Floor Statements

I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, we have just concluded a 2-week recess. We have come back to the Capitol, rested and prepared to get to work on the Nation's business. At the top of the list for most people, at least based on what I heard in my State and likely what Senators have heard from coast to coast, is the desire for us to get to work on the economy. There are other concerns--the war in Iraq, the cost of health care, the list goes on--but at the top of the list is the economy, harking back to the Clinton campaign in 1992: ``It is the economy, stupid.'' It has been for a long time, and it certainly is again today.

During the time I spent in Delaware, I visited a lot of places, including a number of schools. One of the questions a group of young people asked me was, what did I like most about my job. There are a number of things I enjoy about serving in the Senate. I love helping people. We have the opportunity to do that through constituent services and other ways every day. That is a source of great satisfaction. I know it is to the Presiding Officer and others of our colleagues. Among the other things that bring me great joy is from time to time we are able to take folks who have different views on a particular issue and actually pull them together to work as one, to develop consensus around issues.

We need to develop a consensus on a path forward with respect to the housing situation, the meltdown we have seen, especially with subprime mortgages and the threat that meltdown poses to binding together, tightening up and bringing to a halt the flow of money through our economy, through the banking system.

I am encouraged by the vote we just had where 94 Senators voted to proceed to the housing bill. Our Democratic leadership has pulled back and said: We will not try to push forward with five or six actually very constructive elements in an earlier version of our proposal but provide time for Senator Dodd and Senator Shelby to work with others on the Banking Committee and other colleagues who are not on the committee to put together a broader consensus that builds on the package we voted not to proceed to 2 weeks ago. We can do those but more as well.

Let me express my hope that the elements of the package Senators Dodd and Shelby bring back to us include the ability for housing authorities to issue revenue bonds, the proceeds of which could be used to help folks refinance their mortgages, people in danger of losing their homes. I am not interested in rewarding bad behavior, in rewarding investors or bankers who made bad decisions or, frankly, individual borrowers who made decisions that were inappropriate or wrong, where they misrepresented their financial standing. I don't think we want to reward bad behavior. But there are a lot of people in danger. We have some 8,000 people who will have their homes foreclosed on today, tomorrow, the next day, and the next. That is a clear signal to me we need to do something.

We can do some things that will make a difference without breaking the Treasury. Let me mention a couple elements of what I hope will be in the housing package that we might bring back to the floor. One of those is FHA modernization. Some people recall 75 years ago the Federal Housing Administration was established.

People wonder where the 30-year fixed rate mortgage came from. It came from FHA. A lot of people own a home today because their loan was guaranteed by the FHA. My first home loan was guaranteed by the VA for the house I bought when I came back from Southeast Asia at the end of the Vietnam war. Not even 10 years ago, but 5, 10 years ago, almost 20 percent of the people in this country got a mortgage that was guaranteed by the FHA. As recently as last year, that number is down to 5 percent. The FHA oftentimes has helped to insure mortgages of people who have a questionable credit rating, people who were maybe a first- time home buyer for whom a lot of banks were reluctant to provide a mortgage without the guarantee that maybe an FHA or a VA would offer. But FHA-guaranteed mortgages dropped from almost 20 percent of all mortgages a half dozen or more years ago, down to about 5 percent today.

The drop between 20 percent or whatever it is down to 5 percent reflects the number of people who used to go to FHA for help, who today or in recent months and years have instead taken advantage of these adjustable rate mortgages that have low teaser introductory rates that reset after a couple years, that have a clause in them that makes it difficult, if not impossible, or at least very expensive, to refinance the mortgage. Those people are stuck.

There are a couple of million of them who have been stuck with adjustable rate mortgages, high teaser rates that are going up, and finding it difficult to get out of that situation. For those folks who have been in that situation, maybe people with somewhat marginal credit, people who are first-time home buyers, I don't want them to look for adjustable rate mortgages for salvation. I want them to see the FHA as relevant in their lives.

What we need to do is bring the FHA into the 21st century to make it relevant to today's borrowers' needs.

Senators Dodd and Shelby have been working with Representatives Frank and Baucus on legislation we passed in the Senate. The House has passed FHA modernization legislation. I think they are close to consensus. My hope is we can find consensus. And when we take up later this week, hopefully, a bipartisan housing recovery bill, a centerpiece of that will be FHA modernization. We ought to do that. It is something we all agree on, Democrats and Republicans, the President, and, frankly, a lot of people around the country, borrowers and lenders too.

The second piece that ought to be in this package will be the authorization that we would provide for housing authorities throughout the country to issue mortgage revenue bonds, tax exempt revenue bonds, the proceeds of which could be not only used for first-time home buyers, not just for multifamily housing, affordable housing, but also could be used to provide moneys to help people refinance their mortgage, people in some jeopardy. The administration supports that idea. Secretary Paulson testified before our committee in favor of that idea. It is part of the Democratic package that we sought to bring to the floor 2 weeks ago. It ought to be part of the consensus package that we will take up later this week.

There are any number of other good ideas that hopefully will be part of the package. Senator Jack Reed from Rhode Island has a very good idea that seems to be acceptable on a lot of fronts, to provide for greater transparency for borrowers as people go to the credit markets to look for mortgages, to make sure they know what they are getting and get a good deal, a fair deal.

Senator Martinez and Senator Feinstein have a proposal. I believe it is one that deals with the appraisals, to make sure the appraisals that back up the homes that are being bought or sold are actually real and not just an appraisal put together, pulled out of thin air because somebody drove by a house and slapped a value on it by looking at it through a windshield.

I think Senator Martinez has another good idea with respect to licensing mortgage brokers. It may not be perfect and is something that can be worked on further, but something along those lines should be part of this package.

Senator Isakson has an idea and is actually something I think was done maybe when President Ford was President. Senator Isakson's idea is if you have a home--let's say all 100 desks in the Senate Chamber are all homes. There is one for each Senator. Maybe this home right here is in foreclosure, and it is blighting the value of this home and that home and those homes all around it. The folks in this neighborhood would love to have somebody come and live in this home, somebody who is going to take care of that property and maintain that property but also help to maintain the value of the other properties.

What Senator Isakson does is provide a tax credit--I think he is saying $5,000 per year--for somebody who comes in and not just buys that home but lives in that home as the owner and the occupier. To the extent they do that, they get a $5,000 tax credit. He suggested we do that over 3 years, which would mean $15,000 for 3 years. That could be pretty expensive. I have suggested to him we try to find a way to bring down the cost of his proposal. My hope is we can do that and include that in the final bill we come up with.

Another idea that has merit is to increase somewhat the appropriation for community development block grants and to say to State and local governments they can use some of the proceeds from this money to take a home that is in foreclosure and do something to prepare it to be sold and to restore the value of that home and to restore the vitality of the neighborhood in which it is now decaying.

In short, there is no shortage of good ideas. Some of them are authored by Democrats and offered by Democrats, and in some cases they are authored and offered by our Republican colleagues. In some cases they are ideas that enjoy bipartisan support. At the end of the day, together they fashion a pretty good package that will help make a real difference, and a difference in not a couple years but literally in a couple of months.

The last thing I would say is, one of the more controversial provisions in the package that came to us actually last month from our Democratic leaders is a provision dealing with bankruptcy and would extend to bankruptcy judges the ability to go in and not only adjust interest rates on mortgages for homes that are in foreclosure or about to go into foreclosure but also to adjust the amount of the mortgage itself.

That has caused a lot of concern about the chilling effect it may have on interest rates for primary homes in the future. I give Senator Durbin credit. He has tried to amend his earlier proposal to address the concerns--the legitimate concerns--that have been raised. I think he has acted in good faith. I know Senator Specter has a little different proposal on this approach. I think Senator Dodd has been working along with Representative Frank over in the House on kind of a variation of an earlier idea suggested, I think, by the head of the Office of Thrift Supervision--the folks who supervise the savings and loan industry--to try to make sure we address the issue of a homeowner whose home is not in foreclosure but whose mortgage is underwater.

