[Congressional Record (Bound Edition), Volume 154 (2008), Part 17]
[Issue]
[Pages 23505-23723]
[From the U.S. Government Publishing Office, www.gpo.gov]
[[Page 23505]]
SENATE--Wednesday, October 1, 2008
(Legislative day of Wednesday, September 17, 2008)
The Senate met at 10 a.m., on the expiration of the recess, and was
called to order by the Honorable Sheldon Whitehouse, a Senator from the
State of Rhode Island.
______
prayer
The Chaplain, Dr. Barry C. Black, offered the following prayer:
Let us pray.
Immortal, invisible, God only wise. In light inaccessible hid from
our eyes. You have promised in Your Word that ``In all labor there is
profit.'' Give our lawmakers today the profit of wise decisions that
will bless our land. Deliver them from the paralysis which fails to see
that, with many advisers, there is safety. Give our Senators the wisdom
to understand Your will and the courage to do Your bidding. If today,
Lord, You want them to avoid certain pitfalls, make Your way plain to
them. Infuse them with inspired ideas that will transform a turbulent
today into a tranquil tomorrow. May our Senators stretch out their
hands toward You, depending upon You to lead them to a safe harbor.
Hear our prayer, in the Redeemer's Name. Amen.
____________________
PLEDGE OF ALLEGIANCE
The Honorable Sheldon Whitehouse led the Pledge of Allegiance, as
follows:
I pledge allegiance to the Flag of the United States of
America, and to the Republic for which it stands, one nation
under God, indivisible, with liberty and justice for all.
____________________
APPOINTMENT OF ACTING PRESIDENT PRO TEMPORE
The PRESIDING OFFICER. The clerk will please read a communication to
the Senate from the President pro tempore (Mr. Byrd).
The assistant legislative clerk read the following letter:
U.S. Senate,
President pro tempore,
Washington, DC, October 1, 2008.
To the Senate:
Under the provisions of rule I, paragraph 3, of the
Standing Rules of the Senate, I hereby appoint the Honorable
Sheldon Whitehouse, a Senator from the State of Rhode Island,
to perform the duties of the Chair.
Robert C. Byrd,
President pro tempore.
Mr. WHITEHOUSE thereupon assumed the chair as Acting President pro
tempore.
____________________
RECOGNITION OF THE MAJORITY LEADER
The ACTING PRESIDENT pro tempore. The majority leader is recognized.
____________________
SCHEDULE
Mr. REID. Mr. President, following leader remarks, the Senate will
consider H.R. 7081, the United States-India nuclear agreement. This is
an issue that has been worked on long and hard for months and months.
Finally, we are having the opportunity to get to it. Senators Dorgan
and Bingaman have amendments to the bill that will be debated this
morning. Under an agreement reached yesterday, there will be up to 60
minutes for debate on the bill and 60 minutes on each amendment.
Following the debate on the United States-India nuclear legislation,
the Senate will proceed to consider H.R. 1424, the legislative vehicle
used for the economic rescue legislation. The only amendments in order
are a Sanders amendment regarding high-income individuals and a Dodd
amendment regarding economic stabilization. The Sanders amendment has
60 minutes for debate, and the Dodd amendment has 90 minutes for
debate.
The Senate will recess from 12:30 until 2:15 for the caucus
luncheons.
At 7 p.m., the Senate will resume consideration of the House message
with respect to the rail safety-Amtrak legislation, H.R. 2095.
At approximately 7:30 p.m., the Senate will proceed to a series of up
to seven rollcall votes in relation to Amtrak-rail safety, the United
States-India nuclear agreement, and the economic rescue package. The
Sanders amendment will be determined by voice vote. Votes will be in
relation to the following items: motion to concur with respect to H.R.
2095, Amtrak; the Dorgan amendment regarding clarifying the policy in
the event of an Indian nuclear test; the Bingaman amendment reporting
requirement in the event of an Indian nuclear test; passage of H.R.
7081, the India-United States nuclear agreement, which has a 60-vote
threshold--as do the two amendments, the Sanders amendment regarding
tax on high-income individuals and the Dodd amendment regarding
economic stabilization, which is a 60-vote threshold--and passage of
H.R. 1424, and there is a 60-vote threshold there.
____________________
FINANCIAL RESCUE PACKAGE
Mr. REID. Mr. President, yesterday Senator McConnell and I came to
the floor to discuss the way forward on the financial rescue package.
We agreed that now is not the time for politics or partisanship. Every
Member of this Senate could probably write a better bill than we have
here, but this was a jointly agreed upon bill. When I say jointly, I
mean the House and Senate working with people from the administration.
We agreed that now--I repeat--now is not the time for partisanship.
Literally, the security and well-being of the American people are at
risk, and we have to work together to solve this crisis. So last night,
Democrats and Republicans gave consent to move to a vote later today on
a package of bills that will stabilize our economy, restore confidence
among consumers and businesses, and create new jobs and economic
growth.
This package of bills will include the Emergency Economic
Stabilization Act, which will increase Federal coverage of bank
deposits to $250,000. It will have the Senate-passed tax extenders,
along with other things in it, including long-overdue legislation to
honor Senator Wellstone and Senator Domenici, who worked for more than
a decade--Senator Wellstone, of course, was killed in that unfortunate
airplane crash, but this has been going on for years while Senator
Wellstone served here in the Senate working with Senator Domenici. As
Senator Domenici leaves this body, he will now finally be able to claim
the ownership he deserves on this legislation to provide parity in
health care coverage for Americans who suffer from mental health
illness.
The Emergency Economic Stabilization Act is vastly improved over the
version we received initially from Secretary Paulson. We have worked
together, Democrats and Republicans, by adding significant oversight in
how public funds are spent, we have stopped golden parachutes for
executives at taxpayer expense, we have provided taxpayers with a
greater likelihood of a return on the funds spent and help for
homeowners facing foreclosure.
To this bedrock plan we added an increase in FDIC insurance for bank
account deposits from $100,000 to $250,000, which will give consumers
renewed confidence that the safety of their savings is ironclad. This
is especially important for community-owned banks, for small banks, and
rural America.
[[Page 23506]]
We include tax extenders to lower taxes for middle-class families,
businesses, and for private sector entrepreneurs and producing clean,
renewable, alternative energy sources. These tax cuts will create
hundreds of thousands of jobs here in America, spark investment in the
economy by small businesses and large businesses, and help chart our
course away from imported oil toward the homegrown fuels of tomorrow.
There are a few people in the House who would rather we did this some
other way, and we have tried other ways. I say to my friends in the
House of Representatives, we have to get this done. We cannot leave
Washington without doing the financial rescue package and this tax
extenders bill. People are waiting. People have been laid off.
Senator Durbin and I had a man come to us--an immigrant from the
Ukraine--who has been extremely successful in America. He is an
American citizen, of course. He came to us and said: If you don't pass
the tax extenders, I am going to lose my business; people will be laid
off. Hundreds of people will be laid off. He had loans for developing
these businesses, and if the tax extenders did not come forward, they
wouldn't loan him the money. They would call back the loans, is what he
told us.
So legislation is never perfect, but we have done our best, and these
tax extenders are so important for the American people. It would not be
good for us to leave here--it would be a blight on this Congress--and
not pass these tax extenders. These aren't for the wealthy, they are
for people who are working for a living and trying to keep a job. And
jobs will be created. I repeat, tens of thousands of jobs will be
created.
I believe every part of this bill enjoys bipartisan support. Every
part is aimed directly at the heart of our financial crisis. No one is
happy about paying for this dramatic and expensive step with the
bailout. No one is glad we have reached this critical point. Senator
Obama said yesterday that there will be plenty of time to assign blame.
Now is our time to work--not as Democrats, not as Republicans, but as
guardians of the public trust--to forge a better way ahead.
So I am hopeful that tonight we will see a strong vote in support of
this plan and that the bipartisanship shown here in the Senate today
will spark the House of Representatives to do the same.
Mr. President, the Founding Fathers were very visionary in setting up
this unique system we have here--the legislative system. We have three
separate but equal branches of Government. But the legislative branch
was set up by our Founding Fathers so that there would be internal
strife. That is the way they set it up. Members of the House of
Representatives are elected for 2-year terms, we have 6-year terms, and
a lot of the time there is envy and jealousy as to how we do what in
each body. But in the end, we need to work together. We get a lot of
stuff from the House that we don't like in the way they have written
it, but that is who they are. They do not like what we send them, and
they probably think they could do a better job than we have--and maybe
they could have--but this is what we are going to send them.
I hope, as soon as the House can move, they will move quickly--maybe
tomorrow--so that by this weekend rolling around we will have done what
we need to do for the American people. I repeat, this isn't for Lower
Manhattan, this is for people in Elkhorn, NV, in Reno, NV, and in Las
Vegas, NV. This is so people can keep their jobs and be able to buy
cars and get a loan to take care of that car. It is so a car dealer
will be able to do as they have done for decades and borrow money to
buy cars so they have cars to sell. Right now, they can't do that. I
got a call yesterday from a car dealer in Las Vegas saying that he
can't buy any cars and that he needs to have inventory. He said if
somebody tries to buy a car, most people can't get a loan. And it is
going to get worse, not better, unless we do something.
____________________
RECOGNITION OF THE MINORITY LEADER
The ACTING PRESIDENT pro tempore. The Republican leader is
recognized.
____________________
ECONOMIC RESCUE
Mr. McCONNELL. Mr. President, after Monday's vote in the House, the
question is not how we got here but how we get out and how to get our
economy back on its feet. So after extensive consultation between the
majority leader and myself and the leaders in both parties here in the
Senate, we believe we have crafted a way to go forward and to get us
back on track. This is the only way to get the right kind of solution
for the American people. Both Senator Obama and Senator McCain are
coming back tonight to embrace this effort and to help us reassure the
American people that we are going to fix this problem.
No one is happy with the situation we are in, but it is a situation
that we have. And the American people didn't send us here just to do
easy things; they expect us to rise to big challenges and to put aside
differences and to work on their behalf. So tonight the Senate will
vote on an economic rescue plan designed to shield millions of
Americans from shockwaves of a problem they didn't create.
We have two problems. We have the equity markets and we have the
credit markets, and a way of thinking of it is like this: You could
think of our whole economy as the human body, but the credit markets
are the circulatory system. Right now, as the distinguished majority
leader pointed out, the credit markets are frozen, so the circulatory
system is not working as it should. If the circulatory system doesn't
work, it begins to choke off the body--the economy. With the step we
take tonight, we are confident we will be able to restore the
circulatory system, if you will, and regain health for the economy--the
body, if you will--and get the problem fixed for the American people.
I said yesterday that we are going to fix this problem this week. The
Senate will speak tonight. We will send to the House a package that, if
passed, will address the issue.
We will have demonstrated to the American people that we can deal
with the crisis in the most difficult of times--right before an
election, when the tendency to be the most partisan is the greatest.
But we are in the process of setting that aside, rising to the
challenge--both Democrats and Republicans--and doing what is right for
the American people.
I yield the floor.
____________________
RESERVATION OF LEADER TIME
The ACTING PRESIDENT pro tempore. Under the previous order the
leadership time is reserved.
____________________
CORRECTION TO APPOINTMENT
Mr. DODD. Mr. President, I ask unanimous consent that action on the
appointment of Rainier Spencer made yesterday be corrected to reflect
that is an appointment made on behalf of the majority leader and that
correction be printed in the Record.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
____________________
UNITED STATES-INDIA NUCLEAR COOPERATION APPROVAL AND NONPROLIFERATION
ENHANCEMENT ACT
The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will now proceed to the consideration of H.R. 7081, which the
clerk will report.
The assistant legislative clerk read as follows:
A bill (H.R. 7081) to approve the United States-India
Agreement for Cooperation on Peaceful Uses of Nuclear Energy,
and for other purposes.
The ACTING PRESIDENT pro tempore. The Senator from Connecticut is
recognized.
Mr. DODD. Mr. President, I am standing in today, my colleagues should
be aware, for Senator Biden,
[[Page 23507]]
who is the chairman of the Foreign Relations Committee. As most of the
world is aware, he is otherwise occupied.
As the ranking Democrat next to him, I have been asked to assume the
responsibility of bringing this matter before the Senate. Senator Biden
has spent a great deal of time on this issue, along with his friend and
colleague, the former chairman, Senator Lugar, as have other Members as
well.
Today we will talk about this issue, the importance of it, the action
taken by the House of Representatives under the leadership of Howard
Berman, the chairman of the Foreign Affairs Committee of that body.
I have a letter from the Secretary of State, as well as other
supporting information, that leads us to the conclusion that this bill
ought to be passed, and passed, I hope, overwhelmingly by this body
because of the message it would send not only to the people and the
Government of India but others as well about the direction we intend to
take in the 21st century about this matter.
I will share some opening comments, and I will turn to my colleague,
Senator Lugar, for any comments he has, and then Senator Dorgan and
Senator Bingaman--at least two people I know who have amendments they
wish to have offered. I know they have comments and thoughts they have
to share on this subject matter as well.
In addition to Senator Lugar and Senator Biden on the committee,
there are other Members as well who expressed a strong interest in the
subject matter--not necessarily an agreement with this proposal but
nonetheless should be recognized for their diligence in paying
attention to the issue. Senator Feingold of Wisconsin and Senator
Barbara Boxer of California have demonstrated a real interest and
concern about this issue.
I want to speak for a few minutes about Representative Henry Hyde. I
was elected with him in 1974 to the House of Representatives. He is no
longer with us, but nonetheless he made a remarkable contribution as a
Republican Member of the House of Representatives, not the least of
which was this one, on the Hyde amendment, which will be discussed, I
presume, at some length today as we talk about this bill, H.R. 7081,
the United States-India Nuclear Cooperation Approval and
Nonproliferation Enhancement Agreement.
I rise to urge passage of this bill, approving the United States-
India peaceful nuclear cooperation agreement. On this past Saturday,
the House of Representatives passed this bill by a margin of 298 to
116, a resounding vote in support for this agreement.
This agreement with India is as important as it is historic. This
bill enables the United States and India to chart a new course in
relations between our two great democracies.
There are compelling geopolitical reasons to move forward with this
relationship. India has become a major actor in the world.
Why don't we put up this map. One of the things I thought I would do
is put up a map. I know everyone knows exactly where these countries
are located, but I think sometimes it can be helpful to remind people
of the tremendous importance of India's location in Asia, sharing
borders with many countries--certainly China and Pakistan and in close
proximity with Afghanistan, a very fragile part of the world.
If you look at this map--I will leave it up for a good part of the
day--you will appreciate, aside from the agreement itself, the
strategic importance of this relation for the United States.
India has become a major actor in the world, and it increasingly sees
itself in concert with other global powers, rather than in opposition
to them.
Indian Prime Minister Singh, who visited Washington just last week,
has devoted energy and political courage in forging this agreement, and
in seeking approval for it in India. Put simply, he has placed himself
and his political party on the line.
In India, the political symbolism of the agreement is extremely
important. It addresses the most divisive and long-standing issue
between our two countries dating back to 1974. Most important, the
agreement addresses India as an equal--a point that looms large in
India, where there are strong memories of a colonial past and of
tensions with the United States during the Cold War.
Some of the debate in India focused on whether the agreement with the
United States would hamper India's nuclear weapons program. But much of
the give-and-take was really about a more basic question--whether it
was really time for India to work cooperatively with Western countries.
Reaching an accord on nuclear status has been wrenching for India,
despite the favorable terms that some say India obtained.
This agreement is indicative of a new era in Indian foreign policy--
an era in which India will see all the world's powers as potential
partners in efforts to address its own needs and the needs of others. I
believe that this new era will bring increased stability and progress
to South Asia. I see the bill before us as approving far more than just
a nuclear agreement. Among other things, it will set the stage for a
stronger U.S.-India relationship, which will be of critical importance
to our country in the 21st century.
