in the market could topple a clearinghouse and send shock waves throughout the rest of the system.

The Lincoln-Dodd derivatives title will benefit big dealers who can shift their swaps business overseas over small dealers who cannot.

The so-called end user exemption contained in the Lincoln-Dodd derivatives title is illusory. Main Street businesses will not be able to continue hedging their business risks as they now do.

Many end users will find themselves subject to clearing mandates, bank-like capital requirements, and extensive dealer-like business conduct requirements. As a result, Main Street businesses will face higher costs that will ultimately be borne by consumers.

Consumers will be paying more for everything from electricity to candy bars. The Lincoln-Dodd derivatives title will work as an antistimulus plan that will pull resources out of the economy, hurt growth, and slow job creation. The derivatives title has real world consequences that cannot be wished away with a few technical fixes at the margins.

Those are but a few of nearly one hundred flaws in the derivatives title. Yet there is another title--title 8--which has received less attention than derivatives, but is equally troublesome.

Title 8 would give a stability Council broad power to identify financial market utilities, payment, clearing, or settlement activities that it deems to be now, or likely to become, systemically important. Those entities and activities would then be subject to risk regulation by the Federal Reserve Board of Governors.

This title is another example of an inappropriate delegation of an congressional responsibility to decide who should be regulated and by which regulator. The extent of delegation is left uncomfortably open, as it depends on open-ended language in which key terms are undefined.

The definition of ``payment, clearing, and settlement activities,'' for example, include any ``activity carried out by 1 or more financial institutions to facilitate the completion of financial transactions.'' With definitions like this one guiding the Council, it could decide to assign any aspect of the financial market to the Fed.

Lack of regulatory accountability contributed to the recent financial crisis. Title 8 exacerbates the problem by allowing the Council to bring the Fed into significant sectors of the financial system as a back-up regulator. If a problem arises, both the Fed and the relevant supervisory agency will have someone else to blame. And both will be able to blame Congress for its careless delegation of its own responsibilities.

Yet another troublesome title is title 9, which could appropriately be labeled the ``Grab-Bag'' title, since it is a grab-bag of items on the years-old wish lists of special-interest groups.

These items are not designed to respond to problems identified in the last crisis or likely in any crisis, and have not been considered in hearings.

The grab bag includes puzzling items, like a provision that would create a redundant office at the SEC and another provision that requires disclosure of the ratio of the median employee's compensation to the chief executive officer's compensation.

It looks to me like the way is being paved to achieve so-called ``social justice'' in income distribution. This is another disturbing example of the government getting its nose under the private sector's tent.

The grab bag also includes anti-investor provisions. The proxy access provision, for example, enables special interest groups to push their agendas at the expense of the rest of the shareholders.

It also includes a surprising self-funding provision that will give the SEC complete control over the size and allocation of its budget. Let me repeat that. The Democrats are going to give the SEC virtual budget autonomy from congressional oversight after the SEC

dropped the ball in the Madoff and Stanford frauds, and in the wake of the SEC's pornography scandal.

When the ``grab bag'' title does attempt to address issues related to the crisis, it takes the wrong approach.

With respect to credit rating agencies, for example, the effort to pull ratings out of the statutes and regulations is lost in a complicated new regulatory framework that only the big credit rating agencies will be able to navigate. This will stifle competition--the very thing we need to be encouraging. The failure of the ratings agencies was central to the crisis and this bill represents half measures at best.

The heightened liability standards, corporate governance requirements, and qualification standards for credit rating analysts will lull investors into greater apathy and discourage competition.

With respect to securitization, rather than focus on the root cause of the housing bubble by establishing clear, tough, and fair underwriting standards, this title imposes a 5 percent risk-retention requirement across-the-board for securitizations.

In combination with changes in accounting and bank capital rules, a risk retention requirement could force an entire securitization to be retained on a bank's balance sheet for accounting and capital purposes. Securitization activity would then become economically unviable.