I will give you an example. You have a home that has been bought for $200,000. Today the home is worth $160,000, and the person who owns the home is thinking about literally walking away from their mortgage, walking away from their home. You can do that today for about $1,000, I am told, working through a company that will help you walk away from your home mortgage. The person who walks away becomes a renter, and the obligation they have to continue to have to pay the mortgage goes away. You end up with a home that is in foreclosure. The banks do not want to be stuck with those properties. The folks in the neighborhood of the home being foreclosed on do not want that to happen in their neighborhood.

I think Senator Dodd and Representative Frank have a very constructive idea--not a perfect idea but a good idea--that can go forth. It requires some sacrifice on the part of the lenders. It requires some sacrifice and give on the part of the borrowers. But it also leaves them a home in the end, at least, where they still have a little bit of equity and a good reason not to walk away from their home, triggering a foreclosure.

The last thing I will mention--this is an idea that is not new, but we have been hearing testimony about this for a couple years--we have three major Government-sponsored enterprises, not counting Ginne Mae, but three major Government-sponsored enterprises whose job it is to help raise money and to provide liquidity and safety for the housing market in this country. One is Fannie Mae, another is Freddie Mac, and the third is a little bit different kind of an animal called Federal home loan banks. There are about 12 of those throughout our country.

The way we buy homes has changed a whole lot over the years. When I bought my first home in Delaware, I went to a bank. They agreed to make the mortgage. I borrowed the money. I think it was about $40,000. They borrowed the money and they held my mortgage. They held my mortgage, and every month they would send me a statement, and I would send them a check to make my payment. They held the mortgage for years and years and years.

It does not work that way anymore. Today you go to your local thrift or bank, and they make a mortgage to help a person buy a home, and the bank may decide to hold the mortgage. They may decide to service the mortgage. But in most cases, they don't. In a lot of cases they turn around and they sell the mortgage to Fannie Mae or Freddie Mac. Fannie Mae and Freddie Mac are huge financial institutions. They package these home mortgages together

from all kinds of financial institutions that originally made the mortgages from across the country, and they put them together into investments called mortgage-backed securities, and those mortgage- backed securities are sold to investors all over this country and all over the world.

The problem with the mortgage-backed securities is when you have a drop in home values, you have a problem with homeowners, borrowers not making their mortgage payments. When you have a problem with the underlying homes that make up these mortgage-backed securities going into foreclosure and mortgage payments not being collected, the value of those mortgage-backed securities drops. The companies, the investors who are holding those mortgage-backed securities are getting into trouble, and we have a situation where liquidity in our banking system begins to dry up.

When the liquidity in the banking system dries up, two things can help start a recession. One of those is that when people think we are going into a recession, it can be a self-fulfilling prophecy because people stop spending money. They stop spending money and, lo and behold, we have a recession. Another way we have recessions is that the banking system stops working. They stop making loans. Liquidity is sort of like the blood in our veins. The liquidity goes away in our financial systems and our economy. That is part of what we face today.

The two entities that do the most in terms of trying to make sure we continue to have liquidity in our banking system are Fannie Mae and Freddie Mac when they buy these mortgages from banks that have made mortgages to individual borrowers. Then they package these mortgages. Sometimes they sell them around the world. Sometimes they hold those mortgage-backed securities in their own portfolio. In some cases, the folks at Fannie Mae or Freddie Mac, I guess, actually hold individual mortgages for a while. They do some of that as well.

The problem with Fannie Mae and Freddie Mac is, they have run into trouble in the last couple years because they do not have a very strong regulator. They do not have a strong, independent regulator. We have held many hearings for a couple years trying to figure out how we provide a strong, independent regulator and at the same time make sure Fannie Mae and Freddie Mac do not repeat the sins and mistakes of their past few years. How do we do that in a way and at the same time create an affordable housing fund much as we have with the Federal home loan banks?

My hope is--if not in this package that is, hopefully, going to emerge from these discussions in the next day or two--in the next week or two, maybe month or so, the Banking Committee can move together and report out a consensus package on regulatory reform to provide a strong, independent regulator for Fannie Mae, Freddie Mac, and the Federal home loan banks. That would be another good thing for our country and for those of us who want to buy homes and sell homes.

Let me close with this: Going back to the beginning of the year, as our economy started to slip into what may be a recession--and we will find out in another quarter or so if it really has been a recession--as we began to slip, the Federal Reserve, actually starting last fall, began to use its monetary powers, first of all, to lower the Federal funds rate--the rate at which banks charge one another for lending money between themselves at the end of every day--they started lowering the Federal funds rate rather dramatically--in fact, more dramatically than I have ever seen in my life.

The Federal Reserve has made it possible to encourage more banks, more financial institutions, regular financial institutions, and even investment banks to come to the discount window to borrow money to meet their problems. The Federal Reserve has gone so far as to even help make possible for JPMorgan Chase to come in and take over Bear Stearns so it would not collapse into bankruptcy and trigger maybe an even worse situation.

While the shareholders of Bear Stearns have taken a shellacking--I think they ended up getting about $2 per share for their stock; Bear Stearns' stock had been valued at over $100 not long ago--the shareholders took a loss, but at least it did not cause sort of a domino effect in a failure of our financial system. The Federal Reserve has been involved in that.

The Federal Reserve has been willing to take from financial institutions their mortgage-backed securities and replace them with Treasury securities to put some liquidity back into the banking system. The Federal Reserve has been terrific. It has been very helpful in terms of putting liquidity back into the system but also raising the confidence of consumers, the confidence of our constituents, and us too. So that is one that has happened.

The second thing we have done, Congress and the President working together, is we have agreed, about 2 months ago, upon a stimulus package. Is the stimulus package one I would have written or maybe the Presiding Officer would have written? Probably not. But on balance, it does more good than bad, and we expect to see a boost in our gross domestic product in the second half of this year of maybe 1, 1.5 percentage points. That is going to be a nice lift to the economy as we struggle to either shorten a recession or to abridge one altogether.

The third piece that is still waiting to be done--after the Federal Reserve has acted in the variety of ways I just described--after the effect of this stimulus package begins to kick in, the third thing that needs to be done is we need to take up and develop and pass and send to the President a consensus housing recovery package.

The elements I have described already enjoy support, in most cases, from Democrats and Republicans, including the administration. A lot of the ideas have merit. My hope is we will have, in the next day or two, the opportunity to debate those individual proposals. For folks who want to amend them, in some cases strike them, in other cases to add new provisions, terrific. That is the way this system is supposed to work. That is the way this place is supposed to work.

My hope is in a very short while we will be gathered on this floor offering amendments to the package that Senator Dodd and Senator Shelby and our staffs are going to be working on to get things going, to get things done. The people of my State did not send me here to just talk about our problems. They sent me here to do something about them. We have a great opportunity to take the next step, I say the third in a trilogy of steps, that will help get our economy out of a ditch and hopefully head in the right direction.

The best thing that can happen is we can demonstrate to people in this country that Democrats and Republicans, in an election year, can set aside our political differences and figure out the right thing to do to help stabilize the housing situation and put us on the road to recovery. That is going to lift the spirits of a lot of people and give our friends in the media a different kind of story to report--not the story they report day after day after day, a drumbeat of all the things going wrong in this county, but to start reporting some things that are going right in this country. As those more positive, uplifting, inspirational stories begin to appear, recessions have a way of turning into recoveries. That is exactly what we need right about now.

Mr. President, with that, I do not see anyone else waiting to speak on the floor, so I suggest the absence of a quorum.

Madam President, I understand the time that has been allocated--I think 8 minutes left on our side--is leader time that has been allocated to Senator Dodd, the chairman of the Banking Committee. He is not going to be here until after the vote to use that time. Our staff has been good to say that the time might be made available to me. I wish to enter into a colloquy, if I may, with Senator Martinez, who is a former Secretary of HUD in a previous life and a valued member of the Senate Banking Committee.

We are going to have a vote in a few minutes on whether to proceed to a housing recovery package which has a number of positive elements in it. It is one that was largely put together by the Democratic side, but there is a willingness on our side to certainly accept amendments offered by our Republican friends.