The Committee on Foreign Relations held an in-depth hearing on the
U.S.-India agreement last month. The committee, along with the House
Committee on Foreign Affairs, worked closely with the administration to
address technical concerns expressed about the agreement. This
extraordinary consultation resulted in a bill that will improve U.S.
implementation of the accord and assure that nuclear non-proliferation
remains at the core of U.S. foreign policy. Our committee approved a
bill identical to the House-passed bill by a vote of 19-to-2. I commend
chairman Howard Berman in the House and Senator Lugar for his
leadership as well.
This agreement is not a partisan issue. President Clinton launched
the initiative, and President Bush pushed it to fruition. It had strong
support on both sides of the aisle in 2006, when we voted on the Henry
J. Hyde Act, establishing the underlying principles and requirements of
this accord. Indeed, 85 members of the Senate supported the Hyde Act,
and only 12 voted against it. I believe the resulting agreement has
strong support today.
I mentioned Henry Hyde arrived in Congress in 1975, along with some
74 of us elected in that fall of 1974. I had a wonderful relationship
with Henry Hyde. We served together in the House and then during our
respective tenure in that body, and then in this body. As I mentioned
earlier, Henry Hyde was a remarkable Member of Congress and
accomplished many things. He was controversial in some ways but a
person of deep conviction, deep personal convictions, and he brought
that conviction to everything he engaged in as a matter of public
policy.
We probably would not be in as strong a position today to talk about
this agreement had it not been for the Hyde Act. So I would be remiss
this morning in discussing this if we didn't pay tribute to Henry Hyde
and his contribution to this very issue. I want the record to reflect
my appreciation for the work this man did on behalf of all of us by
drafting and supporting and insisting upon the adopting of the Hyde
Act.
Mr. President, throughout our work on this agreement we have sought
to address concerns expressed in the United States as well as in India.
Some nuclear nonproliferation experts have voiced a fear that it would
lead India--and then India's neighbors--to increase the production of
nuclear weapons. Some experts have warned that giving India the right
of peaceful nuclear commerce, despite its refusal to sign the Nuclear
Non-Proliferation Treaty, could undermine the world's willingness to
abide by that vital treaty and to enforce compliance with it. We have
been consistently vigilant to such risks, and the Hyde Act and this
bill give us the tools to remain so in the future.
The process that led to the U.S.-India agreement was undertaken with
an eye to achieving progress on nonproliferation issues. Pursuant to a
declaration issued in July 2005 by President Bush
[[Page 23508]]
and Prime Minister Singh, it is important to note the following:
India has improved its export control law and regulations;
India has moved to adhere to the guidelines of the Nuclear Suppliers
Group and the Missile Technology Control Regime;
India has affirmed that it will not transfer equipment or technology
for uranium enrichment or spent fuel reprocessing to any country that
does not already have a full-scale, functioning capability;
India has reaffirmed, both to the United States and to the Nuclear
Suppliers Group, its unilateral moratorium on nuclear testing;
India has initialed, and intends to sign, a safeguards agreement with
the IAEA;
India has begun to negotiate an Additional Protocol to that
safeguards agreement; and
India will bring under IAEA safeguards over a dozen existing or
planned nuclear facilities that were not previously subject to
safeguards.
The bill before the Senate provides additional measures that guide
the implementation of the agreement, and they are worthy of note.
This agreement reaffirms that our approval of the agreement is based
on U.S. interpretations of its terms. In other words, it reaffirms that
President Bush's assurances about fuel supplies are a political
commitment--and are not legally binding.
It requires the President to certify that approving this agreement is
consistent with our obligation under the Nuclear Non-Proliferation
Treaty not to assist or encourage India to produce nuclear weapons.
Before the Nuclear Regulatory Commission can issue any licenses under
this agreement, India's safeguards agreement with the IAEA must first
enter into force. In addition, India must file a declaration of
civilian nuclear facilities under the safeguards agreement that is not
``materially inconsistent'' with the separation plan that India issued
in 2006. We know that there will be some changes, because the 2006 plan
envisioned safeguards beginning that year--rather than 2 years later.
But this guards against a declaration that flatly contradicts India's
promises.
The bill also requires prompt notification of the Foreign Relations
Committee if India should diverge from its separation plan in
implementing its safeguards agreement.
The bill establishes a procedure for congressional review--and
possible rejection--of any ``subsequent arrangement'' under the
agreement that would allow India to reprocess spent nuclear fuel that
was derived from U.S.-supplied reactor fuel or produced with U.S.-
supplied equipment. Article 6 of the India agreement anticipates such a
subsequent arrangement if India builds a new reprocessing facility
dedicated to its civilian nuclear power sector. Congress should have a
special role in this, because spent fuel reprocessing can produce
weapons-grade plutonium. This is an improvement over current law, which
allows such arrangements to take effect 15 days after public notice is
given in the Federal Register.
The bill requires the President to certify that it is U.S. policy to
work in the Nuclear Suppliers Group to achieve further restrictions on
transfers of enrichment and reprocessing equipment or technology.
The bill also directs the President to seek international agreement
on procedures to guard against the diversion of heavy water from
civilian to military programs. The India agreement has protections for
heavy water that the United States may supply, or that is produced with
U.S.-supplied equipment. We need to get supplier countries to adopt
similar standards. This was the subject of some lengthy conversation at
the committee hearing on this very matter, talking about the heavy
water issue and what can be produced by that. I left the hearing
confident that the administration intends to pursue these matters very
aggressively.
The bill requires regular reporting on the executive branch progress
in its efforts on enrichment and reprocessing limits and protecting
against heavy water diversion.
That is a lot to consume. I will be happy to make this available to
my colleagues to review--staff have worked on this very diligently over
the last number of years--to respond to any Member or staff member
about any of this. It is somewhat complicated when you get into the
issue of heavy water and physics. Nonetheless, there are matters I want
the Members to be confident about when they consider their vote on this
very important bill.
So, again, I wish to thank the administration, and I will ask
unanimous consent, if I may--this is a letter which we received from
the State Department, from Secretary of State Condoleezza Rice,
expressing the strong support of the administration for this agreement.
I ask unanimous consent that this letter be printed in the Record.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
(See exhibit 1.)
Mr. DODD. As I mentioned earlier, of course, I'd like to express my
gratitude to Senator Biden for his remarkable work on this effort,
along with Senator Lugar. Obviously, this team who has worked so
closely together on so many issues, but this one is of extreme
importance. Again, I urge my colleagues to be supportive of it. We have
a chance to get this done.
There are those who will argue for delaying and waiting later, but I
think the moment is here. Again, this is an important message to send.
As I mentioned earlier, I am not sure my colleagues are aware of this,
but Prime Minister Singh showed remarkable courage as the Prime
Minister of that country in forging this agreement. I think our
response to it is important--not that we ought to sign on to it for
that reason--but it is important, how important this relationship is.
Again, I draw the attention of my colleagues to this map behind me
and the central role, geographically, this great and mature democracy
holds in this part of the world, where in many cases there is something
far less than a strong and mature democracy. To have a good, strong
relationship with this great country in this century will be of
critical importance, I believe, to our safety as a nation and the
safety of mankind.
So this agreement transcends a bilateral relationship. It goes far
deeper than that, reaches far broader than the boundaries of two
countries separated by the great distance but allows us, for the first
time in some 35 years, to once again grow closer together as two greet
democracies.
The tension between our countries has been there for these past 35
years. Tonight we will have an opportunity to put that behind us and to
build a new relationship.
For that reason, this agreement also has great significance and
import.
The Secretary of State,
Washington, October 1, 2008.
Hon. Harry Reid,
U.S. Senate.
Dear Senator Reid: I am writing to express support for the
``United States-India Nuclear Cooperation Approval and
Nonproliferation Enhancement Act'' (H.R. 7081). I very much
appreciate your consideration of this important bill within
such an extraordinary timeframe. We would not be asking for
such exceptional action if we did not believe it was
necessary to complete an initiative on which both the
Administration and Congress have worked very hard, and on a
thoroughly bipartisan basis, since 2005.
The U.S.-India nuclear agreement marks the culmination of a
decade-long process. Two successive Administrations have
sought to improve U.S.-India relations and adapt American
policy to India's emergence on the international stage. For
the United States, passage of this legislation will clear the
way to deepen our strategic relationship with India, open
significant opportunities for American firms, help meet
India's surging energy requirements in an environmentally
friendly manner, and bring India into the global nuclear
nonproliferation mainstream.
I encourage you to pass H.R. 7081 without amendment. The
current bill advances the U.S.-India relationship while
enhancing nonproliferation efforts worldwide. Amendments
would unnecessarily jeopardize the careful progress we have
achieved with India at a time when I believe it is important
for us to seize the significant momentum we have created in
the U.S.-India relationship.
I understand that some Senators have questions about the
impact of an India nuclear test on this initiative. We
believe the
[[Page 23509]]
Indian government intends to uphold the continuation of the
nuclear testing moratorium it affirmed to the United States
in 2005 and reiterated to the broader international community
as recently as September 5, 2008. Let me reassure you that an
Indian test, as I have testified publicly, would result in
most serious consequences.
Existing in U.S. law would require an automatic cut-off of
cooperation, as well as a number of other sanctions, if India
were to test. After 60 continuous session days, the President
could waive the termination of cooperation if he determined
that the cut-off would be ``seriously prejudicial'' to
nonproliferation objectives or ``otherwise jeopardize the
common defense and security.'' We believe existing law
strikes the proper balance in responding to a nuclear test,
and it is consistent with the approach adopted by the Nuclear
Suppliers Group when it adopted the exception for India in
early September.
Please allow me also to reiterate what I told Congress on
April 5, 2006, when this same question arose: ``We've been
very clear with the Indians . . . should India test, as it
has agreed not to do, or should India in any way violate the
IAEA safeguard[s] agreements to which it would be adhering,
the deal, from our point of view, would at that point be
off.''
Encouraging India's sustained commitment to its moratorium
on nuclear testing will be important to the strategic
partnership the United States now seeks to build with India.
Congress and the Administration have carefully addressed
testing concerns in the Hyde Act, the U.S.-India 123
Agreement, and the testimony of Administration officials.
We have an unprecedented and historic opportunity before us
to help shape the 21st century for the better. With this
legislation in its current form, the Senate can help ensure
that the United States and India complete the journey we
began together three years ago. You can also help ensure that
U.S. industry--just like its international counterparts--is
able to engage with India in civil nuclear trade.
Sincerely,
Condoleezza Rice.
The ACTING PRESIDENT pro tempore. The Senator from Indiana.
Mr. LUGAR. Mr. President, I wish to congratulate Senator Dodd for his
leadership in the Foreign Relations Committee as we took up this
historic agreement. He and I both congratulate Prime Minister Singh,
our President, President Bush, and Secretary Rice for their advocacy.
This is, indeed, a historic day and a historic moment in the
relationship between the United States and India, a very important
partnership for world peace.
Today we consider the United States-India Peaceful Nuclear
Cooperation Agreement. This is one of the most important strategic
diplomatic initiatives undertaken in the last decade. By concluding
this pact, the United States has embraced a long-term outlook that will
give us new diplomatic options and improved global stability.
The legislation we are considering approves the 123 Agreement that
will allow the United States to engage in peaceful nuclear cooperation
with India, while protecting U.S. national security and
nonproliferation efforts, as well as congressional prerogatives.
It is an opportunity to build a strategic partnership with a nation,
India, that shares our democratic values and will exert increasing
influence on the world stage.
Last Saturday, September 27, the House of Representatives voted 297
to 117 to approve this agreement. Senate approval would be the capstone
to more than 3 years of efforts in the United States and India and
around the world.
By embracing this agreement, India's leaders are seeking to open a
new chapter in the United States-India relations and reverse decades of
fundamental disagreement over the nonproliferation regime. India has
created a new national export control system; promised to maintain its
unilateral nuclear testing moratorium; pledged to work with us to stop
the spread of enrichment and reprocessing technologies; proposed to
separate its civilian and military facilities and committed to place
its civilian facilities under IAEA safeguards.
If approved, an agreement will allow India to receive nuclear fuel
technology and reactors from the United States, benefits that were
previously denied to India because of its status outside the Nuclear
Non-Proliferation Treaty.
The benefits of this pact are designed to be a lasting incentive for
India to abstain from further nuclear weapons tests and to cooperate
closely with the United States in stopping proliferation.
The 123 Agreement was submitted by President Bush on September 10,
2008. Last week, the Foreign Relations Committee voted 19 to 2 to
report this bill, approving the agreement to the full Senate. The bill
the House voted on Saturday was almost identical to the bill approved
by the Senate Foreign Relations Committee.
Now, 2 years ago, the Senate voted 85 to 12 to approve legislation
that set the parameters for the 123 Agreement we are considering today.
The House voted 359 to 68 to approve companion legislation. At the
time, the Foreign Relations Committee undertook an extensive review of
the agreement and its context. We held three public hearings with
testimony from 17 witnesses, including our Secretary of State,
Condoleezza Rice.
We received a classified briefing from Under Secretaries of State
Nick Burns and Bob Joseph. Numerous briefings were held for staff with
experts from the Congressional Research Service, the State Department,
the intelligence community, and the National Security Council.
I submitted 174 written questions for the record to the Department of
State on details of the agreement, and I posted those answers on my Web
site. The 2006 legislation set the rules for today's consideration of
the 123 Agreement between the United States and India.
Unlike the administration's original proposal, the Hyde Act neither
restricted nor predetermined congressional action on the 123 Agreement.
We expect India to move quickly to negotiate a new safeguards
agreement with the IAEA and then to seek consensus from the Nuclear
Suppliers Group in accordance with the Hyde Act. Unfortunately,
domestic political divisions in India led to a delay of almost 2 years.
Final action on these two tasks was not completed until earlier this
month. India engaged and obtained the approval of a new safeguards
agreement with the IAEA on August 1. Nuclear Suppliers Group consensus
was received on September 6. Since that time, the administration and
both Houses of Congress have worked diligently to evaluate the
agreements, answer questions from Members of Congress, and move the
process forward.
The Hyde Act required the President to report to Congress on whether
India had met seven determinations which are as follows: India has
provided the United States and the IAEA with a separation plan for its
civilian and military facilities and filed a declaration regarding
civilian facilities with the IAEA; India has concluded all legal steps
prior to signature for its safeguards agreement in perpetuity with the
IAEA; India and the IAEA are making substantial progress in completing
an additional protocol; India is working actively with the United
States to conclude a fissile material cutoff treaty; India is working
with and supporting the United States to prevent the spread of
enrichment and reprocessing technology; and, India is taking the
necessary steps to secure nuclear materials and technology; and, the
Nuclear Suppliers Group has decided by consensus to permit supply to
India of nuclear items under an exception to their guidelines.
Now, 2 weeks ago at a Foreign Relations Committee hearing, Under
Secretary of State for Political Affairs Bill Burns, Acting Under
Secretary Joan Rood, and the lead U.S. Negotiator, Richard Stratford,
provided detailed analysis of the agreement. Members were able to
examine the documents accompanying the 123 Agreement and ask questions
of witnesses about the Hyde Act, the 123 Agreement's text, the new
safeguards agreement, and the Nuclear Suppliers Group decision.
I am convinced the President has met all the required determinations
under the Hyde Act. However, the congressional review of the agreement
demonstrated that two issues required provisions in the legislation
before us.
First, India has not identified in the text of its IAEA safeguards
agreement those facilities it will place under safeguards. India has
provided a plan for the separation of facilities from its nuclear
weapons program to the IAEA,
[[Page 23510]]
but the plan is nonbinding and appears outdated.