This approach to securitization is a risky gamble to take at a time when our securitization markets are just starting to recover and show some signs of life.

The whistleblower provisions are well-intentioned attempts to address the SEC's failure during the Madoff scandal.

However, the guaranteed massive minimum payouts and limited SEC flexibility ensure that a line of claimants will form at the SEC's door hoping for some of the hundreds of millions in the whistleblower pot. The SEC will spend limited resources sorting through these claims that would have been better spent bringing enforcement cases.

Title 9 devotes 250 pages to provisions that either have nothing to do with the crisis or purport to provide solutions that will not actually solve problems but, rather, promise to give rise to many new problems.

This bill has been largely outsourced to Treasury officials and to regulators who have written key provisions to bolster their own power and authority.

This bill reflects a series of deals made, not by lobbyists, but by the executive branch along with the existing financial regulators who failed to do their jobs during the last crisis.

In negotiating key features of the bill, delays were the norm as responses to my offers or inquiries had to pass through a long and winding road of approval from Treasury, the Fed, the FDIC and on and on.

Unfortunately, we have outsourced the writing of this legislation to the Fed, Treasury, OCC, SEC, CFTC, among other government bureaucracies.

Let me give an example. Consider the derivatives title in the bill. This title was largely authored by the CFTC. We see this manifested in numerous provisions that give the CFTC broad new authority, sometimes to the exclusion of other regulators.

The CFTC used this bill as an opportunity to grab jurisdiction from the SEC, which was purposely excluded from the negotiating room during critical meetings.

As a result, the derivatives title gives the CFTC regulatory authority over a wide swath of Wall Street and Main Street companies.

The CFTC, in addition to its traditional role of overseeing the commodity futures markets, will be charged with protecting retail investors, assessing systemic risk, imposing capital requirements on manufacturing companies, regulating banks, and assessing the regulatory capability of the Securities and Exchange Commission.

This is the sort of result you get when you hand the legislative pen to the regulators.

My Democrat colleagues like to talk about the influence of Wall Street lobbyists, but the real influence in this process has been exerted by the bureaucracies. I thought that one of the main objectives of this legislation was to plug regulatory gaps and streamline our financial regulatory structure?

We still have the Fed, the FDIC, the SEC, the CFTC, and the OCC. We have also added some new letters to the alphabet soup, as with the CFPB and the OFR.

We have also seen a complete about face with respect to the Federal Reserve.

The process seemed to have begun with a commitment to rein in their bailout powers and take away their consumer protection authority, given the Fed's failures. By contrast, this legislation actually expands the Fed's powers.

Americans see developments in Europe, where a monetary union faces a severe test and market participants are running away from the debts of profligate governments. Americans are increasingly worried that the out-of-control spending here in the U.S. and the massive expansion of government will very soon test American fiscal viability.

An appropriate response would be to rein in the costs and breadth of runaway government spending and bureaucratic expansion. The wrong response would be the financial regulation bill before us.

From legislative process to the final bill language, this bill is flawed. This bill promises more government, more costs, slower economic growth, and fewer jobs. It threatens privacy rights and fails to address crucial elements of the recent crisis.

I urge my colleagues to vote against this bill.

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

I suggest the absence of a quorum.

I suggest the absence of a quorum.

I object.

I suggest the absence of a quorum.

I object.

Mr. President, I will be brief. I commend both the Senator from Delaware and the Senator from Tennessee for their hard work in this area. This is very arcane. It is difficult, but it is very important. I was hoping we could bake a whole loaf of bread, not a half. One-half is better than nothing--but a whole loaf. What we are doing thus far is Main Street. We are not worried about Wall Street. Wall Street will take care of themselves, as Senator Corker and others have said on this floor. They always have, always will. But it is Main Street, the smaller banks in our communities, in our towns all across the country. If we could, in the wisdom of the chairman of the committee, if we could move to a whole loaf of bread, that would be commendable. I feel like we are not going to do a whole loaf here today because we don't have the votes. But gosh, a whole loaf is always better than half.