As it turns out, the administration's top three priorities, as Senator Martinez knows, in the housing recovery package that we might go to at this time would be GSE regulatory reform for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, FHA modernization, and it would also include the ability for State housing authorities to issue additional taxes and revenue bonds that can be used for helping refinance homes that are going or have gone into foreclosure. Those are the top three proposals of the administration. The third one is actually in our Democratic proposal on housing recovery. The other two, Chairman Dodd and Senator Shelby met, I am told last night, with the ranking Republican and the chairman on the House side on FHA modernization, and they have made good progress toward a final consensus, maybe a good preconference agreement. On GSE reform, the House has passed by a wide margin legislation to provide for that regulatory reform and also to provide for the creation of an affordable housing fund, something strongly pushed and supported by Senator Jack Reed for a number of years.

There is a whole lot, frankly, that we have in common. We are going to vote in a few minutes on a motion to invoke cloture on the motion to proceed to the proposal that was brought to the floor by our Democratic leader. My fear is we are not going to get consent to proceed to the bill, which, on the face of it, is unfortunate because I believe there is a whole lot more agreement here than one might imagine.

I yield to my friend from Florida to add to this discussion and take away

whatever he might wish. I actually believe there is more in common by far than there is in disharmony.

Reclaiming my time, Madam President, I say in conclusion that the American people want us to get things done. They want us to address the mortgage crisis. There is a way to do that that involves some very good Democratic ideas and some very good Republican ideas. Frankly, there are a number of good ideas we share in common, and there is a whole lot more we share than we do not.

At the end of the day, I think Senator Isakson's tax credit idea could be accepted in some form to go with some increase in CDBGs, community development block grants. We could do both, maybe not as much of either as was originally proposed but a little of both. Let's see how they work and then, after a year or so, see if there is one or the other that makes more sense to do additionally.

I think what is going to happen today, unfortunately, is we are going to have this vote on a motion to invoke cloture on the motion to proceed on the housing package. It is going to go down. My hope is that as soon as it goes down, if it does, my leader, Senator Reid, and the Republican leader, Senator McConnell, will go through a finite list of amendments, maybe five or so on a side. We are not interested in nongermane amendments. We are interested in amendments that speak directly to the housing crisis on our side and the Republican side, and we ought to be able to define that list. Senator Isakson's idea is one. Senator Martinez has a couple of good ideas, one he shares with Senator Feinstein. Senator Specter has some ideas on bankruptcy provisions that I may not support, but they certainly deserve to be debated and heard. And we have some ideas on our side as well.

My hope is, again, if this goes down today, that it is just a hiccup and not a heart attack, that we are going to come back and actually go to work to develop a consensus package that I know is there. It is literally there within our grasp. We can have not just a Democratic or a Republican win or a win for the administration, but we are going to have a win for the hundreds of thousands of people who are in danger of losing their homes. We can do something about this in the next several days, and we need to. I am going to join hands and arms with my colleagues, Senator Martinez, Senator Dodd, Senator Shelby, and others who care as passionately about this issue as we do, to join our leaders in making sure we do get the job done.

I yield back whatever time I have remaining. I thank my friend from Alabama for his graciousness in yielding time.

Mr. President, I rise today to introduce the Improper Payments Elimination and Recovery Act of 2008.

At first glance, a bill with a name like that might not seem too exciting. But I can assure my colleagues that it addresses a serious, largely unknown problem that is a real threat to our fiscal well being.

Each year, agencies are required to look at all of their programs and activities and determine which are susceptible to significant improper payments. For those that are deemed at risk, agencies must produce estimated error rates that are included in their year-end financial statements. They must also come up with action plans for reducing their errors.

In fiscal year 2007, agencies are estimated to have made nearly $55 billion in improper payments. That is an astounding number, Mr. President.

We spend so much time around here throwing around numbers like $55 billion that they begin to lose their meaning. So I want to take a minute or so to put that number in perspective.

I was surprised to learn that $55 billion is more than the total budget for the Department of Homeland Security. It is also twice as much as we're projected to spend to protect the vehicles our soldiers are using in Iraq against roadside bombs.

To illustrate further the amount of money we are talking about, $55 billion is just a little bit less than the total GDP of Vietnam. It is a little bit more than the GDPs of Croatia and Slovakia. Most astoundingly, $55 billion equals the combined GDPs of 44 of the smaller countries in the world.

So our Federal Government is likely wasting more money than the total populations of many countries produce in a given year.

But $55 billion is not even a real number. It is likely just the tip of the iceberg. It includes no error estimates for massive programs like TANF, SCHIP, and the Medicare Prescription Drug Program. So I expect that we will see more than $55 billion in improper payments next year and the year after.

My colleagues and I on the Homeland Security and Governmental Affairs Committee's Subcommittee on Federal Financial Management have held six hearings focused on this issue now, including one this afternoon. What we

have learned is that, in some cases, agencies are just not taking their responsibility to deal with and address their problems with improper payments and the management weaknesses that can cause them. The bill I am bringing forward today addresses just about all of the failures and deficiencies we've learned about through our oversight.

My bill starts by improving transparency. OMB right now has set the reporting threshold for improper payments too low, meaning millions of errors go unreported--and potentially unaddressed--each year. I want to lower the reporting threshold so that Congress and the general public have a better picture of the problem we face.

My bill would also help to prevent improper payments from happening in the first place by requiring that agencies come up with stronger corrective action plans and aggressive error reduction targets. It would also implement a recent recommendation from GAO that called on OMB to develop a process whereby agencies would receive regular audited opinions on the financial controls used to prevent improper payments before they happen.

My bill would also force agencies to be more aggressive in recovering improper payments they make. Some agencies--and most private sector firms--regularly go over their books to identify payment errors and get back overpayments made to contractors and others they do business with. We haven't done that enough in the Federal Government. Even as the agencies are reporting more and more improper payments, the amount recovered remains miniscule. I want to change this by requiring that all agencies with outlays of $1 million or more perform recovery audits on all of their programs and activities if doing so is cost effective.

Finally--and perhaps most importantly--my bill would hold agencies accountable. Today, as I mentioned, some agencies do not appear to be taking improper payments very seriously. I want to force agencies to hold top managers accountable for their progress--or lack of progress-- in doing something to take better care of the tax dollars we entrust them with.

I look forward to working with my colleagues to get these important reforms enacted. I am sure we can all agree that allowing this level of waste to continue unchecked is reckless and unacceptable.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I rise today to introduce the Improper Payments Elimination and Recovery Act of 2008.

At first glance, a bill with a name like that might not seem too exciting. But I can assure my colleagues that it addresses a serious, largely unknown problem that is a real threat to our fiscal well being.

Each year, agencies are required to look at all of their programs and activities and determine which are susceptible to significant improper payments. For those that are deemed at risk, agencies must produce estimated error rates that are included in their year-end financial statements. They must also come up with action plans for reducing their errors.

In fiscal year 2007, agencies are estimated to have made nearly $55 billion in improper payments. That is an astounding number, Mr. President.

We spend so much time around here throwing around numbers like $55 billion that they begin to lose their meaning. So I want to take a minute or so to put that number in perspective.

I was surprised to learn that $55 billion is more than the total budget for the Department of Homeland Security. It is also twice as much as we're projected to spend to protect the vehicles our soldiers are using in Iraq against roadside bombs.

To illustrate further the amount of money we are talking about, $55 billion is just a little bit less than the total GDP of Vietnam. It is a little bit more than the GDPs of Croatia and Slovakia. Most astoundingly, $55 billion equals the combined GDPs of 44 of the smaller countries in the world.

So our Federal Government is likely wasting more money than the total populations of many countries produce in a given year.

But $55 billion is not even a real number. It is likely just the tip of the iceberg. It includes no error estimates for massive programs like TANF, SCHIP, and the Medicare Prescription Drug Program. So I expect that we will see more than $55 billion in improper payments next year and the year after.