This is not what Congress understood would happen when we approved
the Hyde Act. Indeed, in 2006, the administration requested bill
language calling on India to file ``a declaration regarding its civil
facilities with the IAEA.''
The safeguards agreement containing that declaration was to enter
into force before submission of the 123 Agreement to Congress.
Under the Hyde Act, India and the IAEA must conclude:
All legal steps required prior to signature by the parties
of an agreement requiring the application of IAEA safeguards
in perpetuity in accordance with IAEA standards, principles,
and practices . . . to India's civil nuclear facilities,
materials, and programs. . . . including materials used in or
produced through the use of India's civil nuclear facilities.
The purpose of this complex provision was to secure the most complete
version possible of the safeguards agreement for congressional review.
We intended that it be submitted as part of the Presidential
determination and waiver report required by the Hyde Act.
Unfortunately, by not naming the facilities in the safeguards
agreement, there is an open question as to when India will act. This
has legal implications because the United States is prohibited by law
and our NPT obligations from having nuclear trade with any facility not
named in India's safeguards agreement.
In response to this issue, Section 104 of the bill before us requires
that licenses may not be issued by the Nuclear Regulatory Commission
for transfer of nuclear fuel, equipment and technology until after the
President determines and certifies to Congress that, one, the
safeguards agreement approved by the IAEA Board of Governors on August
1, 2008, has entered into force; and, two, India has filed a
declaration of facilities that is not materially inconsistent with the
facilities and schedules described in its separation plan.
The second issue that required a new provision in this legislation is
India's desire to reprocess spent nuclear fuel burned in its reactors,
including fuel from the United States. Reprocessing can result in the
separation of plutonium, which can be used in a nuclear weapon.
The United States permits some NPT members with long histories of
strong compliance with the IAEA agreement to reprocess U.S.-origin
spent nuclear fuel through a process called programmatic consent.
During negotiations on the 123 Agreement, India requested
programmatic consent and the United States agreed. However, the United
States made programmatic consent contingent on India establishing a
dedicated facility to carry out the reprocessing and an agreement on
reprocessing procedures in this new facility.
During the formulations hearings, I asked Acting Under Secretary John
Rood if the arrangement that would be negotiated with India to permit
reprocessing would be submitted to Congress for review.
Mr. Rood stated: `` . . . yes, that's required under the Atomic
Energy Act.''
Permitting spent nuclear fuel from the United States to be
reprocessed in India is a complex matter that requires careful
implementation. The bill before us today does not block negotiations on
such arrangements with India. However, the bill does require a future
administration to submit such a ``subsequent arrangement'' to Congress
which would have the power to pass a resolution of disapproval.
By addressing these two important matters, I believe this legislation
improves congressional oversight for future nuclear cooperation with
India and corrects a problem related to the new safeguards agreement
India has with the IAEA.
In conclusion, I strongly urge my colleagues to approve the United
States-India agreement. The national security and economic future of
the United States will be enhanced by a strong and enduring bipartisan
with India.
With a well-educated middle class that is larger than the entire U.S.
population, India can be an anchor of stability in Asia and an engine
of global economic growth.
Moreover, the United States has a strong interest in expanding energy
cooperation with India to develop new technologies, cut greenhouse gas
emissions, and prepare for declining global fossil fuel reserves.
The United States' own energy problems will be exacerbated if we do
not forge energy partnerships with India, China, and other nations
experiencing rapid economic growth. This legislation will promote much
closer United States-Indian relations while preserving the priority of
our nonproliferation efforts. We should surely move forward now.
I thank the Chair and yield the floor.
The PRESIDING OFFICER (Mr. Nelson of Nebraska). The Senator from
Connecticut.
Mr. DODD. Mr. President, I yield time to the Senator from North
Dakota.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. DORGAN. Mr. President, the tragedy of 9/11 is indelibly imprinted
on the minds of all of us. What is not so well understood or remembered
was that one month later, October 2001, something else happened. Graham
Allison, someone who has worked on nonproliferation in the Clinton
administration, has written a book about it. Time magazine wrote about
it in March of 2002.
Here is what they said: A month after 9/11, for a few harrowing
weeks, a group of U.S. officials believed the worst nightmare of their
lives--something even more horrific than 9/11--was about to come true.
In October of 2001, an intelligence report went out to a small number
of government agencies, including the Energy Department's top secret
nuclear emergency search team based in Nevada.
This is a Time report, but I have it also in a book written by Graham
Allison.
The report said that terrorists were thought to have obtained a 10-
kiloton nuclear weapon from the Russian arsenal and that they planned
to smuggle it into New York City. The source of the report was a CIA
agent named Dragonfire. Dragonfire's report actually was something that
was claimed to be undetermined in terms of reliability. But it was
something the CIA agent named Dragonfire had picked up. Dragonfire's
claim tracked with a report from a Russian general who believed his
forces were missing a 10-kiloton device. Since the mid-1990s,
proliferation experts have wondered whether several portable nuclear
devices might be missing from the Russian stockpile. That made the
Dragonfire report all that more alarming. Detonation of a 10-kiloton
nuclear weapon in downtown New York would kill about 100,000 civilians,
irradiate 700,000 more, and flatten everything for a half a mile.
So the counterterrorist investigators went on the highest alert, we
are told. The search team went to New York City. It was kept secret so
as not to panic the people of New York. Mayor Giuliani was not
informed. If terrorists had managed to smuggle a nuclear weapon into
New York City, the question was, could they detonate it. About a month
later, after this report from a CIA agent named Dragonfire of a nuclear
weapon having been stolen by terrorists, smuggled into New York City,
about to be detonated, about to kill massive numbers of people, it was
determined that perhaps this was not a credible intelligence report.
But in the postmortem evaluation, they determined it is plausible to
have believed a Russian nuclear weapon could have been stolen. It is
plausible to believe, having stolen it, terrorists could have smuggled
it into New York City, and plausible to believe they could have
detonated it; one low-yield nuclear weapon. There are 25,000 of them on
this planet. Think of the apoplectic seizure that occurred in October
of 2001 over a report by a CIA agent that he picked up some information
about one low-yield nuclear weapon being smuggled into New York City.
There are 25,000 nuclear weapons on this Earth.
Our job is to provide the leadership to begin to reduce the number of
nuclear weapons. The bill before us will almost certainly expand the
production of nuclear weapons by India.
[[Page 23511]]
Here is what it says to India: Even as we take apart the basic
architecture of nonproliferation efforts, the nuclear nonproliferation
treaty, which India is one of three countries that has never signed,
even as we take that nonproliferation architecture apart with this
bill, we have said to India, with this agreement, you can misuse
American nuclear technology and secretly develop nuclear weapons. That
is what they did. You can test those weapons. That is what they did.
You can build a nuclear arsenal in defiance of United Nations
resolutions and international sanctions. After testing, 10 years later,
all will be forgiven, and you will be welcome into the club of nuclear
powers without ever having signed the nonproliferation treaty.
Let's understand what this does. First, let me say that never has
something of such moment and such significance and so much importance
been debated in such a short period and given such short shrift: one
very brief committee hearing in the Senate and a total of a couple of
hours here on the Senate floor today; pretty disappointing.
What this agreement says is, India needs various kinds of equipment
and technology to produce and build nuclear powerplants. They need more
power, and they want to get it from nuclear powerplants. They have been
prevented from accessing the kind of material and equipment to produce
those plants because they have not signed the nonproliferation treaty,
and they developed nuclear weapons outside of the purview of all of us,
misusing American nuclear technology to secretly develop these weapons.
Now we have said in an agreement with them, yes, we will allow big
companies now to sell you this technology--this is all about big
companies being able to access a new marketplace for technology, to
sell the technology and the capability to develop nuclear powerplants--
we will allow you to do that, and we will have the opportunity in this
agreement for you to put eight of your plants behind a curtain that
will have no international inspections, which is a green light to say,
you may produce additional nuclear weapons.
That is not just a supposition. Almost everybody understands that is
going to happen. This agreement does not prohibit them from nuclear
tests in a way that would nullify the agreement, if they do test. The
Administration's interpretation of this agreement is very ambiguous
about that.
I want to go through a couple of points. India would have unlimited
ability to import fuel for 14 civilian powerplants under this
agreement. That is what they want. They want to produce additional
power with nuclear plants. Then it says India could have eight other
power reactors behind a curtain that we will not be able to inspect.
India can then divert its entire domestic fuel supply to eight military
reactors to produce additional nuclear weapons.
What does that mean? It is our agreeing that India, that has never
signed the nonproliferation treaty and has tested nuclear weapons and
developed nuclear weapons in secret using our technology, is now given
an agreement that allows them to build more nuclear weapons. Their
neighbor is Pakistan, also possessing nuclear weapons. Pakistan warned
the international community yesterday that a deal allowing India to
import United States atomic fuel and technology could accelerate the
nuclear arms race between India and Pakistan. India and Pakistan have
fought three wars since independence from Britain in 1947 and, through
a peace process, have stabilized relations since 2004, but they remain
deeply distrustful of each other. We have now reached an agreement that
says one of them may begin to produce additional nuclear weapons.
UPI--Islamabad, Pakistan: Without naming sources, the Press Trust
reported Wednesday that the Pakistani Prime Minister has reported
construction of two nuclear powerplants with Chinese assistance. The
move appears aimed at counterbalancing a nuclear fuel deal negotiated
with India. The decision was made on September 19 in Islamabad. The
point is, we will allow you to put eight reactors behind a curtain. We
will allow you to produce additional nuclear weapons that we won't know
about. Is there a reaction to that? Pakistan has a reaction, to engage
with the Chinese.
The United States had agreed that the purpose of the agreement was
not to contain India's strategic program but to enable resumption of
full civil nuclear energy cooperation. So that is the India separation
plan. That is what they say. They say the United States and India
agreed the purpose of the agreement is not to constrain India's
strategic program. That means they say the agreement is to not
constrain India's ability to produce nuclear weapons. That is what that
means.
I am going to offer an amendment today that the managers will oppose.
The conferees believe there should be no ambiguity regarding the legal
and policy consequences of any future Indian test of a nuclear
explosive device. That is from a joint statement of the conference of
the Hyde Act which passed the Congress. There should be no ambiguity.
Here is what the Administration says it thinks the agreement provides:
Should India detonate a nuclear explosive device, the United States has
the right to cease all nuclear cooperation. Well, we know we have the
right. Are we going to do it? No. That is deliberate ambiguity to say
if India were to test a nuclear weapon, there is nothing that will
require us to decide to nullify this agreement.
Let me say again, the India Prime Minister says the agreement does
not in any way affect India's right to undertake future nuclear tests,
if necessary.
This is a planet with 25,000 nuclear weapons, tactical and strategic.
The suspected loss or stealing of one caused an apoplectic seizure in
October of 2001. We have 25,000 of them. Our job as an international
leader, a world leader, our job is to begin marching back from the
abyss; that is, to reduce the number of nuclear weapons. Instead we are
taking apart the basic architecture of nuclear nonproliferation that
has served us for many decades. We are saying to India, who has never
signed the nuclear nonproliferation treaty, it is OK if you produce
additional nuclear weapons we can't see and we don't know about. We are
going to sign an agreement that allows you to do that. That is almost
unbelievable.
India is a very important trading partner. India is a very important
ally for our country. I believe that. I accept that. But this
administration and those in the Congress who have agreed to the measure
before us today are making a grievous mistake. We will not have second
chances with respect to this issue of nuclear weapons. If we don't
provide the world leadership to begin marching back from the prospect
of terrorists using nuclear weapons, the prospect of nuclear weapons
being stolen and developed by terrorist organizations, we will one day
wake up and tragically read that a nuclear weapon was exploded in a
major city on this planet. This agreement marches in exactly the wrong
direction. Do you think this agreement allowing India to produce
additional nuclear weapons has no impact on Pakistan, has no impact on
China, has no message to the rest of the world? The message is: You can
misuse American nuclear technology and secretly develop nuclear
weapons. You can test those weapons. You can build a nuclear arsenal in
defiance of United Nations resolutions, and you will be welcomed as
someone exhibiting good behavior with an agreement with the United
States. What kind of message is that? What message does that send to
others who want to join the nuclear club who say: You have nuclear
weapons, we want some.
If we don't find a way to begin systematically reducing the number of
nuclear weapons and stop the spread of nuclear weapons and try to find
every way to prevent a nuclear weapon from ever again being exploded in
anger on this planet, one day we will ruefully regret what we have done
here.
Again, let me close by saying that never in my life has such a large
issue been given such short shrift. This issue has great consequences
for this country, the world, and their respective futures for that
matter, and this administration is, in my judgment, making a very
serious mistake.
[[Page 23512]]
Mr. President, how much time remains?
The PRESIDING OFFICER. All time has expired.
Mr. DORGAN. Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Mr. President, I inquire of my colleague from North Dakota,
is it the intent of the Senator to offer an amendment at this time or
is it later this morning, or what is my colleague and friend's plan?
Mr. DORGAN. Mr. President, I say to the Senator from Connecticut, I
am waiting for the Senator from New Mexico to come to the floor. What
we are going to do is we are going to combine our two amendments.
Mr. DODD. OK.
Mr. DORGAN. We will still wish to take the 30 minutes each, but we
will combine the two amendments and have a vote on one amendment,
provided, of course, that meets unanimous consent. But I will, in a few
moments, be ready to consume my half hour on this subject if that is
your desire. I want to wait for Senator Bingaman to come in order to
consult. He should be here momentarily.
Mr. DODD. Mr. President, in his absence, why don't we wait. My plan
would be to have you do that and make your statements, and I will
respond to them at the appropriate time.
So I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. DORGAN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DORGAN. Mr. President, Senator Bingaman and I will be combining
our amendments into a Dorgan-Bingaman amendment, with other cosponsors,
and that is now being put together by legislative counsel. So we will
have that here briefly. But why don't I proceed with my 30 minutes. I
think Senator Bingaman will have 30 minutes. Then apparently there is
going to be a response following that, and we will conclude a portion
of this debate.
So, Mr. President, on the 30 minutes I now have available, let me
read to my colleagues something written by Graham Allison. Graham
Allison is someone who has been involved in nuclear nonproliferation
with the Clinton administration. He wrote this in a book, and this, by
the way, is published in an article. I want to read it. I will quote
it:
One month after the terrorist assault on the World Trade
Center and the Pentagon, on October 11, 2001, President
George W. Bush faced a more terrifying prospect. At that
morning's presidential daily intelligence briefing, George
Tenet, the director of central intelligence, informed the
president that a CIA agent codenamed ``Dragonfire'' had
reported that Al Qaeda terrorists possessed a 10-kiloton
nuclear bomb, evidently stolen from the Russian arsenal.
According to Dragonfire, this nuclear weapon was in New York
City.
Continuing to quote:
The government dispatched a top-secret nuclear emergency
support team to the city. Under a cloak of secrecy that
excluded even Mayor Rudolph Giuliani, these nuclear ninjas
searched for the bomb. On a normal workday, half a million
people crowd the area within a half-mile radius of Times
Square. A noon detonation in Midtown Manhattan would kill
them all instantly. Hundreds of thousands of others would die
from collapsing buildings, fire and fallout in the hours
thereafter.
Continuing to quote:
In the hours that followed, Condoleezza Rice, then national
security adviser, analyzed what strategists call the
``problem from hell.'' Unlike the Cold War, when the US and
the Soviet Union knew that an attack against the other would
elicit a retaliatory strike of greater measure, Al Qaeda--
with no return address--had no such fear of reprisal. Even if
the president were prepared to negotiate, Al Qaeda has no
phone number to call.