I yield the floor.

I object.

Mr. President, although I don't necessarily believe I will vote against the Levin-Merkley amendment, if it is brought up and debated, a number of my colleagues are not here on the floor and have asked me to lodge an objection. So on their behalf, I object.

I am OK on the first one.

I object.

I object.

I object on behalf of Senator DeMint.

I objected on behalf of Senator DeMint.

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

Objection.

I was objecting on behalf of myself and a lot of other Members.

Mr. President, if I can respond, there is no secret hold here. I am objecting on behalf of myself to his unanimous consent request.

Mr. President, a key part of the bill we are considering is title VII, which we all know addresses the regulation of the over- the-

counter--OTC--derivatives markets. While there is still debate among us regarding the root cause of the financial crisis, there is no debate that the lack of transparency in the OTC derivatives market was a contributing factor to the financial debacle.

When Lehman Brothers failed, there were press reports that banks and other large financial institutions had written credit default swaps--we call them CDSs--on Lehman Brothers that could potentially result in $360 billion in cash payouts. As it turned out, though, the number was less than $6 billion. But a lot of needless anxiety preceded the realization that the cash payouts on Lehman Brothers' CDS contracts were manageable. The regulators simply did not have the information they needed to know about the magnitude of the problem they faced.

Limited regulatory information also played a role in the demise of AIG. It is worth remembering that AIG's problems arose both in its regulated insurance subsidiaries, which were exposed to the troubled subprime mortgage market through their securities lending programs, and in its financial products unit, which sold credit default protection for subprime mortgage products and other customized derivatives products.

AIG's financial products unit, on the strength of its credit rating, built up an extremely large, one-sided book of swaps transactions. The contracts were written in such a way that when AIG's credit rating was downgraded, AIG, you will remember, was forced to post collateral on all these transactions.

Regulators at that time did not have the flow of information about OTC derivatives transactions to see this problem building. Without this information, they obviously could not take steps to address the problem.

I believe the AIG bailout and the Lehman Brothers failure provided us with one simple lesson that should serve as the basic test for any OTC derivatives legislation proposal. The lesson is that prudential and market regulators must have the tools to properly oversee OTC swaps markets. The lack of transparency regarding counterparty exposures and the lack of adequate regulatory tools made it difficult for regulators to respond quickly and effectively to this financial crisis 18 months ago.

Unfortunately, the Lincoln-Dodd derivatives bill fails that most basic test. The Lincoln-Dodd bill does not provide regulators with access to the information they need to do their job. It requires all other regulators to go through the Commodity Futures Trading Commission to get information. It gives only begrudging access to the Securities and Exchange Commission--the SEC--to data about the swaps markets and thus limits the SEC's ability to get the information it needs to oversee the securities markets.

Much of this bill reads more like a jurisdictional power grab to some of us than an honest attempt to ensure that all the relevant regulators have the information and the authority they need to do their jobs.

I believe the Lincoln-Dodd bill contains a number of other fatal flaws. For example, key provisions in one title directly contradict key provisions in other titles and also in the current law. One provision in the Lincoln-Dodd bill that has gotten a lot of attention is a prohibition on Federal assistance to any ``swaps entity,'' which includes entities that do not handle any swaps. All clearinghouses, regardless of whether they handle swaps, would be precluded from receiving Federal assistance, which is interpreted to include access to the Federal Reserve's discount window. This provision contradicts language in title VIII, which empowers the Federal Reserve to grant discount window access to clearinghouses.

Also, the bill imposes a fiduciary duty on dealers when their counterparties are pension plans, endowment funds, and municipalities. As understood in current law, pension plans cannot engage in transactions with entities with which they have a fiduciary relationship.