My colleagues and I on the Homeland Security and Governmental Affairs Committee's Subcommittee on Federal Financial Management have held six hearings focused on this issue now, including one this afternoon. What we

have learned is that, in some cases, agencies are just not taking their responsibility to deal with and address their problems with improper payments and the management weaknesses that can cause them. The bill I am bringing forward today addresses just about all of the failures and deficiencies we've learned about through our oversight.

My bill starts by improving transparency. OMB right now has set the reporting threshold for improper payments too low, meaning millions of errors go unreported--and potentially unaddressed--each year. I want to lower the reporting threshold so that Congress and the general public have a better picture of the problem we face.

My bill would also help to prevent improper payments from happening in the first place by requiring that agencies come up with stronger corrective action plans and aggressive error reduction targets. It would also implement a recent recommendation from GAO that called on OMB to develop a process whereby agencies would receive regular audited opinions on the financial controls used to prevent improper payments before they happen.

My bill would also force agencies to be more aggressive in recovering improper payments they make. Some agencies--and most private sector firms--regularly go over their books to identify payment errors and get back overpayments made to contractors and others they do business with. We haven't done that enough in the Federal Government. Even as the agencies are reporting more and more improper payments, the amount recovered remains miniscule. I want to change this by requiring that all agencies with outlays of $1 million or more perform recovery audits on all of their programs and activities if doing so is cost effective.

Finally--and perhaps most importantly--my bill would hold agencies accountable. Today, as I mentioned, some agencies do not appear to be taking improper payments very seriously. I want to force agencies to hold top managers accountable for their progress--or lack of progress-- in doing something to take better care of the tax dollars we entrust them with.

I look forward to working with my colleagues to get these important reforms enacted. I am sure we can all agree that allowing this level of waste to continue unchecked is reckless and unacceptable.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

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

The PRESIDING OFFICER (Mr. Tester.) Without objection, it is so ordered.

Mr. President, it is almost 2 o'clock. This afternoon, as I understand it, the Senate Finance Committee is beginning to convene and to gather to debate the economic stimulus package which has come over to us from the House and to see what changes, if any, we might want to make in the Senate. I wish them good luck and Godspeed.

If you look at the history of stimulus packages in this country--I came to the House in 1982, was here for a while, went off to be Governor of my State, and came back at the beginning of this decade. But the history of stimulus packages is, sometimes we seem to pass them, and we have passed them after some delay. We have passed them actually after we have not only gotten into a recession, but we were actually coming out of a recession. And rather than being helpful as you go into a recession, turning things around, the stimulus package can be inflationary, an after-the-fact thought, and not all that timely, not all that helpful.

When we hear advice from economists and others on putting together a stimulus package, we hear the three Ts. The first of those is ``timely.'' And the House has acted in a very timely way, working with the administration, to put together a package, not a bad package. I commend Speaker Pelosi and Secretary Paulson for the work they have done. It is not a perfect package, but I do not know that any of us could draw up a package that would be.

It is timely. It has come to us expeditiously. It has come to us on a day on which I believe the Federal Reserve is meeting to discuss whether they might want to lower the Federal funds rate by another quarter or half a percent on top of the three-quarters of a point reduction they adopted actually a week and a half ago.

A second piece of advice we have always gotten from economists and policy wonks on recession stimulus packages is, not only should it be timely, but it should be targeted; that is, the money should go to those places where the money will not simply be taken by whoever receives the benefit of a stimulus package and save more money, but would actually take the money and put it back into the economy to help get the economy moving.

I heard earlier today some discussions going on in the Budget Committee. One of the witnesses was saying he was rather skeptical and dubious of a stimulus package and said it is like the Federal Government borrowing money and taking that money out of one pocket and putting it in the other.

If we simply take the money from a stimulus package that the Federal Government might try to infuse into the economy, we give it to people who put it into their pockets who are just going to save the money, I do not know that we do a whole lot of good in stimulating the economy. That is not to say we do not need to save more money in this country of ours; we do. But I am not sure in the near term that is going to help move the economy. So the idea behind this stimulus package is, it ought to go to folks who need the money, who will spend the money. In some cases people are desperate for the money, people who might be desperate to feed their families, desperate to pay their heating bills in the winter. But they are going to take that money, whatever it might be, and infuse it, put it back into the economy quickly.

The third T that we have heard a whole lot about is the T for ``temporary,'' the notion here being that we face a significant budget deficit. We do not want to prolong that or make it worse long term. We do not want to dig an even deeper hole than we are in as a result. We want the stimulus package to be of a temporary nature, to help us avoid a dip, avoid a recession if we can. And if we are going to have one, to make it shorter than would otherwise be the case.

The package that has come to us from the House has a good deal recommended. I have never been wild about tax rebates, but I think I supported one back in the earlier part of this decade about 3, 4, 5 years ago. But the package that we have on tax rebates from the House actually is pretty well targeted.

As I recall, there is maybe a $1,200 rebate that would go to folks, to a family, if you have two bread winners in the family. For an individual, it would be $600. There is a cap if your income is above a certain level, maybe $150,000 for a family, about half that or so for an individual. If your income is above those levels, you don't receive the rebate. We can quarrel whether $150,000 is too high or too low. It is what it is. It is better than having no cap at all. There are some who believe we should simply send out a rebate to everybody, $1,200 for a family and $600 for an individual. The problem with doing that is, it is little bit akin to taking money from the Federal Government out of one pocket and putting it into the pocket of another family who is not going to spend the money. They are not going to put the money back into the economy. They may save it. That is all well and good, but it is not going to do much to stimulate the economy.

My hope is the Finance Committee will decide we will have a rebate and make sure it is targeted to those folks who are the most in need of some financial help and that any tax rebate we do reflects that. We had economists in recent weeks who have said to us, in testimony and other public forums, we can actually gauge what bang for the buck we get out of Federal stimulus dollars. We are told that if we actually put money into extending unemployment benefits, we get about a buck 75 for every dollar of stimulus we provide. If we put that money toward folks to increase slightly their food stamps, it is about the same. For every dollar we put into that, we get about a buck 75. We don't get quite that kind of return on a tax rebate, particularly if there is no cap. If there is a cap and the money is directed toward lower income folks, it is a better bang for the buck than would otherwise be the case.

My hope is that as the Finance Committee considers what kind of package to put together, they will make sure there is some kind of reasonable cap on any tax rebate we send out.

With respect to unemployment benefits, it makes a lot of sense to extend unemployment benefits, but I would target them. I would especially target them to States where levels of unemployment are high. I think about Ohio. My heart is still with the Buckeyes. They are going through a tough time. As to the folks up in Michigan, I am a huge Detroit Tigers fan, but I also care about the people there and other places where unemployment rates are 8, 10 percent and where people are in some desperate straits. I hope we would target the unemployment benefits that we will extend, whether it is 13 weeks or 26 weeks, to particular places such as those States. For States that are enjoying economic good times, where the rate of unemployment might be 2 or 3 or 4 percent, we ought to be careful about extending unemployment benefits. Certainly, 26 weeks doesn't make a lot of sense to me in those cases. Under current law, people are already eligible for 26 weeks of benefits, and in places

of low unemployment, I don't think it makes sense to add another 26 weeks on top of that. If we had unlimited dollars, that would be well and good. But we have a deficit. It is getting bigger. The idea would be to target it accordingly.

The same thing with food stamps. In a perfect world, I would actually not argue for having food stamps as part of a stimulus package, even though we know it is actually a pretty good stimulus, and there is a need out there. Last fall, we debated in the Senate, as they did in the House, a farm bill. A big part of the farm bill is not just aid to farmers or conservation funding for farmers to conserve open spaces. It is not just helping commodity crops or specialty crops. A big part is nutrition funding, which includes food stamps. I would not say we are close to reaching a compromise between the House and Senate on the farm bill, but my hope is we will get there within a couple months. If we are going to end up including in the stimulus package some provisions dealing with food stamps, I hope we would not make it a long time. I think you could argue for maybe a 3 months' provision. We could come back and extend that if we wanted to, maybe at most 6 months. But I would urge us not to go much beyond that. What we should do is finish our work on the farm bill, work out a compromise between the House and Senate, something the President will sign, and address nutritional needs as part of the stimulus package we are talking about. With respect to food stamps, do that in the farm bill, not in the stimulus package. If we are going to do it in the stimulus, do it for several months, not a year or more.