Again, continuing to quote:
Concerned that Al Qaeda could have smuggled a nuclear
weapon into Washington as well, the president ordered Vice
President Dick Cheney to leave the capital for an
``undisclosed location,'' where he would remain for weeks to
follow--standard procedure to ensure ``continuity of
government''. . . .
Six months earlier the CIA's Counterterrorism Center had
picked up chatter in Al Qaeda channels about an ``American
Hiroshima.'' The CIA knew that Osama bin Laden's fascination
with nuclear weapons went back at least to 1992, when he
attempted to buy highly enriched uranium from South Africa. .
. .
As CIA analysts examined Dragonfire's report and compared
it with other bits of information, they noted that the
September attack on the World Trade Center had set the bar
higher for future terrorist attacks. . . .
As it turned out, Dragonfire's report proved to be a false
alarm. But the central takeaway from the case is this: The US
government had no grounds in science or logic to dismiss this
possibility, nor could it do so today.
Now, think of that. That is a discussion about one low-yield 10
kiloton nuclear weapon allegedly stolen from the Russian stockpile,
smuggled into New York to be detonated by terrorists--one nuclear
weapon. There are 25,000 on this Earth. One small weapon caused an
apoplectic seizure about the prospect of hundreds of thousands of
people being killed.
What does that have to do with this? Well, what it has to do with
this is we have struggled since the end of the Second World War to try
to put a cap on the bottle here and make sure a nuclear weapon is never
again exploded in anger--not by a military power, not by a terrorist
group. We have tried to prevent the spread of nuclear weapons. We have
tried to see if we could find a way to reduce the number of nuclear
weapons. We have created something called the Nuclear Non-Proliferation
Treaty, the NPT. We have created something called the Nuclear Test Ban
Treaty, which I regret to say our country has not ratified. But we have
tried to find ways to stop the spread of nuclear weapons, stop the
building of additional nuclear weapons.
One of three countries that did not sign the Nuclear Test Ban Treaty
was India. They refused to sign it. In these intervening years, what we
have discovered about India--a respected ally of ours, a trading
partner of ours, a country we hold in high esteem--we have discovered
that they misused American nuclear technology to secretly develop their
own nuclear weapons. We have discovered that they tested those nuclear
weapons. They have defied the United Nations resolutions and
international sanctions.
Now we have discovered that an agreement has been reached with the
Government of India that all will be forgiven. We will sign a new
agreement with you--that I believe unwinds and undoes the entire
architecture of nonproliferation of nuclear weapons. All will be
forgiven. In fact, what we will do is we will say to you that you can
create nuclear powerplants because you need nuclear power, and our
corporations and international corporations can sell--this is about
business, a lot of business--can sell to you the technology and the
construction materials to produce nuclear powerplants. And, oh, by the
way, the agreement also says you can have eight nuclear powerplants
that are behind a curtain that will never be inspected by international
inspectors. That is where you can produce additional nuclear weapons,
which the Indian Government wishes to do.
This agreement is an unbelievable mistake. At exactly the moment when
this country should exhibit its leadership, its world leadership that
is required of this country to not only stop the spread of nuclear
weapons but to begin marching back to reduce the number of nuclear
weapons, at this exact time, this Government, this administration and
this Congress, is saying to an ally: We will give you the green light
to produce more nuclear weapons even though you have never signed the
nonproliferation treaty. That is almost unbelievable to me.
The nonproliferation treaty prohibits peaceful nuclear assistance to
so-called nonnuclear states unless they agree to put all their
facilities under international safeguards and give up the option of
producing nuclear weapons. With this agreement, we say that does not
matter anymore. It does not matter. You do not have to subject these
eight plants to international safeguards. You do not have to give up
the option of producing nuclear weapons.
The five traditional nuclear powers in the post-Second World War
period--
[[Page 23513]]
Russia, the United States, Britain, France, and China--all have signed
the nonproliferation treaty. All other countries are considered to be
nonnuclear states according to the nonproliferation treaty.
Article I of the NPT obligates the recognized nuclear weapon states,
including the United States, ``not in any way to assist, encourage, or
induce any non-nuclear weapons State to manufacture or otherwise
acquire nuclear weapons. . . .'' With this agreement, we have decided
that does not matter. We have no intention to pay attention to Article
I any longer.
Section 128 of the Atomic Energy Act requires all states other than
the five I mentioned to have full-scope safeguards as a prerequisite
for receiving U.S. civil nuclear exports. That does not matter anymore.
Section 129 of the Atomic Energy Act requires the termination of
nuclear exports if a nonnuclear weapon state has, among other things,
tested nuclear weapons after 1978. We have said that does not matter
anymore.
Section 102 of the Arms Export Control Act requires sanctions on any
nonnuclear weapon state that has detonated a nuclear device. That
doesn't matter anymore. The United Nations Security Council resolution
1172 condemned India and Pakistan's 1998 nuclear tests. The United
States-India agreement says that none of these provisions will be
applicable to India anymore, even though it secretly used our
technology to develop nuclear weapons and then tested them.
Now, a working nuclear bomb can be produced with as little as 35
pounds of uranium 235 or 9 pounds of plutonium 239. I think nuclear
terrorism and the threat of nuclear terrorists gaining access to
nuclear weapons represent the gravest security threats to our Nation,
bar none.
Retired GEN Gene Habiger, who commanded America's nuclear forces, has
said that nuclear terrorism ``is not a matter of if; it is a matter of
when.''
In 2006, Henry Kissinger wrote in the Washington Post:
The world is faced with the nightmarish prospect that
nuclear weapons will become a standard part of national
armament and wind up in terrorist hands.
It will become a standard part of armament for countries, because
they want to possess it, and it will inevitably end up in terrorist
hands.
Former Senator Sam Nunn wrote in the Wall Street Journal:
We know that terrorists are seeking nuclear materials--
enriched uranium or plutonium--to build a nuclear weapon. We
know that if they get that material they can build a nuclear
weapon. We believe that if they build such a weapon, they
will use it. We know terrorists are not likely to be
deterred, and that the more this nuclear material is
available, the higher the risks.
We know Osama bin Laden has been seeking the opportunity and the
materials to build nuclear weapons since the early 1990s. In 1998,
Osama bin Laden issued a statement titled ``The Nuclear Bomb of
Islam,'' declaring:
It is the duty of Muslims to prepare as much force as
possible to terrorize the enemies of God.
I described the book entitled ``Nuclear Terrorism'' written by Graham
Allison, an official in the Clinton administration who worked on these
issues: The potential stealing of one low-yield weapon terrorizing the
country and a city.
Nowhere is the threat of nuclear terrorism more imminent than in
South Asia. It is home to al-Qaida, which is seeking nuclear weapons.
It is an area where Pakistan and China and India have always had tense
relations. All three possess nuclear weapons. India and China fought a
border war in 1962. India and Pakistan have fought three major wars and
had two smaller scale contests. Both detonated nuclear explosions in
1998 and declared themselves a nuclear power. After that, the world
held its breath while India and Pakistan fought a limited war in
Kashmir. India is thought to have a modest cache of nuclear weapons at
this point. You can go to the journals and get estimates of 25 to 50 or
60 nuclear weapons, but India wants more.
It seems to me that to do this in the absence of an understanding of
what it means in the region, and in the absence of what it means to
unravel the regime by which we have tried to move toward
nonproliferation of nuclear weapons is a dangerous step.
I wish to describe something The New York Times wrote yesterday, and
I fully agree: President Bush and his aides were so eager for a foreign
policy success they didn't even try to get India to limit its weapons
program in the future. They got no promise from India to stop producing
bomb-making material, no promise not to expand its arsenal, and no
promise not to resume nuclear testing. The Senate should postpone
action until the next Congress can figure out how to limit the damage
from this deal.
I fully agree with that. I don't have any understanding why we are
rushing--with one short hearing before one committee in this Congress--
to a short, truncated version on the floor of the Senate, and then
agreement.
Here is the agreement: India would have unlimited ability to import
fuel for 14 civilian nuclear powerplants, and it could then divert all
of its current domestic fuel supply to 8 military reactors which are
used for nuclear weapons production, with no international inspection
at all.
If anyone thinks this makes sense for our country, I think there is
something wrong with that thinking.
Will it have a consequence with respect to Pakistan? I expect so.
Pakistan warned the international community in July that a deal
allowing India to import United States atomic fuel and technology could
accelerate a nuclear arms race between Delhi and Islamabad. They have
fought substantial wars before, as I said.
So what does Pakistan do? They go off and they will seek nuclear fuel
assistance from China to build 10 nuclear powerplants. Will they be
inspected? The move appears aimed at counterbalancing a nuclear fuel
deal negotiated this year between India and Western suppliers.
Paragraph 5 of the India separation plan says: The United States and
India--this is India's portion of the agreement--had agreed that the
purpose of the agreement was not to constrain India's strategic
program.
That is a fancy way of saying their understanding is we are not
constraining their ability to produce additional nuclear weapons.
Now, the Hyde Act passed the Congress and allowed this negotiation to
take place. I didn't vote for it. I was one of a minority who didn't
vote for it because it had some huge holes in it, but here is what the
conferees said:
The conferees believe there should be no ambiguity
regarding the legal and policy consequences of any future
testing of a nuclear explosive device by India.
That is what they said. Here is how the Administration interprets the
agreement that is on the floor of the Senate:
Should India detonate a nuclear explosive device, the
United States has the right to cease all nuclear cooperation
with India.
We already have that right. But is that ambiguous? It surely is. The
Administration doesn't say we are going to shut down or nullify this
agreement; it says we have the right to.
The proposition of the Hyde amendment that passed the Congress said
it should be unambiguous. No ambiguity. Yet the Administration is
deliberately being ambiguous so that if India tests a nuclear weapon,
that country may still not be subject to sanctions.
The BJP, which may be India's next ruling party, says:
The BJP would like to clearly reiterate that any compromise
on India's right to nuclear test is wholly unacceptable.
Finally, the agreement does not in any way affect India's
right to undertake future nuclear tests, if necessary.
This last statement was from the Prime Minister of India. Do we need
to say more about what might or might not be here?
Senator Bingaman and I are offering an amendment, the Dorgan-Bingaman
amendment, with a good number of cosponsors, that makes clear two
things. No. 1: If India would test, it would nullify this agreement
with respect to United States cooperation. No. 2: Senator Bingaman has
added--and we are putting them together--if India were to test a
nuclear weapon, the export controls we can enact to deal with other
[[Page 23514]]
suppliers around the world and their dealings with India should be
fully utilized.
Let me go back to where I started for a bit. Probably all of my
colleagues have been in the same discussions. I hear people say nuclear
weapons are like any other weapon. I hear people say nuclear weapons
are usable. I hear people say we need to build new nuclear weapons here
in our country. We need to build bunker-buster weapons, nuclear weapons
that can go under and bust some caves; Earth-penetrating bunker-buster
weapons. Designer nuclear weapons. We have all heard it. This
administration has wanted to build new designer nuclear weapons.
Some believe a nuclear weapon is like any other weapon. It is not. It
can never be used. To the extent and when it is used, if it is used by
a terrorist group or country, nothing on this Earth will be the same.
It was different in the 1940s. The last time a nuclear weapon was
used in anger, outside of tests, was to end the Second World War. Then
virtually no one else had nuclear weapons. Now we have nuclear weapons
spread around this globe. This country has assumed the responsibility
for many years--the mental responsibility to try to stop the spread of
nuclear weapons. It is a desperate attempt to say: You know what. The
only way this planet is going to continue is if we stop the spread of
nuclear weapons. Does anybody think if people start lobbing nuclear
weapons back and forth, killing millions of people, that this planet
survives? I don't. We have 25,000 of them on this planet, and we are
going to sign up to an agreement today that says let's produce more?
Not us, although we have people here who want to produce more in this
country. This says let India produce more in secret. What does that
mean to Pakistan? What does that mean to China? What does that mean to
that South Asian region? What does it mean to the world?
This is such a truncated debate and such a shame. There are a lot of
very interesting, qualified, serious people who ought to be weighing in
on this to describe what we are doing here today in terms of the
consequences to this planet. What are the consequences to the regime
that has existed for many years--five or six decades now--to try to
stop the spread of nuclear weapons?
I had a hearing one day in my appropriations subcommittee, because we
fund the nuclear weapons portion of the appropriations process in the
Department of Energy. In that hearing, someone described the fact that
the last time a nuclear weapon was used in a conflict was in 1945, and
it has been all of these decades--all of these decades--that we have
constrained the use of nuclear weapons. The Soviets and the U.S. built
massive stockpiles of nuclear weapons under a doctrine called Mutually
Assured Destruction, believing that if either attacked the other, the
retaliation would essentially destroy both. The original attack would
inflict massive damage on the country that was attacked, but the
country that was attacked would also retaliate in a manner that
virtually obliterated the attacking country. So that mutually assured
destruction represented a standoff during the Cold War with the Soviet
Union.
In the meantime, other countries aspired to become nuclear weapons
powers, to obtain nuclear weapons, and to this day not only do many
countries still desire these things, but now terrorists do as well. So
the question is, Who is going to step us back from this cliff? We have
a former Secretary of Defense who believes there is about a 50-percent
chance that a nuclear weapon--I believe he said a 50-percent chance--
will be exploded in a major city within 10 years. I don't doubt that
could be the prospect if we don't use all of our energy and all of our
leadership capability as a leading nuclear power in this world--a
nuclear weapons power in this world--to try to march back from 25,000
nuclear weapons to far fewer nuclear weapons; to try to put up walls by
which we will not allow people or countries to proliferate nuclear
weapons.
We have a man in Pakistan who is under house arrest, and has been for
a long while, Mr. A. Q. Khan, who apparently is a national hero of
sorts in Pakistan. He spread nuclear secrets all around the world for
money. Our country has never even been able to interview him, to talk
to him, to understand where these secrets went. As I said, he is not in
prison, he is under house arrest. He is still considered a hero by
some.
We have to get serious about this issue of the proliferation of
nuclear weapons. We are not getting serious about an issue such as this
by dismantling the very structure that has helped us now for some 60
years to prevent the spread of nuclear weapons or at least prevent the
use of nuclear weapons.
In the Appropriations Committee hearing I described earlier, I said:
We have been lucky, and someone said: Well, it is much more than luck.
I said: I agree it is more than luck. It is a regime, it is a structure
of nonproliferation that we have worked on. Many administrations worked
seriously in this area.
This administration, regrettably, appointed people to positions of
authority on nuclear nonproliferation who didn't believe in the
mission. They didn't even believe in the mission. The question for us
now is: Is this the way forward, to take apart the structure?
When I said we have been lucky, what I meant was that the structure
has certainly helped, but we are going to need more than that. We are
going to need some good fortune. If we think we can live on a planet
with 25,000 nuclear weapons, that somehow, some way, some day, somebody
is not going to steal one and detonate it in a major city--we have to
be serious about this.
India is a wonderful country. India is an ally of ours. It is an ally
of the United States. But that should not justify our deciding to give
a green light to India--a country which has never signed the
nonproliferation treaty--give the green light to produce more nuclear
weapons. That is exactly what this agreement does. No one can stand up
in this discussion and say: This agreement doesn't allow a country that
has refused to sign the nonproliferation treaty, this agreement does
not allow them to produce more nuclear weapons. It does on its face,
and everybody knows it. Everybody wants to pretend as though it doesn't
exist.
This is a horrible mistake. I am enormously surprised, after so many
decades of people talking and thinking seriously about nuclear
nonproliferation, that we reward those countries that misuse nuclear
technology in order to secretly produce nuclear weapons and secretly
test nuclear weapons. We now say to them: By the way, here is your
reward, an agreement by which you can continue to do it; an agreement
which is written in a way that says we will allow you to produce more
nuclear weapons and, oh, by the way, if you test, we won't even put in
the agreement that we will nullify it. An agreement we might nullify.