The proposed regulatory framework also poses new risks to the system. For example, the bill anticipates generally imposing a clearing mandate on most market participants as soon as a clearinghouse will accept a swap for clearing. For-profit clearinghouses will have an incentive to clear as many swaps as possible. If they do not properly assess and collect margin for risks associated with these products or do not have sufficient operational capacity, an unanticipated event in the market could topple a clearinghouse and send devastating shock waves throughout the rest of the system. We witnessed that for a few minutes last week.

This bill is also anticompetitive because it further concentrates business within existing dealers. The prohibition on Federal assistance, including FDIC insurance, to swap entities means neighborhood banks will be unable to hedge their own interest rate risks, let alone offer swaps to customers who need to hedge their risks. Bank dealers are given preferential treatment with respect to both capital and margin requirements.

Another disadvantage in the bill for nonbank dealers is that even the commercial aspects of their business will be subject to bank-like capital requirements, which is an unprecedented expansion of bank-like regulation to the nonfinancial corporations. Nonbank dealers may simply exit the derivatives business and leave the swaps business more concentrated among a few large Wall Street dealers, which is not a good result from a competitive or systemic risk standpoint.

I believe the so-called end user exemption contained in this bill is illusory. Main Street corporations that buy swaps in the ordinary course of business to hedge their own business risks will be subject to the same regulatory treatment as Wall Street banks. This means manufacturing firms, power companies, and even beer producers will be required to hold massive amounts of cash and other collateral simply to engage in risk management. I believe this will work as an anti-stimulus plan to pull resources out of the economy, hurt growth, and slow job creation. It will also lead to price increases and price volatility.

For my colleagues interested in increasing their constituents' cooling costs in the summer or heating costs next winter; for those interested in seeing the price of orange juice, cereal, lightbulbs, medicine, office supplies, building materials, cars, and computers rise; for those who would like to make the overall cost of living for all Americans go up and the prospect of getting a job go down, the Dodd-Lincoln bill is for you.

Finally, I believe this bill is unworkable as it is now written. The derivatives title is the one piece of this legislation that will be tested every day. The bill would make massive changes in a huge market in 180 days without the usual notice-and-comment rulemaking period that allows for broad public input during that time. Neither agency has the staff it needs to write or implement the rules at this time. There will be enormous operational challenges for the SEC and the CFTC as they gear up to monitor and receive data on all swap transactions for which there is no data repository. Companies all across the United States will face operational, legal, and financial challenges as they strive to come into compliance with record-keeping, reporting, capital, margin, clearing, and business conduct requirements.

Don't just take my word for it. Check for yourself. Take the words of a recent Bloomberg article, which was aptly titled ``How `Hard to Fathom' Derivatives Rule Emerged in the U.S. Senate'' or take the words of the National Association of Manufacturers, which warned that the end-user exemption ``is not strong or clear enough. In addition, other provisions in the derivatives title could effectively eliminate the exemption for many companies, and in some cases, subject them to capital and margin requirements or higher costs.''

Take the words of a well-respected lawyer in a memo to his clients which contained the following criticism of the Lincoln-Dodd bill:

Ordinarily, in writing with regard to a proposed law, the

expected role of the law firm lawyer is to provide a

description rather than commentary. In the case of the

Lincoln-Dodd bill the law firm lawyer attempting a

noncommittal description must confront the following

problems:

(1) the Lincoln-Dodd bill's substance is inconsistent with

its stated purposes; (2) it would give a degree of

discretionary power to the U.S. Government that is far out of

the ordinary; (3) the Lincoln-Dodd bill is loosely drafted in

even its key provisions; (4) it

could make for radical changes in the financial system that

seem not to have been considered; (5) the Lincoln-Dodd bill

would likely motivate institutions to move jobs to Europe,

damaging the U.S. economy and particularly the northeastern

financial center economy; (6) it would discourage banks'

capital market and real estate lending in the United States

by increasing their risks; and (7) the Lincoln-Dodd bill

would hurt banks' profitability at a time when they are

struggling.

Or take the words of an industry representative who urged us to change a certain provision that would prevent pension plans and government agencies from getting the services they need, and another provision that could force purchasers of swaps into deals with less creditworthy counterparties.