The Federal Reserve has already done us a big favor in cutting the Fed funds rate, the rate of interest banks charge when they lend money to one another overnight. They dropped it down by three-quarters of a percentage point. That has an immediate effect, a significant effect. It sends a very hopeful signal not just to markets but to households and all kinds of folks who are in businesses needing credit. I commend the Federal Reserve. My hope is they take it a little further today and lop off another quarter percent. I don't know that they will do more than that, but that would be welcome.

In a way, we overestimate the importance of a stimulus package that we adopt. We spend a lot of time wringing our hands and trying to get it right, working out a compromise between all the different sides. In the end, the impact of our package from the Congress and the White House is actually modest compared to the impact you get from a cut in the Fed funds rate by the Federal Reserve of a full percentage point.

I close with maybe two or three points to keep in mind. One, in putting together a stimulus package, make it targeted, timely, temporary. Two, to do no harm, for us not to do something that is foolish. I would suggest that a tax rebate that goes to Warren Buffett and Bill Gates and the wealthiest people doesn't make a whole lot of sense in an age when the budget deficit is approaching $250 billion. Let's not do anything foolish, do no harm. And three, maybe one of the best things that can come out of a stimulus is to convey to the folks who are struggling or having a tough time making ends meet, maybe aren't very hopeful, that we can work together. Even in an election year, a lot of politics in the air, we can set differences aside and come together on a package which makes sense, which will be helpful to a lot of folks and to either help us avoid a recession or maybe make it more shallow and of shorter duration.

Among the pieces of the House package that I thought were most meritorious was some stuff people don't think about very much. One of them deals with something called GSEs, government-sponsored enterprises. There are about three that I think a fair amount about. One is Fannie Mae. The other is Freddie Mac. The other is the Federal Home Loan Bank system which raises money for lending for home ownership. There is a proposal that would allow the government- sponsored enterprises, the big financial behemoths of Fannie Mae and Freddie Mac, to have larger mortgages in their portfolio than they are currently allowed. I think they are currently allowed roughly $400,000, and there is a suggestion that they be able to take on loans to $700,000 or so. That is fine to do for a short period. I don't think we should make it permanent. I don't think we should do it even for a year. The reason is, we need to come back and provide a strong independent regulator for Fannie Mae and Freddie Mac. If we simply make this change to allow them to put larger mortgages in their portfolio, it is a little bit like saying you, eat your dessert, but you don't have to eat your vegetables.

That is all well and good. They would like to be able to buy larger home mortgages and put them in their portfolios, high-cost places such as California and some places in the Northeast, but at the same time they need to eat their vegetables, and they need to have a strong, independent regulator who will be there to set the right kind of capital standards and to ride herd on these entities to make sure they don't get into trouble and, by doing so, get the rest of us in trouble.

The other thing we need to do--and I don't think it is part of the bill the House has sent us, but it might be--deals with FHA, the Federal Housing Administration. FHA is 75 years old this year. Sometimes people wonder, where did we ever get this 30-year fixed rate mortgage that people could prepay. Where did it come from? It came from the FHA. It has been around a long time. FHA was the birthplace of what we think of as the traditional mortgage. The FHA, as recently as a dozen or so years ago, was involved in mortgages that went to maybe 20 percent of the homes being bought and sold. Twenty percent used FHA. Today it is about 5 percent. The difference between that 20 percent and that 5 percent for the most part is people have gone into the subprime market, and they have gotten these adjustable ARM mortgages.

People have been lured by teaser rates. Now these adjustable ARMs are resetting. It might have been a teaser rate of 2, 3, 4 percent. They are now going at 7, 8, 9 percent. The folks who got into these exotic mortgages are finding they can't refinance, and they are stuck with some kind of significant penalty or maybe being stuck altogether. What we need to do is bring the FHA of the 20th century into the 21st century and make it relevant for folks looking to buy a house today. We passed legislation in the Senate. They are actually not that far apart. We reduced the amount of downpayment from 3 percent to 1.5 percent for an FHA loan on a home mortgage. And we do some things. We require folks to get the kind of counseling they need. We do a better job on reverse mortgages. When people are old and their houses are basically paid for, they can actually live on the equity of their home for the rest of their lives. The idea would be to make those more readily available to people who could use that kind of help later in their lives.

There are a variety of other changes in the FHA that need to be made to make it relevant for today. Those are examples of some.

As much as anything that we would do in the stimulus package that is being debated right now in the Finance Committee, we need to come to closure on reauthorizing the FHA and bringing it into the 21st century. While we are doing that, we need to go ahead and raise the cap on the amount of loans, the size of the loans and mortgages that can be bought and put into the portfolios of Fannie Mae and Freddie Mac, but only for 6 months, with the idea that between now and 6 months from now, the House and Senate will hammer out a compromise, signed by the President, that will provide for a strong, independent regulator for Fannie Mae and Freddie Mac, for Federal Home Loan Banks. If we do all that, we will convey not just a sense of hope, but we will do something that goes beyond a mere stimulus for a couple months. We will address the underlying problem that got us into this mess, the subprime lending mess in the first place because what we will do is say to the folks who have marginal credit, who otherwise would maybe have to rely on these exotic mortgages, these adjustable ARMs, instead of having to rely on something such as that, they can rely on the FHA, as people have done for a generation, because we have made it relevant for your lives and for your needs.

That is the view from Delaware today. My hope is some of that will be

prevailing later today in the Senate Finance Committee, and we will have an opportunity to take it up and debate it tonight and tomorrow.

I suggest the absence of a quorum.

Mr. President, I wish to recognize and congratulate Leon N. Weiner & Associates for their success with the Village of Eastlake in Wilmington, DE. For almost 60 years, Leon N. Weiner & Associates has been doing outstanding work for the housing industry in Delaware and surrounding areas. Their work on the Village of Eastlake has made such a positive impact that the readers of Affordable Housing Finance Magazine recently named it the Nation's best affordable home ownership development.

The Eastlake neighborhood, which was built in 1943, was locally known as ``the Bucket,'' meaning if people lived in Eastlake, they had hit the bottom of the bucket. The 267-unit public housing development, one of many in a crime-ridden neighborhood, became dilapidated despite the best efforts of the Wilmington Housing Authority. Violent crime and drug abuse grew to proportions exceeding some of the worst per capita crime rates in the Nation. In 1997 alone, Wilmington police were called to Eastlake over 5,000 times.

After a decade of work, Leon N. Weiner & Associates transformed the site, which is about the size of three city blocks, into the Village of Eastlake, an affordable housing project consisting of 70 rental and 90 home ownership units. Furthermore, their work here has helped jumpstart additional affordable housing projects in the city of Wilmington. A nonprofit and a for-profit firm have teamed up to build 72 town homes in the neighborhood, as well.

All 90 units--62 town homes and 28 duplexes--at Eastlake consist of three bedrooms. The homes are reserved for households with widely varying incomes--as low as 26 percent of the area median income up to a high of 115 percent. Fifty-nine homes are reserved for households earning between 26 percent and 80 percent of the area median income.

The success of Eastlake could not have been reached without the added help and efforts of many other entities, including the U.S. Department of Housing and Urban Development, PNC Bank, the Federal Home Loan Bank of Pittsburgh, and the State of Delaware, which provided much needed funds.

Once again, I wish to recognize Leon N. Weiner & Associates. Their work in the Eastlake community is commendable and most deserving of Affordable Housing Finance Magazine's Reader's Choice Award. They are an invaluable asset to our community, and I wish them all the best.