We ought to put in the agreement, ``We will,'' which was promised in
the conference report.
So maybe I am not capable of understanding the world view of some
that allowing an ally of the United States, that has not signed the
nonproliferation treaty, to produce additional nuclear weapons is
somehow strengthening our country or the world or is good for us. Maybe
I missed something, but I don't think so. I think what is missing is
the logic and the commitment to nonproliferation of those who
negotiated this. What is missing is the determination and the
relentless effort by this country to lead in the direction of reducing
the number of nuclear weapons and not allowing the production of more.
Mr. President, I yield the remainder of my time. How much time do I
have remaining?
The PRESIDING OFFICER (Mr. Casey). Five minutes.
Mr. DORGAN. I reserve the remaining 5 minutes.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Mr. President, I have a consent agreement that would
combine the two amendments. I ask unanimous consent that the order with
respect to H.R. 7081 be modified to provide that the Dorgan and
Bingaman amendments
[[Page 23515]]
be combined into one amendment; that all debate time specified
previously remain available and the amendment be subject to the 60-vote
threshold, as provided under the previous agreement.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________
CHILD SAFE VIEWING ACT OF 2007
Mr. DODD. Mr. President, I ask unanimous consent that the Senate
proceed to the immediate consideration of Calendar No. 588, S. 602.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
A bill (S. 602) to develop the next generation of parental
control technology.
There being no objection, the Senate proceeded to consider the bill,
which had been reported from the Committee on Commerce, Science, and
Transportation, with an amendment to strike all after the enacting
clause and insert in lieu thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Child Safe Viewing Act of
2007''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Video programming has a direct impact on a child's
perception of safe and reasonable behavior.
(2) Children may imitate actions they witness on video
programming, including language, drug use, and sexual
conduct.
(3) Studies suggest that the strong appeal of video
programming erodes the ability of parents to develop
responsible attitudes and behavior in their children.
(4) The average American child watches 4 hours of
television each day.
(5) 99.9 percent of all consumer complaints logged by the
Federal Communications Commission in the first quarter of
2006 regarding radio and television broadcasting were because
of obscenity, indecency, and profanity.
(6) There is a compelling government interest in empowering
parents to limit their children's exposure to harmful
television content.
(7) Section 1 of the Communications Act of 1934 requires
the Federal Communications Commission to promote the safety
of life and property through the use of wire and radio
communications.
(8) In the Telecommunications Act of 1996, Congress
authorized Parental Choice in Television Programming and the
V-Chip. Congress further directed action on alternative
blocking technology as new video technology advanced.
SEC. 3. EXAMINATION OF ADVANCED BLOCKING TECHNOLOGIES.
(a) Inquiry Required.--Not later than 90 days after the
date of enactment of this Act, the Federal Communications
Commission shall initiate a notice of inquiry to consider
measures to examine--
(1) the existence and availability of advanced blocking
technologies that are compatible with various communications
devices or platforms; and
(2) methods of encouraging the development, deployment, and
use of such technology by parents that do not affect the
packaging or pricing of a content provider's offering.
(b) Content of Proceeding.--In conducting the inquiry
required under subsection (a), the Commission shall consider
advanced blocking technologies that--
(1) may be appropriate across a wide variety of
distribution platforms, including wired, wireless, and
Internet platforms;
(2) may be appropriate across a wide variety of devices
capable of transmitting or receiving video or audio
programming, including television sets, DVD players, VCRs,
cable set top boxes, satellite receivers, and wireless
devices;
(3) can filter language based upon information in closed
captioning;
(4) operate independently of ratings pre-assigned by the
creator of such video or audio programming; and
(5) may be effective in enhancing the ability of a parent
to protect his or her child from indecent or objectionable
programming, as determined by such parent.
(c) Reporting.--Not later than 270 days after the enactment
of this Act, the Commission shall issue a report to Congress
detailing any findings resulting from the inquiry required
under subsection (a).
(d) Definition.--In this section, the term ``advanced
blocking technologies'' means technologies that can improve
or enhance the ability of a parent to protect his or her
child from any indecent or objectionable video or audio
programming, as determined by such parent, that is
transmitted through the use of wire, wireless, or radio
communication.
Mr. DODD. Mr. President, I ask unanimous consent that a Pryor
amendment, which is at the desk, be agreed to, the committee-reported
substitute, as amended, be agreed to, the bill, as amended, be read a
third time and passed; the motions to reconsider be laid upon the
table, with no intervening action or debate, and any statements be
printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment (No. 5684) was agreed to, as follows:
On page 6, beginning in line 4, strike ``TECHNOLOGIES.''
and insert ``TECHNOLOGIES AND EXISTING PARENTAL EMPOWERMENT
TOOLS.''.
On page 6, line 12, strike ``and''.
On page 6, line 16, strike ``offering.'' and insert
``offering; and''.
On page 6, between 16 and 17, insert the following:
``(3) the existence, availability, and use of parental
empowerment tools and initiatives already in the market.''.
The committee amendment in the nature of a substitute, as amended,
was agreed to.
The bill (S. 602), as amended, was ordered to be engrossed for a
third reading, was read the third time, and passed, as follows:
S. 602
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Child Safe Viewing Act of
2007''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Video programming has a direct impact on a child's
perception of safe and reasonable behavior.
(2) Children may imitate actions they witness on video
programming, including language, drug use, and sexual
conduct.
(3) Studies suggest that the strong appeal of video
programming erodes the ability of parents to develop
responsible attitudes and behavior in their children.
(4) The average American child watches 4 hours of
television each day.
(5) 99.9 percent of all consumer complaints logged by the
Federal Communications Commission in the first quarter of
2006 regarding radio and television broadcasting were because
of obscenity, indecency, and profanity.
(6) There is a compelling government interest in empowering
parents to limit their children's exposure to harmful
television content.
(7) Section 1 of the Communications Act of 1934 requires
the Federal Communications Commission to promote the safety
of life and property through the use of wire and radio
communications.
(8) In the Telecommunications Act of 1996, Congress
authorized Parental Choice in Television Programming and the
V-Chip. Congress further directed action on alternative
blocking technology as new video technology advanced.
SEC. 3. EXAMINATION OF ADVANCED BLOCKING TECHNOLOGIES AND
EXISTING PARENTAL EMPOWERMENT TOOLS.
(a) Inquiry Required.--Not later than 90 days after the
date of enactment of this Act, the Federal Communications
Commission shall initiate a notice of inquiry to consider
measures to examine--
(1) the existence and availability of advanced blocking
technologies that are compatible with various communications
devices or platforms;
(2) methods of encouraging the development, deployment, and
use of such technology by parents that do not affect the
packaging or pricing of a content provider's offering; and
(3) the existence, availability, and use of parental
empowerment tools and initiatives already in the market.
(b) Content of Proceeding.--In conducting the inquiry
required under subsection (a), the Commission shall consider
advanced blocking technologies that--
(1) may be appropriate across a wide variety of
distribution platforms, including wired, wireless, and
Internet platforms;
(2) may be appropriate across a wide variety of devices
capable of transmitting or receiving video or audio
programming, including television sets, DVD players, VCRs,
cable set top boxes, satellite receivers, and wireless
devices;
(3) can filter language based upon information in closed
captioning;
(4) operate independently of ratings pre-assigned by the
creator of such video or audio programming; and
(5) may be effective in enhancing the ability of a parent
to protect his or her child from indecent or objectionable
programming, as determined by such parent.
(c) Reporting.--Not later than 270 days after the enactment
of this Act, the Commission shall issue a report to Congress
detailing any findings resulting from the inquiry required
under subsection (a).
(d) Definition.--In this section, the term ``advanced
blocking technologies'' means technologies that can improve
or enhance the ability of a parent to protect his or her
child from any indecent or objectionable video or audio
programming, as determined by such parent, that is
transmitted through the use of wire, wireless, or radio
communication.
[[Page 23516]]
____________________
UNITED STATES-INDIA NUCLEAR COOPERATION APPROVAL AND NONPROLIFERATION
ENHANCEMENT ACT--Continued
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Mr. President, first, let me thank Senator Dorgan for
his leadership on this issue and for his heartfelt and very well-
articulated statement about the reasons why we need to amend this
agreement before we proceed any further. I strongly agree with him, and
I am honored to join with him in proposing an amendment that will
improve the agreement that is coming to the Senate floor tonight for
consideration.
The bill we are dealing with tonight seeks to obtain expedited
approval of the United States-India nuclear cooperation agreement. The
agreement was the result of a bill we passed into law 2 years ago--
nearly 2 years ago--that exempted India from the very export controls
that were placed into the Atomic Energy Act as a result of India's
decision to detonate a nuclear weapon in 1974--with United States-
supplied technology, I would point out.
Let me be clear: I do believe it is time that we as a nation did more
to reach out to India in areas such as energy and high technology. The
President deserves credit for recognizing that the India of the 1960s
and 1970s is not the India of today. India is a great leader in
technology and needs to be an ally of our country on a great many
issues, but I cannot support the proposed agreement before us today in
the form we are being presented.
By modifying our nonproliferation laws for India, and just for India,
and in a circumstance where India has not signed the nonproliferation
treaty, not only are we sending the wrong signal to Iran, which is a
signatory and desires to have its own nuclear program, but we are also
sending the wrong signal to North Korea, to Pakistan, and to Israel.
Those three countries are not signatories to the nonproliferation
treaty, and they have detonated nuclear weapons. So approval of the
agreement as it is now presented makes it difficult for us to justify
our nonproliferation policies to the world at large, and in particular
it makes it very difficult for us to justify them to other
nonproliferation treaty signatories, such as South Africa, Brazil, and
Taiwan, which have foresworn their nuclear weapons program as part of
signing up for the nonproliferation treaty.
The net result of approving the agreement as proposed today is that
we are making India a de facto weapon state without them having to sign
the nonproliferation treaty. India gets to have their cake and to eat
it too. They obtain nuclear weapon state status but, by not signing the
NPT, they do not have to adhere to its fundamental article VI
requirement that nuclear weapon states shall ``pursue negotiations in
good faith on effective measures relating to cessation of the nuclear
arms race.''
The amendment Senator Dorgan and I are offering seeks to make several
improvements to the underlying bill that relate to the question of what
happens if India again decides to detonate a nuclear weapon. The first
section, developed by Senator Dorgan, states simply that the United
States will not conduct trade in nuclear technology with India if they
detonate a nuclear weapon. That is sensible policy. It is consistent
with the Atomic Energy Act, which cuts off trade in nuclear technology
if states such as India detonate a nuclear device.
The second part of the amendment, which I have added to the combined
amendment, requires the President to certify to Congress that the
United States-supplied technology is not what has enabled India to go
forward with detonation of a nuclear weapon.
Let me explain why this is important. India detonated five nuclear
weapons in 1998 without the aid of advanced technology supplied by
other nations. The reason is because the 45-nation group that is called
the Nuclear Suppliers Group, or NSG, developed a consensus that they
would not ship to India sensitive nuclear technology. As a result of
the bill we passed 2 years ago, this Nuclear Suppliers Group has now
approved the export of sensitive nuclear technology to India. It is
entirely conceivable that India may want to improve their nuclear
weapons now that they have access to advanced technology from this
Nuclear Suppliers Group.
The certification we provide for in this amendment would force the
President to ensure ahead of time that appropriate export controls are
in place to begin with. It is one of the strictest conditions Congress
can place on a President, but it can be met. We routinely require end-
use monitoring of sensitive technologies that we export to other
countries. Embassy personnel inspect their purported destination to
make sure they are not used for illicit purposes. Certification, as we
provide for in this amendment, also places pressure on the President to
work with the IAEA to ensure that the safeguards applied to Indian
facilities are effective so the exported technology does not make its
way into their weapons program. It seems to me that the President
should place this level of scrutiny on our nuclear exports to India.
Let me put up a chart to make the point I am trying to make with this
part of the amendment. This chart tries to make the distinction
between--that is reflected in the underlying agreement we are going to
be voting on--between the parts of India's nuclear program that are
safeguarded--and that is, to be specific, 14 nuclear reactors and 1
fuel reprocessing plant--and then the parts of India's nuclear program
that are not subject to any safeguards--and that is substantially more.
That is eight power reactors, a fast breeder program, and its entire
military program, which consists of two plutonium reprocessing plants,
two uranium enrichment plants, and two heavy water plutonium production
reactors.
The underlying agreement we are voting on contemplates that all the
nonsafeguarded parts of the nuclear weapons program in India will be
supplied only with domestically produced fuel. The safeguarded parts
are the parts that can be supplied with imported uranium fuel. So the
theory is we can take great consolation in knowing that nothing we are
sending to India is, in fact, affecting the nonsafeguarded part of
their nuclear program.
Now, around here, I don't know if you would call this a Chinese
firewall or what you would call it--this yellow line that separates the
safeguarded from the nonsafeguarded parts of the nuclear weapons
program--but the truth is, under this agreement and the way it now
stands, it is virtually impossible for us to be assured, in any
credible way, that what is being provided in the way of technologies or
fuel to India for its nuclear program is, in fact, being kept just for
the safeguarded part.
Obviously, the other point is, as to the fuel, it is all fungible.
If, in fact, we are providing imported uranium fuel that can be used
for safeguarded reactors, there is no reason why the domestically
produced fuel can't be used for the nonsafeguarded reactors.
It is, in my view, vitally important that we try to make some
amendment to ensure that there is some degree of scrutiny over what is,
in fact, occurring there, and that is the second part of the amendment
I referred to--the net result of improving this. By modifying our
nonproliferation laws for India, which has not signed the
nonproliferation treaty, it is clear we are making an exception that
will cause great difficulty in our ability to encourage other countries
to comply with the nonproliferation treaty.
The third part of the amendment we are offering requires that if
India tests a nuclear weapon, we will not enable other countries to
further India's nuclear program. This is called the third-party
problem; whereby, we enable other countries to help India's nuclear
program. If India detonates a nuclear weapon, the President, under our
amendment, would have to recommend to Congress what export control
authorities can be used so our exports to other nuclear suppliers do
not end up helping India's program. The President, of course, would
have a wide array of such authorities to apply--
[[Page 23517]]
from end-use monitoring of the technologies that were supplied to
outright prohibition on providing any of these technologies.
The United States and India, obviously, have deep and important ties.
Many of our leading citizens have ancestry in India. Many of our
leading citizens in our high-tech community were originally born in
India. They have greatly contributed to the strength of our Nation. We
owe them a great debt of gratitude, and we honor them as we raise
questions about this agreement.
We need to draw a line in the sand in certain areas. The area of
nonproliferation, and the nonproliferation treaty in particular, is one
such area where we do need to maintain black and white distinctions,
given the terrible consequence we face if a nuclear detonation were to
occur, either on our soil or on the soil of any other nation.
The amendment Senator Dorgan and I are offering that will be voted on
this evening places clear and unambiguous requirements on the
President, should India detonate another nuclear weapon. I think that
is the least we should do in our consideration of this very important
agreement. I urge my colleagues to support the amendment.
I yield the remainder of the time.
The PRESIDING OFFICER. Does the Senator wish to call up his
amendment?
Amendment No. 5683
Mr. BINGAMAN. Mr. President, I do call up amendment No. 5683.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from New Mexico [Mr. Bingaman], for himself and
Mr. Dorgan, Mr. Akaka, Mr. Harkin, Mr. Feingold, and Mrs.
Boxer, proposes an amendment numbered 5683.