Or take the actions of my colleagues on the other side of the aisle. While several of them have privately admitted that they fear the wrath of the administration for speaking out publicly against the Lincoln- Dodd derivatives bill, their actions speak louder than their silence. They are apparently hard at work, we know that, behind closed doors, trying to make numerous last-minute changes to this flawed bill.

Or take the words of my colleague from Connecticut, Senator Dodd, for whom I have a lot of respect, the chairman of the Banking Committee. He was quoted earlier this week saying:

We still have work to do on [derivatives]--there's no

question. We have always known that. So a lot of people are

spending a lot of time trying to come to some common points

on this.

I agree with the committee chairman; the derivative title needs a lot more work. Fortunately, that work has already been done: the substitute derivatives bill that we offer as amendment No. 3816, the Over-the- Counter Swaps Markets Transparency and Accountability Act of 2010. This amendment was crafted and cosponsored by several members of the Agriculture and Banking Committees. The substitute derivatives bill is a bipartisan product. The bill is built from the framework of the Chambliss-Lincoln bipartisan process. It also incorporates key concepts from the Gregg-Reed bipartisan working group that was formed by Chairman Dodd himself to hammer out real derivatives reform. The substitute derivatives bill is also a multicommittee product.

My colleague from Georgia and I appreciate the input from the Agriculture and Banking Committees, as well as the important input from the Judiciary Committee, on provisions that strengthen protections for customer funds in the event of a counterparty bankruptcy.

The derivatives substitute amendment addresses five key areas of reform: introducing regulatory transparency and regulatory authority over the OTC swaps markets, mandating clearing for Wall Street dealers, minimizing threats to the financial stability of the United States, preserving Main Street's ability to hedge their business risks, and improving public transparency. I will briefly explain each of the five areas of reform.

First, we address regulatory transparency and regulatory authority. I believe we must repeal the statutory provisions that prohibit regulators from overseeing the OTC swaps markets and give them access to the information they need so they can do their job.

Second, we mandate in our amendment clearing for Wall Street dealers. We must encourage the clearing of derivative transactions among Wall Street dealers and dealer-like firms in well-regulated clearinghouses. This will account for a combined 80 percent to 90 percent of all OTC derivatives transactions.

Third, we minimize threats to the financial stability of the United States. We must prevent the concentration of inadequately hedged risks in individual firms or central clearinghouses.

Fourth, we preserve economically beneficial hedging for Main Street businesses. I believe we must ensure that so-called corporate end users can continue to hedge their unique business risks through customized derivatives. Main Street businesses do not pose any threat to the financial stability of the United States. In fact, prudent use of derivatives for hedging makes their businesses, the financial system, and the economy safer. The prudent use of derivatives enables businesses to protect themselves from changes in interest rates, swings in foreign currency, exchange rates, and the changing prices for raw materials that all of our manufacturers use.

If businesses in America are not able to use derivatives or if the cost of using derivatives increases, they may choose to move operations overseas or curtail business operations, which will mean the loss of jobs when we really need jobs. If they must refrain from hedging their risks, prices will go up for all our consumers--all of us.

Fifth, we improve, in this amendment, public transparency. Without mandating that swap trades must occur on an exchange, we must direct regulators to provide investors and other market participants with information about recently executed transactions for the purpose of helping them to mark existing swap positions to market, make informed decisions before executing future transactions, and assess the quality of transactions they have executed.

The Lincoln-Dodd derivatives title does not achieve these reform objectives but, in fact, threatens to stymie real reform.

The substitute derivatives amendment we offer represents a change in course from the Lincoln-Dodd bill. The substitute amendment is a strong bill that offers real reform. This is why the National Association of Manufacturers has indicated that all votes related to the Chambliss- Shelby substitute amendment, including procedural motions, may be considered for designation as key manufacturing votes in this Congress. I think it is important to American business that we adopt this substitute.

It is 5:30 now.