On a point of personal privilege, Leon Weiner, who passed away in 2002, was a personal friend of mine for over three decades. In fact, he was one of the first people I met after enrolling in the University of Delaware's MBA program in 1973. More importantly, throughout his life he was one of the strongest voices in this country calling for the creation of affordable housing for all Americans. He fervently believed that all families need and deserve a decent place to live, and he worked tirelessly to ensure that government, the private sector, and nonprofits work together in pursuit of this goal. Unfortunately, he did not live to see one of his last dreams Eastlake become a reality, but it serves as a fitting memorable to him and to the team of dedicated men and women he led at Leon N. Weiner & Associates. Together, they demonstrated and continue to demonstrate that it is possible to do good and do well at the same time.

Mr. President, I thank the Senator for his leadership on this issue to bring us to this day and my friend from Oklahoma who offered the amendment before us. He raises a good point, and it is one that should be addressed in the conference to follow. My hope is that some of the concerns he raised will be addressed. I don't know that his amendment will be approved today, but the points he made are not without value.

We have had FHA for 70 years. The reason we have it is because in the Great Depression, we realized we needed to encourage home ownership in this country, and we still do. For many years, FHA was the go-to guy, if you will, for folks who had marginal credit, maybe were not homeowners, were first-time homeowners and they needed help to get them in position to qualify for loans and become homeowners.

There are all kinds of virtues that flow from home ownership. I will not get into them all. They are many and valid.

In recent years, we have seen people who normally would have gone to the FHA, first-time home buyers or people with marginal credit, to get a guaranteed home loan--in recent years, instead of 15 percent of American loans being purchased through FHA mortgage, we see the trend down. Today, it is roughly 5 percent. That difference is 10 percent of the people. A lot of people have gone to subprime lenders. A lot have gone to mortgages that, frankly, in the long run don't make sense. They might get a teaser rate the first couple of years of 3 or 4 percent and then see the rate go up to 7 percent, 8 percent, or 10 percent and find themselves in a mortgage vehicle they cannot get out of because there is no ability to escape.

We need to get that 5 percent of loans, home mortgages guaranteed by FHA, back up closer to 15 percent. We are not going to do it with the FHA of the 20th century. We have to bring the FHA into the 21st century. That is what we do with this legislation. We bring it into the era in which we live today.

I wish to mention a couple of the changes that are made possible with this legislation. Among them is loan limits. Today, it is about $365,000. They are going to go up to roughly $415,000 to reflect the change in the marketplace.

The downpayment FHA required of home buyers for years is 3 percent. If you buy a home for $200,000, the downpayment is $6,000. We cut that in half to 1.5 percent. So the downpayment for a $200,000 house will be about $3,000 to make home ownership within reach.

Also, the legislation removes the caps on reversible mortgages from currently $150,000 to really to no cap. We are going to consider that and we

should consider that in conference, I hope with the input from the GAO.

Finally, the bill creates--and I think this is important and speaks to the concern raised by Senator McCaskill--it creates a prepurchasing counseling program.

I am convinced it is not strong enough. Senator McCaskill authored legislation--and I suppose some of us will join her in sponsoring that legislation--to strengthen this provision to make sure, if you or I qualify through FHA, we want to make sure the folks going to the FHA making that loan are getting the kind of counseling they need and not somebody who is there to set them up and take advantage of them.

This is not the only step we need to take to get us through the subprime lending morass for home mortgages. The Paulson freeze announced last week is a good idea. Interest rates would be frozen for 5 years for folks in these adjustable rate mortgages that are about to reset and raise the rates. That is a good first step. This is a good second step.

A good third step is to ban predatory lending practices. Legislation passed the House and is about to be considered in the Senate.

Last point. This is what Senator Schumer and I are interested in: GSA reform. That is the last piece. It would include a low-income affordable home program too.

I thank the chairman for yielding. I commend him and the young man sitting next to him, David Strickland, who has done great work, as has a member of my staff, Beth Osborne, seated behind me.

We can talk about what might have been and how this legislation could have been better, more comprehensive. Six months ago I stood here and said, there are three things we need to accomplish with respect to fuel efficiency for cars, trucks, and vans. No. 1, we ought to reduce our dependence on foreign oil. No. 2, we should reduce the emissions of harmful stuff up into the air. No. 3, we should accomplish goals 1 and 2 without undermining the competitiveness of the domestic auto industry.

Tonight as we are on the verge of passing this legislation, we will reduce our dependence on foreign oil, we will reduce harmful emissions, and we will not undermine the competitive advantage of our domestic auto industry. It is not enough for us as a Congress to say to the auto industry, raise fuel efficiency standards, eat your spinach. We have a responsibility to help them. In this legislation we do any number of things to help the industry--major investments in R&D, new battery technology--just as we had invested previously Federal dollars in fuel cell technology for cars, trucks, and vans. Secondly, using the Government's purchasing power to help commercialize the new technology both on the civilian side and on the defense side to make a market for these new products. Three, to use tax incentives for hybrids, for low- emission diesel in order to encourage people to buy these vehicles.

We can lament what might have been. Let me say in graphic terms what this legislation means. Today we import about 2.5 million barrels of oil per day. By 2020, this legislation will save that much oil or more. Today we emit huge amounts of CO2 into the air. We

warm our globe and imperil our future. This legislation will reduce carbon dioxide emissions by about 20 percent, essentially taking 60 million cars off the road by 2020.

Finally, we are going to say this is based on $3-a-gallon gasoline. But we are going to save consumers close to $100 billion at the pump in the year 2020. Those are huge savings. They are tangible savings. We, as Democrats in the majority, have an obligation to lead. We have led. We have worked with the auto industry, the UAW. We have worked with our Republican brethren.

The American people want us to get things done. They want us to find a way to set aside partisan politics and work together. I think in this instance we have done that. I commend Senator Inouye and Senator Stevens, and I commend Senators Boxer, Bingaman, and Domenici, our staffs who have worked so hard.

I thank the auto industry, the UAW, our friends over in the House, including John Dingell, Speaker Pelosi, and Majority Leader Steny Hoyer.

This a victory not just for the Democratic Party and the Republican Party, and not just for the Congress, this is a victory for America. We can be proud of this, and I am.

Mr. President, today I celebrate the tenure of Wesley College president Dr. Scott D. Miller. After 10 years as president, Dr. Miller will step down to assume leadership of Bethany College in my home State of West Virginia in January 2008.

Founded in 1873, Wesley College is located on 50 acres in historic Dover, DE. Delaware's oldest private college, the school offers 30 bachelors and 4 associates degrees, and master's degrees in nursing, education, business administration and environmental science.

I first met Dr. Miller in 1997 when I was Governor of Delaware, and he was appointed as the 15th president of Wesley College. During his tenure, the college proudly reported record applications, a climbing enrollment, increased alumni participation and a greater minority presence. For these and other accomplishments, Dr. Miller has been nationally acclaimed for his contributions to higher education.

Under Dr. Miller's leadership, Wesley experienced substantial growth, including total enrollment increases from 1,052 to 3,210 and $67 million raised in the Campaign for Wesley fund, with more than $40 million earmarked for capital renovations and new construction. Dr. Miller oversaw the creation of four graduate programs and the establishment of a New Castle County campus for Adult Studies. In addition, he established an undergraduate nursing program and five other new undergraduate majors.

Beyond academics, Wesley College has also been granted membership in the selective Capital Athletic Conference and enjoys the addition of new varsity sports programs. Congratulations to the Wolverines who are again in the quarterfinals this year for the NCAA Division III South Region collegiate football championship.

To maintain Wesley's support of the local community, Dr. Miller was also instrumental in building an alliance with Delaware State University and the Friends of the Capital Theater to maximize the usage of the historic Capital Theater, positioning it as the premiere performing arts center in southern Delaware. The relationship was formalized in January 2007 with the three organizations becoming equal partners in the operation, management and programming of the theater.

In addition to all the accolades already mentioned, Scott and his family have become valued friends of mine and of many others in Delaware over the past decade. Dr. Miller's wife Ann is an educator in her own right and has been a full partner with her husband in supporting his efforts to lead Wesley to new heights. We were also lucky to have their daughter Ashlee serve as an intern in my Wilmington office this past summer.