Mr. BINGAMAN. I ask unanimous consent the reading of the amendment be
dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To prohibit nuclear trade with India in the event that India
detonates a nuclear weapon and to impose certain certification,
reporting, and control requirements)
At the end of title I, add the following:
SEC. 106. PROHIBITION OF NUCLEAR TRADE IN EVENT OF NUCLEAR
WEAPON DETONATION BY INDIA.
Notwithstanding any other provision of law, the United
States may not export, transfer, or retransfer any nuclear
technology, material, equipment, or facility under the
Agreement if the Government of India detonates a nuclear
explosive device after the date of the enactment of this Act.
SEC. 107. CERTIFICATION, REPORTING, AND CONTROL REQUIREMENTS
IN EVENT OF NUCLEAR WEAPON DETONATION BY INDIA.
In the event the Government of India detonates a nuclear
weapon after the date of the enactment of this Act, the
President shall--
(1) certify to Congress that no United States technology,
material, equipment, or facility supplied to India under the
Agreement assisted with such detonation;
(2) not later than 60 days after such detonation, submit to
Congress a report describing United States nuclear related
export controls that could be utilized with respect to
countries that continue nuclear trade with India to minimize
any potential contribution by United States exports to the
nuclear weapons program of the Government of India; and
(3) fully utilize such export controls unless, not later
than 120 days after such detonation, Congress adopts, and
there is enacted, a joint resolution disapproving of the full
utilization of such export controls.
The PRESIDING OFFICER. The Senator from Connecticut is recognized.
Mr. DODD. First, let me thank my two colleagues from North Dakota and
New Mexico for combining their amendments in a way that I think makes
sense. My colleague can correct me if I am wrong, the House was similar
to both. There were somewhat different approaches, but I think they
offer some clarity as to their concerns which, let me say at the
outset, these are concerns I believe all of us share. There is not a
single one of us, that I am aware of, in this body who doesn't have the
same worries and concerns that my colleague from North Dakota
expressed, as well as my friend and colleague from New Mexico. I will
not debate the number, whether it was 25,000 or 30,000 or 20,000--
clearly, the problem with having a proliferation of nuclear devices
around is a concern to all of us. Obviously, each and every one of us
bears a responsibility to do everything we can to minimize the threat
such weapons pose.
I don't know anyone more vigilant in that effort than my colleague
from Indiana, along with my former colleague, Senator Nunn. The Nunn-
Lugar proposals, which regrettably were not pursued as aggressively as
I think they should have been by the Bush administration, were to
convince the former Soviet Union and other nations to dismantle weapons
of mass destruction and nuclear weapons in particular. That exists, and
there are those of us who would like to see it pursued more
aggressively. There are countless examples over the years of Members
who have sought various means by which we could reduce the threat. I
would argue, and I will, that this bill is very much in that tradition.
This is not a deviation from that effort. It is very much in that same
tradition others have pursued, to create and formulate the means by
which we can reduce those threats.
This bill is comprehensive in many ways. It is certainly not perfect
by anyone's stretch of imagination. Contrary to the suggestion that
there has been one hearing on this, as if somehow this has been thrown
together in the last couple weeks, there have been five major hearings
with multiple panels conducted by Senators Biden and Lugar. The other
body has conducted at least that many hearings. It all began about 4
years ago, this process, not something just a week or two ago that has
led to this.
You heard Senator Lugar say that he alone submitted 174 questions to
the State Department and other agencies, demanding their responses to
those questions and publicized them on his Web site. So the very
questions many of us have, have been addressed, maybe not to the
satisfaction of everyone but certainly pursuing the very issues.
The reason I mentioned that is if, in fact, this amendment were
adopted, of course, there would be no means by which you could resolve
these matters with the other body. They have already adopted a bill
without this language in it. Therefore, this would presumably pass
without consideration. The fact is, that come next year the
administration--because the time runs out on this--would be submitting
the agreement without any of the agreements we have included in this
bill, many of which do exactly what my colleagues from New Mexico and
North Dakota are seeking to achieve. So the irony of ironies would be
that while I respect immensely their intent, what they seek, in fact,
it would be counterproductive of the very goal they are trying to
achieve and that is to strip away everything we have achieved under the
leadership of Senators Lugar and Biden, along with Howard Berman's
leadership in the other body, to include the kind of understandings and
requirements this bill mandated.
Is this a perfect bill? Absolutely not. But if we allow the perfect
to become the enemy of the good, we are going to find ourselves, I
think, in a far more serious situation than the one Senator Dorgan and
Senator Bingaman has described to you.
I would never make the argument to my colleagues that if you adopt
this amendment--I don't say hate; my wife advises that I don't use the
word ``hate'' in front of the children--I deplore arguments that
suggest that if you adopt this, it is a killer amendment, and we would
have to go back and do further work. I think that is an insulting
argument. In fact, if an amendment is a good amendment and ought to be
adopted, we ought not to shy away from our responsibility. As a matter
of fact, I will argue, the amendment is unnecessary; existing law does
exactly what my colleagues are asking us to do today. But if we adopt
them, we run the risk of something coming back a lot worse than what
Senator Biden, Senator Lugar, the Foreign Relations Committee, over
extensive hearings, along with the work of the other body, have
accomplished and achieved. As my colleagues listen to this debate, I
hope they will take that under consideration.
[[Page 23518]]
I point out, the United States-India agreement will be resubmitted in
January if it is not approved now. The next President would not have to
seek any special law, which is what we have, to speed up the process.
Rather, he could wait us out until the Atomic Energy Act forces us to
take a vote on a clean resolution of approval of the agreement, without
any of the amendments we have adopted and worked on over the years.
Let me mention an argument Senator Lugar raised; I didn't. I regret
not having mentioned it because I think it is a compelling argument as
well. One of the arguments people need to understand is India does not
have an unlimited supply of materials by which to create nuclear
weapons. They will be faced, without outside sources of supply, to make
a choice between nuclear weapons or the commercial powerplants.
I do not intend to speak as a great expert on Indian politics or the
public mood in India, but nations, particularly ones that live in the
neighborhood--I don't have the map up here any longer--where India
resides, what choice would they make if they could only make one? Is it
going to be energy or security? That is a difficult choice. While all
of us want to see the energy choices made, a nation surrounded by
nations that have nuclear capabilities, not exactly close to the
democracy India is, by the way, may very well decide to have different
alternatives. If you are sitting in India's Parliament, you are a
member of their Congress and you have one choice to make, security or
energy, security or energy--how would we vote? How would we vote
confronted by that choice?
That is a choice with which India may well be confronted without
additional sources of energy here or supplies that would allow them to
promote the more commercial use of this power.
I don't necessarily want to put India in that position to make that
choice because I think I know what choice they would make. I suspect it
is the same choice we would make. We bear an obligation to the people
of this country to keep them secure. I suspect the Indian
parliamentarians feel likewise. When confronted by that choice, my view
is they would choose to make security the choice, the very thing my
colleagues argued against would, in fact, be driving them to that
conclusion.
Obviously, the energy debate is a critical one. Again, no one has
been more of an advocate of green technologies than our colleague from
New Mexico, one of the stalwarts in this debate for many years--not
just recently, where it has become popular to argue for alternative
energy resources. But if we take away this alternative, India is
growing--1.3 billion people. It has 300 million people living at
middle-class or upper middle-class standards. They have a billion
people living in abject poverty in India. They are seeking ways, of
course, to bring many of those people out of poverty and improve the
quality of their lives.
India understands that coal-fired electrical power plants are a
liability, but India cannot afford to slow the growth of energy
production at the same time its population is growing and trying to
deal with the economic circumstances of its people.
India says we would like to build more commercial powerplants. It
seems to me, for those of us who want to reduce the carbon footprint,
the carbon emitters with India being a major supplier of carbon
emissions it is in our interests to encourage them to move in a
different direction. If we do not have some sort of arrangement or
understanding on how to achieve that while simultaneously moving them
away from that choice I mentioned a moment ago, we end up potentially
where they have more weapons, doing little or nothing about energy
production. It is a lose-lose proposition. We end up with India with
nuclear weapons, and we end up with a nation that continues to use
coal-fired plants, of course, endangering us further when it comes to
the issue of global warming and the like. That is a further reason, I
would argue, we ought seriously to understand the import of these
amendments and appreciate the alternative presented by the bill before
us.
I mentioned earlier, in fact, the very concerns raised by my two
colleagues are covered by existing law. It is not as if there is some
vacuum that exists, that there would be no repercussions should India
decide to pursue and test nuclear weapons. Let me share with my
colleagues. Again, I invite Members or their staffs to come over and be
briefed by staff who spent literally their adult lives, their
professional careers working on these bills. The suggestion that this
was thrown together somehow in a quick hearing before the Foreign
Relations Committee in a sense fails to understand the work done by our
collective staffs on these matters going back years. In fact, previous
Members of this body--no one cared more about this issue than John
Glenn of Ohio. He was an advocate on this issue long before many were.
I am going to share in a minute some of the law that bears his name and
is still the law of the land when it comes to these issues, the Glenn
amendment, and how we deal with the issue of countries that would, in a
sense, go into the use of nuclear weapons.
This amendment would bar any and all nuclear exports for all time,
without any exception or waiver, if India detonates a nuclear device.
Section 106 sets a different standard for India than we have for any
other nonnuclear weapons state, which is what it is under the Nuclear
Non-Proliferation Treaty and U.S. law. There is no need, I think. I
think it would be very harmful to single India out in such a manner.
There are other nations in a similar situation. I don't hear amendments
being offered to suggest they all ought to be treated the same way. I
suspect you would run into a buzzsaw if you did so. We are picking out
the one great democracy in south Asia, with whom we have had a very
testy relationship for 35 years, which is critical for dealing with the
fragile issues that section of the world poses, and we are going to
say: They and no one else gets that kind of treatment.
You can imagine the reaction we might get from a nation that is now
reaching out to us for the first time in approaching half a century to
get us back on a far different track than the one we are on.
India would clearly see this provision as an effort to put in place
special penalties against that nation, if it were ever to respond.
Frankly, the proposed new section, as I said earlier, is a section I
think poses some serious issues. I have commented before, I have put
the language in of the administration. I think everyone mentioned
earlier, and I will quote from the Secretary of State, she said:
We have been very clear with the Indians. Should India test, as it
has agreed not to do so, or should India in any way violate the IAEA
safeguards agreements to which it would be adhering, the deal from our
point of view would be at that point off.
Under Secretary of State Bill Burns, before our committee, repeated
that quote to us.
What is more, as I said, the amendment is unnecessary. Several
provisions of existing law already apply to India.
The Glenn amendment sanctions under the Arms Export Control Act cut
off a wide array of foreign aid, defense exports, bank credits and
dual-use items.
There is no waiver. No waiver under the Glenn amendment. That was
modified some years later, but there would be no waiver. The Glenn
amendment is tougher in many ways than what we talking about here, we
can argue, in that it doesn't provide any kind of relief. Congress
enacted a waiver in 1999, somewhat of a waiver, after India and
Pakistan tested in the 1990s, but that waiver authority terminates for
either country that tests again. So under the modified Glenn amendment,
there is no waiver authority. Under Glenn, the role of the United
States and our relationship with India is clear.
Section 129 of the Atomic Energy Act already prohibits exports to a
nonnuclear weapon State if it detonates a nuclear device. That one is
subject to waiver by the President. India is still a nonnuclear weapon
state by definition,
[[Page 23519]]
and therefore would be included under this. That law is on the books,
very similar to what is being advocated in the amendment posed by our
two colleagues. The President could only use the waiver under section
129, I would add, if he finds that ceasing exports would be ``seriously
prejudicial'' to the achievement of the U.S. nonproliferation
objectives or would otherwise ``jeopardize the common defense and
security of the country.'' That is a high standard, I might add, for
the waiver authority.
Even if the President makes that determination, cooperation cannot
proceed until 60 days of continuous session has passed after that
determination has been submitted to Congress, further making that
provision almost impossible to apply that waiver standard.
So there are two sections, one under the Atomic Energy Act, one under
the Glenn amendment, that virtually do what our two colleagues talk
about with their amendment. The bill before us would amend the Atomic
Energy Act to ensure, by the way, that the Senate can take advantage of
expedited procedures--limits on debate and amendment--to pass a joint
resolution to overturn such a Presidential waiver.
Even if you got to that point, we have now put a further safeguard in
against it, making it virtually impossible to waive the authority under
section 129 of the Atomic Energy Act.
So the bill already improves the law relating to what could happen
with a so-called nonnuclear weapons state. We are using the language
here, but this applies to states that we all, to be honest, know have
nuclear weapons. There are several nations we all know about in that
category, but they are called nonnuclear weapons states. And yet, here
the language is very strong.
Again, I think these sections are important to note. The combination
of the two amendments does cover the ground on all of this. I point out
that Senator Bingaman's part of this amendment, this new section 107,
is not necessary either.
U.S. obligations under the Nuclear Non-Proliferation Treaty already
compel the United States to assure that its nuclear exports do not help
nonnuclear weapons states to produce weapons. That obligation bars
helping not only India but any nonnuclear weapons state. The Atomic
Energy Act and the Hyde Act already provide tools to address the
concern Senator Bingaman has raised.
Let's look at the specific provision, if you will, under the proposed
section 107. It would require a certification in the event of a nuclear
detonation by India that no United States material, equipment, or
technology contributed to the detonation.
And what happens if the President makes that certification? The
amendment does not say what happens. What happens if the President does
not make the certification, or says it does not know whether any U.S.
material, equipment, or technology was involved? This is a
certification that may well be impossible to make under the law as
drafted in this amendment.
So even with the intent to do something about it, how can you make
it? How are you going to determine whether, in fact, materials have
been used, or is it just the assumption that if one occurred, it would
be, which may be an entirely false assumption when it comes to that
country? How will we ever know for sure that no U.S. technology was
diverted?
In any case, it is the certification that carries no consequences.
The certification is not needed. Again section 104 of the Hyde act
already requires the President to keep Congress fully and currently
informed of any violation by India of its nonproliferation commitments
and of this agreement.
Any contributions by U.S. exports to an India weapons program under
the United States-India agreement would certainly be a violation of
India's commitments and of the agreement, and so would need to be
reported to us, and would very likely be reported to us long before any
detonation, I might add.
Section 2 of the proposed act requires a report from the President
after an Indian test describing those United States export controls
that could be used to minimize any potential contribution that United
States nuclear exports to third countries might make to an Indian
nuclear weapons program.
The Hyde act and the Atomic Energy Act already address this issue.
And let me quote to my colleagues again. I apologize for citing in
detail these things, but you need to know this, because statements
being made here on the floor about this, I say respectfully, are not
accurate, about what existing laws require and mandate and demand in
these areas.
Section 104(d)(5) of the Hyde act requires the President of the
United States:
shall ensure that all appropriate measures are taken to
maintain accountability with respect to nuclear materials,
equipment and technology . . . reexported to India so as to
ensure . . . United States' compliance with [obligations
under] article I of the Nuclear Non-Proliferation Treaty.
Section 104(g)(2) of the Hyde Act explicitly requires detailed
reporting on any United States authorizations for the reexport to India
of nuclear materials and equipment.
The Atomic Energy Act further requires that the United States not
engage in civil nuclear cooperation with any country without an
agreement for nuclear cooperation and that every such agreement must
contain a guarantee by the other country that it will not transfer any
nuclear material or facility to a third country without the prior
approval of the United States.
Section 127 of that act makes it explicit that for any U.S. export of
source or special nuclear material, nuclear facilities, or sensitive
nuclear technology, that material, facility, or technology may not be
retransferred to a third party without the United States's prior
consent. The transfer cannot go forward unless the third party agrees
to abide by all of the agreements of section 127.