Scott and Wesley College have also supported my charter school initiative in Delaware by being one of the first colleges in America to charter and provide space for a public charter school. Additionally, Wesley College was one of the first institutions to sign on as a partner of a homeownership initiative that I started in Dover by supporting the effort to increase homeownership rates in the capital city. Our new homeowners include employees of the

Aramark company which provides food services to Wesley College.

Prior to joining the Wesley community, Dr. Miller served as president, executive vice president, and vice president for development of Lincoln Memorial University; an interim public information officer at West Virginia Wesleyan College; and director of University Relations and Alumni Affairs at the University of Rio Grande.

Dr. Miller earned his bachelor's degree from West Virginia Wesleyan College, master's degree from the University of Dayton, education specialist from Vanderbilt University, and doctorate in higher education administration from the Union Institute and University. He has also completed postgraduate studies at Ohio University and Harvard University.

Outside of the college, Dr. Miller was an active community participant during his time in Delaware. He served on the board of numerous local and national groups including the National Association of Schools and Colleges of the United Methodist Church, the United Way of Delaware and the Greater Dover Commission. Dr. Miller was also an honorary commander of the Dover Air Force Base for 2 years and was selected to serve on the Joint Civilian Orientation Council by the Secretary of Defense.

I would like to personally acknowledge and sincerely thank Dr. Miller for the outstanding contribution he has made to Wesley College and the surrounding community over the past 10 years. The Millers have been good for Wesley, for Dover, for Kent County, and for Delaware. We will miss them a great deal.

Mr. President, while Senator Lautenberg is still on the floor, I wish to express my thanks and the thanks of my constituents in Delaware to him and Senator Lott for the partnership they forged in bringing us to the reauthorization victory we celebrate this afternoon.

Stephen Gardner is still on the floor. Stephen was a member of my personal staff when I was first elected to the Senate. He is succeeded by Beth Osborne. We have a great working relationship with him. He has great talent. He is someone who has not just been in Washington and the Senate, but he worked for railroads in the past, including Amtrak. Given his experience, he was invaluable in providing guidance and support in this process.

I wish to speak briefly, and then I am going to make a unanimous consent request that we go into morning business so that Senator Alexander and I may engage in a colloquy on another matter.

Let me say this: I have come from a meeting at the other end of the Capitol, that may still be going on, that started around 2 o'clock. I stayed for almost an hour and a half. The meeting involved members of organized labor and several leaders in the House of Representatives who have jurisdiction, Democrat and Republican, over infrastructure and passenger rail. The meeting was driven in part because of the threat of a potential work stoppage on our passenger rail system. It turns out that most Amtrak employees, hourly workers who work in the shops and work on the trains, have not had a pay raise in about 7 or 8 years.

That is not a good situation. In fact, I think it is a grossly unfair situation and very much a sad situation for them and for their families.

My hope, and part of my encouragement and support for this legislation, is that I think it provides a roadmap for going forward with passenger rail service in this country in the 21st century. We need a roadmap.

Senator Lautenberg and others have spoken as to why we need to do things differently--congestion on our highways and in our airports, in the skies, enormous reliance on foreign oil, too much bad stuff going into our air. There are all kinds of reasons people are beginning to ride trains more and more and why we need to provide supporting leadership at the Federal level, at the same time entering into partnership with State and local governments.

The beauty behind this legislation is that the Federal Government says we are going to take charge and upgrade the Northeast corridor, bring it to a state of good repair. In doing that, we unleash the potential in the Northeast corridor, including bringing in the more expensive high-speed Acela train which I helped create as a member of the Amtrak board when I was Governor of Delaware, to the extent we can just let them run at 100 miles an hour, 110, maybe something close to 150 miles an hour. Their ontime performance is up to 90 percent, and we would like to make it higher so we can fill up the seats on the Acela. We are close to doing that. They can be a cash cow in generating revenues we need to support other passenger rail service in the Northeast corridor and in other parts of the country.

One of the good provisions in this legislation is bringing the Northeast corridor into a state of good repair and authorizing money to be spent for that purpose, for capital improvement. Amtrak for years has been starved for capital. Along with providing pay raises for the employees, that is first and foremost what we need to do.

A second major change in this legislation, for areas outside the corridor, whether it is Tennessee or Colorado, in places where we have densely populated corridors, where the State and local governments would actually like to have high-speed or higher speed rail and run trains, maybe just for 200 miles or 300 miles, and provide better service such as they are doing out of Chicago and out of the west coast where ridership is up 10, 20, 30, even 40 percent--States are involved in that partnership with the Federal Government.

This legislation says if a Governor of a State--Senator Alexander and I are former Governors. When we were Governors, if we wanted to enter into an agreement with the Federal Government to build a new road or highway, the Federal Government would provide 80 percent. If we wanted to get improvements to our airports, the Federal Government provided 80 percent of the money and the State provide 20 percent. If we wanted improvements with respect to transit service, the Federal Government would provide 50 percent, and the State would provide half.

But a better solution, a more cost-effective solution, happens to be intercity passenger rail, and the Federal Government provided zero and the State had to provide all the money. Even if intercity passenger rail was a smarter solution, it received no support from the Federal Government. This bill changes that situation. It puts passenger rail funding on the same level as airports and the same level as roads, highways, and bridges.

It makes a whole lot of sense. If States believe they would rather spend their 20 percent on airports, roads, highways, or bridges, they can do that. But if they think rail makes sense as part of the solution, they can do that as well with the same kind of incentive. That is good.

There are a bunch of long-distance trains that don't make money; they lose money, quite a bit of money. We have 16 long-distance trains in this country. We direct the Federal Railroad Administration to take five of those long-distance trains next year, five the year after that, and five the year after that and scrub them, look at them, look at what they are doing well and what they are doing badly and what we need to do to reduce the amount of money we are spending to provide passenger rail service in those areas.

I don't want to run trains if people don't want to ride them. That is not what we should be about. The real secret to doing well with passenger rail in this country and, frankly, other countries is to find those densely populated corridors. There are a lot of them. A lot are along the coast. Over half the people in our country live within 50 miles of one of our coasts. We have corridors up and down the east coast from Maine to Florida, the gulf coast, the west coast from San Diego up to the Canadian border, up to Vancouver, in fact.

Passenger rail can do a lot to help us there, particularly 300-, 400- mile routes. People would just as soon ride a train on the Northeast corridor than to drive or take an airplane.

Another thing that makes sense is these corridors in our country, such as Chicago to St. Louis--that is a great corridor and there are others like that corridor in other parts of the country where passenger rail can be part of the solution. Those are the kinds of things we wanted to work on, to build.

Finally, some are interested in competition for freight rail. If they want to come in and run passenger rail service, under this legislation they can compete if they want to. They are not barred from competing. They have the opportunity to do that as well, and the legislation encourages that kind of competition.

I will close with this comment. My hope is that the reauthorizing legislation we passed today will be warmly received in the House. I think it will be. I am encouraged that it will be.

Second, I hope it demonstrates to our colleagues, Republicans and Democrats, House and Senate, that we are not going to be business as usual at Amtrak. There is a new day and, frankly, a better business strategy going forward. My hope is that confidence will be reflected in greater appropriations bills, in the House and in the Senate, so Amtrak cannot only make the kinds of investments in infrastructure for Amtrak--rail, overhead wires, signaling systems, rolling stock--but also

to say to these folks who haven't had a pay raise in the last 7 years or so: We are going to address that inequity too.

My hope is we can do all those, and the passage of this legislation will help us in that direction, plus reduce a little bit of our dependence on foreign oil, plus reduce the emission of bad stuff into our air, reduce congestion at our airports and in our skies and on our highways.

If we do all that we ought to declare victory. The thing I love most about what happened here this week and last week on this bill is Democrats and Republicans did it together; we actually worked together and I applaud the efforts of Senator Lautenberg and Senator Lott and I especially wish to say thanks to our leader, Senator Reid, for making time on the schedule for us to have this debate, to follow through on it; and my colleagues on both sides who participated in the debate and offered reasonable amendments, some of which were adopted. This place actually functioned the way I think people of this country expect us to.

Mr. President, I ask unanimous consent that the Senate now proceed to a period of morning business, with Senators permitted to speak therein for up to 10 minutes each.