That section also requires that the source and special nuclear
material, nuclear facilities, and sensitive nuclear technology being
exported must be under IAEA safeguards, and may not be used in or for
research and development on a nuclear explosive device.
This assures us that any such report does not contribute to India's
weapons program. The truth is that if India were to conduct another
nuclear test or reexport by third countries, United States-origin
nuclear material, equipment, or technology would be the least likely
way for India to evade a cut-off of cooperation.
If any third country were to provide United States-origin nuclear
material, or equipment, or material device from the United States-
origin material or equipment for India without the United States's
consent, the United States would have the right to cease nuclear
cooperation with that country and to demand the return of material and/
or equipment that has been provided under that country's nuclear
cooperation agreement with the United States.
So third countries are highly unlikely, given the implications under
the existing law, to reexport without our permission, or run the risk,
obviously, of facing all of the admonitions that the previously
existing law requires. A much more serious concern would be the risk
that other countries would export their own nuclear material or
equipment, not our material but their own nuclear equipment and
material technology, to India after we had cut off exports. That
concern is not addressed at all by the Dorgan and Bingaman amendment.
But the bill before us does address that concern. Their amendment
leaves that out entirely, which is actually a far more dangerous way
that this may happen.
So under the bill before us, by reiterating a provision under the
Hyde Act that if India should test again:
It is the policy of the United States to seek to prevent a
transfer to India of nuclear equipment, of materials or
technology from other participating governments in the
Nuclear Suppliers Group or from any other source.
This bill already lays down a marker regarding the real concern if
India were to test. Again, whether it is reexport or direct shipments,
we are in a position, I think, to respond aggressively. I point out,
you defeat this bill, we are
[[Page 23520]]
back to the agreement and a lot of this, other than what I have
mentioned in existing law, does not apply.
So, again, I say to my friends and colleagues who offered the
amendment, this is not a debate about whether some people care about
nuclear weapons and others do not. The question is, are we being smart
and intelligent about moving a major democracy that lives in a
dangerous part of the world into a direction that will make it far more
cooperative with us in doing exactly what the underlying amendment
seeks to do, that is, to move away from weapons to commercial use, to
dealing with the carbon emissions that are occurring here, to provide
that kind of new relationship with India that I think is absolutely
critical for our safety and security in the 21st century.
Walk away from this, drive a wedge between India and the United
States in that part of the world, then I think you are going to have
exactly the kind of problem our two colleagues have suggested. It gets
closer to what they fear most. I believe what we have offered our
colleagues today drives us further away from that outcome, which is
what all of us ought to be trying to achieve. That is the reason I
reject these amendments, and urge my colleagues to do so when they
occur on a vote later today. I yield the floor.
The PRESIDING OFFICER. The Senator from Indiana.
Mr. LUGAR. Mr. President, I join my distinguished colleague Senator
Dodd in rising in opposition to the amendment offered by the Senators
from North Dakota and New Mexico.
I believe the bill before us today and the Hyde act passed by
Congress in 2006 addressed the possibility of a future Indian nuclear
test in a very clear and definitive way. I am confident the Congress
has provided the necessary assurances and authorities to protect United
States interests and promote strong nonproliferation policies in the
event of an Indian nuclear detonation.
The amendment seeks to address a concern that the Foreign Relations
Committee addressed in 2006, and last month when we voted 19 to 2 to
report the legislation pending before the Senate. Both bills ensure
that there is no ambiguity about the United States's legal and policy
responses to a future Indian nuclear test.
If India tests a nuclear weapon, the 123 Agreement is over. This
means the President could terminate all United States nuclear
cooperation with India and fully and immediately use the United
States's rights to demand the return of all items previously exported
to India. This would include any special nuclear material produced by
India, through the use of any nuclear materials and equipment or
sensitive nuclear technology exported or reexported to India by the
United States. These steps can occur as a response to any nuclear test,
including instances in which India describes its actions as being ``for
peaceful purposes.''
In addition, the United States could suspend and revoke any current
or pending licenses. One of the primary purposes of this agreement is
to deter India from testing nuclear weapons. New Delhi has more to gain
from peaceful nuclear cooperation through this agreement than in
testing.
The Hyde act and the bill before us were crafted to ensure that this
is the case. Indian leaders argue that they retain the right to test.
This is true. They are a sovereign nation. However, India has been
warned repeatedly that consequences of another nuclear test would be
dire.
In 2006, Secretary Rice stated in testimony that:
We have been very clear with the Indians. Should India
test, as it has agreed not to do, or should India in any way
violate the IAEA safeguards agreements to which it would be
adhering, the deal from our point of view would at that point
be off.
In a question for the record, I asked Secretary Rice at that time
what the consequences of an Indian test would be. And she noted that
under existing law:
No nuclear materials and equipment or sensitive nuclear
technologies shall be exported to any nonnuclear weapons
state that is found by the President to have detonated a
nuclear explosive device.
Now, under United States law, and the Nuclear Non-Proliferation
Treaty, India is a nonnuclear weapons state. In 2006 the Hyde act
waived the application of the sanctions in the Atomic Energy Act to
events that occurred before July 2005 when President Bush and Prime
Minster Singh signed the joint statement. This waiver was intended to
capture India's nuclear tests of 1974 and 1998, and permit U.S.-Indian
cooperation in spite of those actions.
This does not apply to future Indian actions. So if India were to
test tomorrow, the waiver provided by Congress in 2006 would not apply,
and nuclear cooperation could be terminated. Let me repeat that. Under
a law passed 2 years ago setting the parameters for congressional
consideration of this agreement, if India were to test a nuclear
weapon, terminate, or abrogate IAEA safeguards, materially violate IAEA
safeguards, violate an agreement for cooperation with the United
States, encourage another nonnuclear weapons state to engage in
proliferation activities, or engage in unauthorized proliferation of
sensitive nuclear technology, the agreement and United States
cooperation could be terminated.
If that is not enough to satisfy the Senators' concerns, I would
direct them to article 14 of the agreement:
Should India detonate a nuclear explosive device, the
United States has the right to cease all nuclear cooperation
with India immediately, including the supply of fuel as well
as the request for the return of any items transferred from
the United States, including fresh nuclear fuel.
Under Secretary Rood stated in testimony before the Foreign Relations
Committee on September 18, 2008 that:
Just as India has maintained its sovereign right to conduct
a test, so too have we maintained our right to take action in
response.
Under article 14, the United States can also demand the return of any
nuclear materials and equipment transferred pursuant to the agreement
for cooperation as well as any special nuclear material produced in
India, if it detonates a nuclear explosive device. This was confirmed
in response to a question posed by the House of Representatives. The
administration answered that even ``the fuel supply assurances
[contained in the 123 agreement] are not . . . meant to insulate India
against the consequences of a nuclear explosive test or a violation of
nonproliferation commitments.
The United States would be able to exercise its right under article
14 of the agreement to require the return of materials and equipment
subject to the agreement after, one, giving written notice to India
that the agreement is terminated and, two, ceasing all cooperation
based on a determination that a mutually acceptable resolution of
outstanding issues has been impossible or cannot be achieved through
consultation.
Both of these actions are within the discretion of the U.S.
Government and do not require Indian agreement, and both can be taken
at once.
In sum, the United States-India peaceful nuclear cooperation
agreement ceases if India tests. This conclusion is consistent with any
reasonable interpretation of the Atomic Energy Act, the Hyde Act, and
article 14 of this agreement. As a result, this amendment is
unnecessary. The issues it seeks to address have been remedied. I urge
colleagues to vote against the amendment. The real effect of adoption
of this amendment would be to, once again, delay consideration and
approval of this important agreement. It is time to move forward and to
vote on this legislation and start peaceful nuclear cooperation between
the world's two largest democracies.
The second portion of the amendment we are considering now requires a
certification and a report that are at best duplicative of provisions
already in law. This amendment would simply delay implementation of the
U.S.-India 123 agreement in order to effect requirements that have
already been enacted. First, the amendment requires the President to
certify to Congress that no technology, material, or equipment, nor any
facility supplied by the United States to India under the 123 agreement
assisted with a nuclear detonation, if one occurs in India. In my
opinion, this provision is duplicative of
[[Page 23521]]
section 104(g) of the Hyde Act passed by Congress in 2006. Under that
existing law, the President is already required to report annually on
whether U.S. civil nuclear cooperation with India is in any way
assisting India's nuclear weapons program. This report is to include
information on whether any U.S. technology has been used by India for
any activity related to the research, testing, or manufacture of
nuclear explosive devices. It is unclear what additional information is
required by the Senator's amendment than is available each year now to
Congress under the Hyde Act.
Second, the amendment requires a report on any export controls that
could be used by the United States if India detonated a nuclear
explosive. The purpose of the export controls would be to ensure that
no U.S. materials, equipment, or technology that may be in countries
other than India could be reexported by those nations to India so as to
minimize all trade with India and ensure that no U.S. technology or
exports contributed to their nuclear weapons program.
Again, this provision is repetitive. In 2006, Congress endorsed
section 105 of the Hyde Act that created a Nuclear Export
Accountability Program for all U.S. exports to India. The purpose of
section 105 was to ensure that our country was taking all appropriate
measures to maintain accountability of all nuclear materials,
equipment, and technology sold, leased, exported, or reexported to
India to ensure full implementation of the IAEA safeguards in India and
U.S. compliance with article I of the NPT. The program created by the
Hyde Act is a highly detailed accounting system focused on ensuring
that India is complying with the relevant requirements, terms, and
conditions of any licenses issued by the United States regarding
exports to India. This program represents the most comprehensive and
detailed system of accounting ever imposed. I believe it provides
substantially the same information that is required in the Senator's
amendment, without the need for a new law.
The Hyde Act also addressed the concern that other nations might
continue to supply India with any technology or fuel in the event of a
cutoff by the United States. Section 103 of the Hyde Act makes it the
policy of the United States to strengthen the guidelines and decisions
of the Nuclear Suppliers Group to move other nations toward
``instituting the practice of a timely and coordinated response by
[Nuclear Suppliers Group] members to all such violations, including
termination of nuclear transfers to an involved recipient'' and
discourage ``individual NSG members from continuing cooperation with
such recipient until such time as a consensus regarding a coordinated
response has been achieved.''
The conference report on the Hyde Act clearly states the definitive
interpretation of that provision. It reads:
The conferees intend that the United States seek agreement
among [Nuclear Suppliers Group] members that violations by
one country of an agreement with any NSG member should result
in joint action by all members, including, as appropriate,
the termination of nuclear exports. In addition, the
conferees intend that the Administration work with individual
states to encourage them to refrain from sensitive exports.
Section 103 of the Hyde Act also made it U.S. policy to seek to
prevent the transfers of nuclear equipment, material, or technology
from NSG participating governments to those countries with whom nuclear
commerce has been suspended or terminated pursuant to the Hyde Act, the
Atomic Energy Act, or any other U.S. law.
In other words, if U.S. exports to a country were to be suspended or
terminated pursuant to U.S. law, it would be U.S. policy to seek to
prevent the transfer of nuclear equipment, material, or technology from
other sources, including from other countries with which the United
States has substantial nuclear trade.
In sum, the amendment is duplicative. The issues raised here have
been thoroughly dealt with under the Hyde Act of 2006, and the
legislation currently before us. As a result, the impact of this
amendment would simply be to delay congressional approval of this
important agreement by sending it back to the House of Representatives.
I do not believe such a course serves the U.S. security interests, and
I urge defeat of the amendment.
I yield the floor.
The PRESIDING OFFICER. The Senator from Missouri.
Financial Rescue
Mr. BOND. Mr. President, I am in strong agreement with the bipartisan
leadership of the Foreign Relations Committee. I will address those
issues shortly. But, first, since we have a rather full legislative
calendar this evening, I will touch briefly on the financial system
rescue, a rescue of a locked-up credit system which is having its
impact on Main Street, where I live in the hearthand, and in every
community in the Nation where credit is locked up.
Today I was advised that the State of Missouri cannot issue bonds to
build highways. The State of Maine is also having trouble. Local
governments can't get loans. There is no money available in the credit
markets for municipal bonds at reasonable rates. There is a threat that
workers will not get their paychecks if businesses or payroll companies
cannot get the loans they need. Families will not be able to get loans
for college education, to buy a car, to buy a home. Farmers will not be
able to get operating loans they must have in Missouri to begin their
normal agricultural operations.
When I came to the floor a week ago yesterday, I said we must pass
something. At that time I said the Treasury's proposal lacks
accountability, taxpayer protection, and transparency. Thanks to the
good work of our negotiators--and I commend the Senator from
Connecticut, Mr. Dodd, Senator Gregg from our side, and the House
negotiators for putting in those elements, as they are critical--the
taxpayers have a triple level of protection against losses. The CBO has
come out with a score saying it will be far less than the $700 billion.
There are some who think we might recoup all of it, but it is far
cheaper than continuing the process we have right now where Federal tax
dollars are being used to come to the rescue of failing savings and
loans, investment banks, and we don't get any equity from those
efforts. We don't have a means of recouping it. What is even more
important, it does nothing to unlock the credit gridlock that threatens
to bring this economy to a halt, with workers losing their jobs, small
businesses unable to operate.
Yesterday, I strongly urged that we raise the Federal deposit
insurance limit from $100,000 so small businesses that have more than
$100,000 don't have to continue taking their money out of the banks,
leaving the banks less capital available to make loans, in order to get
protection of U.S. Treasury deposits. I heard the stories, and I talked
with a broker in Missouri yesterday who said: Small business clients
are trying to move all their money out of banks above $100,000 and put
it into Treasuries. Again, I am delighted that the leaders, our
negotiators, and the bipartisan leadership in both Houses agreed to
extend the FDIC limit to $250,000. We will be looking at all of those
things, as well as general regulation of the financial markets when we
return. I have lots of ideas. If anybody cares, I will be sharing them
at the appropriate time.
I am also delighted that we are going to include the tax extenders,
tax extenders that businesses need to continue to operate; tax
extenders that, unfortunately, would only extend on a year-to-year
basis but are necessary for profitable operation so businesses can
continue to hire and build the economy. Probably the greatest part of
that is delaying the burdensome and punitive alternative minimum tax
that is now threatening to hit many middle-income working Americans,
unless we pass this bill. Another element, on which my colleague from
Iowa, Senator Harkin, has been a leader, is getting disaster relief.
Residents in Missouri need it. Iowa needs it. Our neighbors in Illinois
need it. Many other places in the Nation need disaster relief. That is
another must-pass piece of legislation.
To return to the subject that the Senators from Connecticut and
Indiana
[[Page 23522]]
are addressing, we currently have before us a number of legislative
opportunities that, if we act and act properly, would send a
reinforcing signal to our allies and friends in the world that the
United States values and appreciates their support and cooperation. We
all know that anti-Americanism is growing throughout the world. It is
most evident in the socialist vitriol being spewed by Hugo Chavez in
Venezuela, Mahmoud Ahmadinejad in Iran, and the widespread suspicion
throughout the Muslim world about America's intentions. In places such
as Southeast Asia and south Asia, where we are competing for influence
with an emerging China, we must increase our engagement and strengthen
our economic and strategic links with countries such as India, which I
will speak to in a minute.
Let's face it, we have a lot of work to do in rebuilding America's
image abroad and increasing security and stability throughout the
world. But we have a number of opportunities before us, opportunities
we must act upon. The way in which we get there is by engaging and
deploying our Nation's smart power. This consists of, but is not
limited to, public diplomacy efforts, educational exchanges, deployment
of more Peace Corps volunteers and USAID foreign service officers, and
supporting free-trade agreements and increased economic engagement.
The first target of opportunity where America must act is Colombia.