I further ask unanimous consent that Senator Alexander and I be allowed to participate in a colloquy for 10 minutes apiece, up to 10 minutes apiece for a total of up to 20 minutes. I think what I would like to do initially is yield, if I could, to Senator Alexander for his comments and whatever he would like to say.

While he comes to his feet to speak first, let me say, I think the people in the country want us to work together. We have Democrats, we have Republicans, we have Independents in this country, and we realize we are not going to agree on everything. People realize that, but when we can agree, they want us to do that. They want us to use common sense, take the opportunity to work across the aisle and make sure that common sense is reflected, whether it is passenger rail service or the interest or noninterest in providing people protection from having their Internet access taxed, their e-mail traffic taxed, their instant messaging taxed.

I have had the great privilege of working with Senator Alexander for 3 or 4 years--in some cases maybe longer than we would like to remember--on the issue of tax moratorium, but he has been a great partner, and I especially want to thank him for letting me be his partner and say to Senator Enzi of Wyoming and Senator Voinovich of Ohio, both former mayors, Senator Feinstein--a former mayor herself-- Senator Dorgan, former revenue director for the State of North Dakota, and Senator Rockefeller, a former Governor of West Virginia, all of whom worked together as a team to try to bring us to this day, to where we are today, the House has adopted legislation we passed last year, providing for a 7-year extension of the Internet tax moratorium.

Let me say to Senator Alexander what a real privilege it is for me to have an chance to work with you on all kinds of issues, including this one. I thank you for that opportunity.

Mr. President, if I could reply to the comments of my friend, he mentioned the fact that we do things over the Internet today that frankly we didn't think of about 10 years ago. Initially, we would do dial-up. Eventually, later on, we would have other ways to access the Internet to send our e-mail or instant messaging. I never imagined 6 years ago we would ever be able to do telephone calls over the Internet. In my State and other States as well, those States and local government depend on revenues they raise from telephone services to help pay for schools, to help pay for police, paramedics, fire service.

Now we have moved along. Folks are actually able to send TV, apparently, over the Internet. In a bunch of jurisdictions, not so much States but local governments, they actually derived some of their revenues, not inconsiderable, over the years from cable services and a tax on cable services they collect.

My dad used to say different things. Probably everybody can remember much of what your mom and dad said in your lifetime. One of the main things I remember my dad saying to my sister and me is there are two things certain in life: One of them is death, the other is taxes.

One of the other things that is certain in life is change, particularly change with respect to technology and change with respect to how we use the Internet. One of the beauties of the compromise we have hammered out here with a lot of hard work and support from Senator Alexander and his staff member sitting right beside him, Lindsey, and on our side I especially thank Bill Ghent and Chris Prendergast for all their hard work and particularly our committee staffs who did a great job--but one of the beauties of the compromise we worked out is we have to come back and revisit this issue somewhere down the line 7 years from now.

The reason why that is important is because this is going to change. This technology is going to change. Our ability to use the technology and what we do with the Internet will change. It will be different 7 years from now. It is important for us to have the ability to come back.

I certainly lend a strong ``amen'' to what Senator Alexander said. As Governor, he was Chairman of the National Governors Association--so was Senator Voinovich. We have three Members of the Senate who previously were Governors and led the National Governors Association. We fought hard as Governors in order to convince the Congress to pass the law that President Clinton signed in 1995: No unfunded mandates.

We worked hard in 1998 to make sure that as the Federal Government came in, we kind of stepped on that 1995 law, and said: Well, we want to change it a little bit, what you can collect in terms of revenues. We passed the 1998 legislation, the moratorium on Internet tax access.

They grandfathered in about nine States and said: If you are already collecting, you can continue to collect, but watch yourself there, and we said to the other 41 States, the other jurisdictions, if you are not collecting, you cannot start. But the thing I like about the legislation, we are respectful of the grandfathers, the nine States; they can continue to collect taxes as they have in the last 8 or 9 years. But they can not do something new or different.

By the same token, if they are collecting tax revenues on traditional services such as telephone and cable, they are going to be able to continue to do that. I do not know about the rest of you, but I was reminded of this--my boys have grown up in public schools in Delaware. It is important that my State have the ability to collect taxes to help educate our children in my State and other States, every other State.

We have paramedic service in our State, statewide paramedics. We have fire and police. It is important to me that the city of Wilmington, in which I live, has revenues that they need to make sure we are safe; that if we pick up the phone for 911, somebody is going to come if we need them; if we have a fire in our house or in our neighborhood, that someone is going to come and put it out. I want to make sure our city and other communities have the revenue they need to do that.

The last thing I would say here--and this goes back to something my dad used to say to my sister and me, when we would pull some boneheaded stunt. I must have done it a lot, because he used to say: Use some common sense. He must have said that 1,000 times during the time I was a little boy to the time I left and went off to college: Use some common sense.

I think what we have here, as my colleague said last week, a victory, a victory for common sense, a victory for bipartisanship, a victory that protects the rights and interests and obligations of State and local governments, a victory for those of us who want to have access to the Internet and not be encumbered by additional taxes. It is a victory in all of those areas.

It has been a pleasure working with Senator Alexander and our colleagues on this one. We can set this one aside

for a while--I am sure we are both pleased to do that--and go on and maybe work on clean air issues, try to figure out how to protect the health of folks who are breathing sulfur dioxide and nitrogen oxide, and try to figure out how to do something with respect to climate change and maybe figure out how to use nuclear energy more effectively, to make all of that possible.

This has been a good--not a day's work but many months' work. I am delighted with the outcome. I thank my colleague and our colleagues who have worked with us and our staffs for getting us to this point.

The House of Representatives voted this afternoon. They took this up under suspension of the rules, the legislation we passed here last week. They passed the 7-year extension of the moratorium on Internet access unanimously, over 400-some votes to none. So we can feel good about that when we go home today.

Think about it. We have passed a good Amtrak bill, good passenger rail bill, worked across the aisle, thought outside the box. We did the same kind of thing with respect to protecting the rights of consumers, without stepping on the rights of State and local governments. I think we can be proud of that. I am, and I know my friend Senator Alexander is as well.

I yield to him for any last comments he wants to make.

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

Madam President, today I wish to celebrate the Quilts of Valor Foundation. In a time when thousands of American families are sending their loved ones around the world to fight for the safety and security of all of us here at home, the Quilts of Valor Foundation has stepped forward to give something back to our wounded heroes. This foundation has pledged to sew and donate a Quilt of Valor to every servicemember wounded in the Iraq and Afghanistan wars. Their mission is to offer comfort and support to our wounded heroes.

An organization not about politics, but about people, the Quilts of Valor Foundation was established in November 2003 by Catherine Roberts of Seaford, DE, Since that time, thousands of volunteers from all over the United States have created over 13,000 quilts for our injured service men and women. With the help of military chaplains at medical centers throughout the United States, Europe and in Iraq and Afghanistan, the Quilts of Valor Foundation locates wounded soldiers and presents them with a hand-made quilt. That quilt is a symbol of the respect and honor that we as a country hold for them and their sacrifice.

The organization has two main missions which frame their important service to our country. First and foremost, the Quilts of Valor Foundation is dedicated to honoring those men and women who have been wounded, whether physically or psychologically, in Iraq and Afghanistan with a Quilt of Valor. Second, the Quilts of Valor Foundation hopes that by teaching young people to quilt and by spreading a culture of volunteerism, a new generation of Americans will become more civically involved and dedicated to bettering our Nation in whatever way they can.

I would like to acknowledge and sincerely thank Catherine Roberts, the Quilts of Valor Foundation, and all the volunteers, especially those in Delaware, who put so much time, money, effort, and love into every quilt to comfort our servicemembers and let them know how much we at home value their sacrifices.

Mr. President, having had the privilege of serving with Paul Wellstone for a couple of years after arriving as a Senator, not knowing him as well as Senator Harkin knew him, I say amen to all the Senator from Iowa said and thank him for reminding us.

Mr. President, I yield the floor.