Congress must act on the Colombia FTA and renew the Andean Trade
Preferences. Doing so would solidify our image as a nation committed to
helping a strategic ally in Latin America that is, in fact, standing
shoulder to shoulder with us.
Colombia is a remarkable success in the fight against terrorism and
narcotrafficking that needs to be told. It is a country where its pro-
American leader, President Alvaro Uribe, has led a surge against
narcoterrorists militarily while simultaneously improving the overall
security, economy, and safety of the civilian population. They have
done so while ensuring that protection of human rights and adherence to
international humanitarian law are fully integrated into their security
forces.
In my visit there just over a month ago, I was greatly encouraged by
the tangible evidence I saw of a country in complete transformation.
Just 6 years ago, in 2002, as much as 40 percent of Colombia was
controlled by terrorist groups and ruthless narcotics-trafficking
cartels. Many of my colleagues visited Colombia at that time and
brought back grim reports of a country slipping into a failed state.
The PRESIDING OFFICER. There is an agreement to recess at 12:30.
Mr. BOND. Well, Mr. President, might I ask consent to conclude my
remarks.
Mr. DODD. I say to the Senator, he can do that. I will propound a
consent request, Mr. President, that the Senator be allowed to conclude
in 5 minutes. Is that appropriate?
Mr. BOND. Yes.
Mr. DODD. Five minutes; and my colleague would like 15 minutes. So I
ask, Mr. President, unanimous consent that the Senator from Missouri be
allowed to proceed for 5 minutes and the Senator from Iowa for an
additional 20 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BOND. Mr. President, I thank the Chair and thank my colleagues.
Since 1998, the United States has been supporting the
counternarcotics effort President Clinton initiated known as Plan
Colombia, and today our mutual objectives have evolved from a strict
counternarcotics focus to encompass counterterrorism activities as
well. Our investment has paid off.
With U.S. aid to Colombian security forces and assistance and trade
preferences under the Andean trade preferences agreement, the Colombian
people have been positively transforming their nation. Others, however,
under the Andean trade preference agreement in Bolivia and Ecuador have
produced less encouraging results, even taking sides with aggressively
hostile Hugo Chavez.
I believe we ought to have a debate about extending them the full
benefits of the Andean trade agreement. If I had the opportunity to
offer an amendment, I would have limited the questionable Governments
of Ecuador and Bolivia to 1 year while giving much longer protection to
Colombia.
The message is simple: reward our friends and allies in the world,
not those who wish us ill or support our enemies.
Colombia has been our friend and ally in an increasingly left-
leaning, anti-American Latin America. We must take the opportunity to
reward and thank them by passing the Colombia FTA.
This agreement also benefits America's economy by increasing exports
and generating jobs. Upon entry into force of the agreement, over 80
percent of U.S. exports of agricultural, consumer, and industrial goods
to Colombia would enter duty-free immediately.
The Colombian free-trade agreement will benefit America.
Another strategically important part of the world where the United
States has an opportunity to increase cooperation and deploy its smart
power is in India.
India is a friendly democracy strategically sitting between the two
places American strategists worry most about: China and the Middle
East.
We are natural allies as two of the world's largest democracies and
we should be much closer. And the feeling, by and large, is mutual
among the people of India.
India has more Muslims--150 million or so--than any other country in
the world except Indonesia, which I have spoken extensively on this
floor about engaging more proactively. Positive engagement of American
smart power and increased economic opportunities will help prevent the
likelihood of al-Qaida or radicalization of this large Muslim
population.
During my trip to India in March of 2006, the major item of interest
to all of the Government and private-sector officials I met, from Prime
Minster Singh to businessmen in New Dehli, was the support for the
civilian nuclear technology agreement which was signed as I was in the
air. I was asked about it when I landed and could not answer. But I
spent a day being fully briefed by our Embassy and intelligence
officials.
After extensive discussions with Indian and American officials, as
well as intelligence briefings, I reached the conclusion that this
agreement is a very positive step for the United States and India.
It would aid in cementing a good working relationship with the
world's largest democracy in a strategic part of the world. I support
this agreement and agree with our bipartisan leadership that we must
defeat the amendments which would merely delay and possibly sidetrack
approval.
India has three paramount challenges ahead that it must address:
First, it must improve its infrastructure and roads. Second, it must
deal with the extreme poverty of its huge rural population. Thirty
percent of its population live below the official poverty line. Third,
India, just like the United States, must be able to meet the demand for
increases in energy.
A strong relationship between India and the U.S. is vital to ensuring
peaceful development and continued prosperity in South and Southeast
Asia.
Regional rivalries, particularly with China will continue to heat up
in a race for energy to fuel both India's and China's rapidly expanding
economies and societies. An increase in nuclear power production in
India through the U.S.-India Civil Nuclear Agreement would help to cool
these rivalries in their race for energy resources.
In a land where air quality is a major problem, despite recent
improvements, this agreement would allow India to meet its surging
energy requirements in an environmentally friendly manner.
Further, increasing the supply of energy in India, make no mistake
about it, also indirectly helps consumers at the pump here at home as
well.
In addition to nuclear power, during my visit I also encouraged the
development of clean coal technology. With the fourth largest coal
reserves in the
[[Page 23523]]
world, India and the U.S. should work together to develop that source
of energy as well.
Developing energy solutions together with India will increase our
engagement and lead to other economic opportunities for Americans.
I hope my colleagues will support this agreement between the United
States and India without amendment.
It will safeguard Indian nuclear facilities and help meet the surging
demand for global energy supplies in this critical Nation.
And most importantly, it will solidify our relationship with a
strategically important country that for too long suffered under the
burden of a Soviet-style economy. Now it is opening its market, shares
our democratic values, and is on its way to becoming one of the world's
three largest economies.
I urge my colleagues to act on solidifying our partnership with two
critically important countries, Colombia and India.
Tribute To Senator
Pete Domenici
Mr. President, I want to say that the passing of the mental health
parity bill will be a great tribute to a wonderful friend, Pete
Domenici, a true icon. He has been a longtime champion of this issue,
and this will be a great testament to his leadership.
I worked with Pete on the Budget Committee. I say thanks, Pete, for
making me take all the tough votes. It was ugly but necessary, just
like the financial rescue package.
He is most recognized for his work on energy. I am very proud to have
supported him in his efforts over many years to develop an abundant
energy resource, long before $4 gasoline brought the issue home to
every American.
Just as important to me, I will miss the great friendship of a
wonderful man, Pete Domenici, and his magnificent wife Nancy.
Pete is known for his devotion to his friends and family--to his wife
Nancy of 50 years and their 8 children.
Pete is also known for his devotion and dedication to New Mexico.
Born and raised in New Mexico, Pete has served his State in the U.S.
Senate now for 36 years--making him the most senior Senator New Mexico
has ever had.
Pete has also earned the title as the only Republican to ever be
elected by New Mexico for a 6-year Senate term--in a State not known to
lean Republican.
Pete's contributions to his State are well known to his constituents
in New Mexico--whether it is fighting for solutions to the State's
water crisis, supporting New Mexico schools, or ensuring New Mexico
gets their fair share of tax dollars.
Pete's contributions to our Nation are also well known. He
understands the importance of keeping America as a leader in science
and technology and has worked for improvements to the math and science
education our school children need to succeed.
Pete has also fought passionately for fiscal responsibility to ensure
tax payer dollars are spent wisely and curbing nuclear proliferation to
keep our communities safe.
In recent years, Pete has used his role as chairman or ranking member
of the Energy and Natural Resources Committee to fight for our Nation's
energy security.
Pete worked across the aisle to pass the first comprehensive energy
legislation since 1992. Because of Pete and the bill he got through
Congress, our Nation began investing in our own energy sources.This
bill provided incentives to expand the production of energy from wind,
solar, geothermal and biomass sources to promote cleaner alternative
sources of energy.
Pete also ensured that this bill promoted research and development of
hydrogen and fuel-cell technology.
Pete didn't end the fight for our Nation's energy independence in
2005 though.Since that time, he has been a leader in the Senate calling
for more action.
Before the gas price crisis that is now affecting families across the
country, Pete sounded the alarm.He has called for bringing relief to
families struggling with pain at the pump by tapping our own domestic
supplies of gas and oil.
Pete has proposed the commonsense proposal--the Gas Price Reduction
Act--to end our Nation's energy crisis.
It is this foresight, this leadership, and this passion to making our
Nation a better place and for making our communities better for our
families that will make Pete Domenici missed by all--Republicans and
Democrats alike.
Mr. President, I thank the Chair and yield the floor.
The PRESIDING OFFICER (Mr. Rockefeller). The Senator from Virginia.
Mr. WARNER. Mr. President, I understand there is an order that the
distinguished Senator from Iowa will be recognized next. But I asked
him graciously, would he give me a minute to speak in support of the
United States-India nuclear cooperation agreement. I strongly endorse
this agreement because as one of those who advocate greater nuclear
power in our Nation, the industrial base of India will work with our
industrial base at this time when we need to increase the number of
plants we have in our Nation.
The United States-India Nuclear Cooperation Approval and
Nonproliferation Enhancement Act will provide congressional approval of
the agreement reached between the United States and India that will
pave the way for bilateral cooperation in civilian nuclear energy. This
agreement resulted from years of diplomatic negotiations. I note that
my dear friend, Ambassador Nick Burns, helped lay the foundation for
this agreement during his tenure as Under Secretary of State for
Policy.
As I publicly stated when this agreement was first announced in March
2006, it is important that as we move to implement this historic
arrangement with India, we preserve two equally important objectives: a
strengthened strategic partnership with India that includes mutually
beneficial cooperation in civilian nuclear energy; and preservation of
the nuclear nonproliferation regime to prevent the further spread of
nuclear weapons and related technologies. I believe the bill ably
crafted by Senators Biden and Lugar seeks to advance both of those
objectives.
As part of this agreement, India has agreed to separate its civilian
nuclear fuel cycle from its military program, and to place the civilian
program under full safeguards to be monitored by the International
Atomic Energy Agency. This arrangement is intended to ensure that
cooperation in civil nuclear energy will not assist India's nuclear
weapons program in any way. India has also agreed to maintain its
moratorium on nuclear testing, work toward a Fissile Material Cutoff
Treaty, and strengthen its domestic nuclear export control laws. The
bill providing congressional approval for the agreement makes clear
that in the event India were to test a nuclear weapon in the future,
cooperation under this agreement would be terminated.
Facilitating India's development of civilian nuclear energy will make
an important contribution to a cause I value highly: reducing the
emission of greenhouse gasses into the environment. As nations such as
India grow and have increasing requirements for energy, it is
imperative for the health of our global environment that they turn
increasingly to clean sources of energy such as nuclear power.
I am also hopeful that this agreement will open the door to United
States-India trade and investment in nuclear energy, and lead to new
business opportunities for American firms with expertise in civilian
nuclear power. Today, the United States is looking to expand its
production of civilian nuclear power; to do so with the participation
of the industrial base of India should help to expand the safe and
economical production of civilian nuclear energy in both countries.
Mr. President, I support Senate approval of the United States-India
Nuclear Cooperation Agreement because I believe it will advance the
United States-India strategic partnership, promote a clean energy
source to meet India's growing demand for energy, open the door to new
business opportunities for the U.S. nuclear energy sector, and
[[Page 23524]]
still promote and preserve important nonproliferation practices and
principles which remain in the interest of the United States and indeed
the international community.
I thank the Presiding Officer and my colleagues.
The PRESIDING OFFICER (Mr. Tester). The Senator from Iowa.
Mr. HARKIN. Mr. President, I come to the floor to express my
opposition to this deeply unwise United States-India Nuclear
Cooperation Approval and Nonproliferation Enhancement Act. In truth,
this is not a nonproliferation enhancement act; it is a
nonproliferation degradation and weakening act. If we pass this
legislation, we will reward India for flouting the most important arms
control agreement in history, the Nuclear Non-Proliferation Treaty, and
we will gravely undermine our case against hostile nations that seek to
do the same.
At a time when one of our primary national security objectives is to
mobilize the global community to prevent Iran from producing nuclear
weapons, the legislation before us would severely undermine our
credibility and consistency.
India has refused to sign the 1968 Nuclear Non-Proliferation Treaty--
one of only four nations, by the way--and, three decades ago, produced
its first nuclear weapon. It was precisely for this reason that
following India's first nuclear test in 1974, the United States felt
compelled to create the Nuclear Suppliers Group.
Since the 1954 Atomic Energy Act, the United States has prohibited--
has prohibited--the sale of any nuclear technology, peaceful or not, to
any nation, such as India, that does not have full nuclear safeguards--
full nuclear safeguards. As was pointed out earlier by my colleague
from North Dakota, Senator Dorgan, right now India has 22 nuclear
reactors. Under this agreement, only 14 will come under IAEA,
International Atomic Energy Agency, safeguards--14. What about the
other eight? What is going to happen to them? They are not under any
safeguards at all. So, again, we are undermining and we are overturning
what the United States has been doing for over 50 years.
The legislation we now have before us permits the United States to
unilaterally break that ban. It will open the floodgates for other
nations, such as France and Russia, that already have agreements to
sell to India pending--pending--the approval of this deal.
Listen to the views of LTG Robert Gard, chairman of the Center for
Arms Control and Proliferation. I quote his words:
The greatest threat to the security of the United States is
the proliferation of nuclear weapons. This deal [with India]
significantly weakens U.S. and international security by
granting an exception to the rules of the Nuclear Suppliers
Group and American laws, thereby undermining the entire non-
proliferation regime and inviting violations by other
nations.
I would add there is nothing in this agreement to prevent India from
continuing on a parallel path its robust nuclear weapons program. India
is allowed to continue producing--to continue producing--bomb-making
material, and it is free to expand its arsenal of nuclear weapons. Even
worse, there is nothing in this legislation to prevent India from
resuming nuclear weapons testing.
So I ask, why, in the twilight of the Bush Presidency--and we know
what his ratings are and how the people feel about this Presidency--why
are we rushing to pass this gravely flawed agreement? It was hustled
through the other body without any hearings and without a vote in the
House Foreign Affairs Committee. Here in the Senate, the Foreign
Relations Committee held just one hearing with just one witness who
spoke in support of the agreement. Until Senators objected, an attempt
was made to pass the bill on the floor without any debate whatsoever.
Given the monumental national security implications of this
legislation--casting aside core principles of the Nuclear Non-
Proliferation Treaty--this lack of debate and due diligence is simply
extraordinary.
Leading arms control experts have condemned this agreement. Leonor
Tomero, director of nuclear nonproliferation at the Center for Arms
Control and Nonproliferation, rendered this verdict:
The Bush administration ignored congressional conditions
and gave away the store in its negotiations with India, with
nothing to show for the deal now except having helped foreign
companies, enabled the increase of nuclear weapons and
nuclear-weapons materials in India, and seriously eroded a
thirty-year norm of preventing nuclear proliferation.
India is a peaceful nation, a strong democracy, and a friend of the
United States. I have tremendous respect for India. But there are facts
that must be acknowledged: India is one of only four states that have
refused to sign the Nuclear Non-Proliferation Treaty; India continues
to produce fissile material and expand its nuclear arsenal; India does
not have International Atomic Energy Agency safeguards on all elements
of its civilian nuclear program; and India has failed to file a list of
facilities that will be subject to the IAEA safeguards. According to
the U.S. Department of State, in the past, Indian entities have sold
sensitive missile technologies to Iran--to Iran--in violation of U.S.
export control laws.
I might just add one other thing. It has been said time and time
again that India is a great friend of the United States. I suggest that
one go back and look at the votes in the United Nations General
Assembly and see how many times India votes with the United States and
has since the establishment of the United Nations. It is dismal. I was
trying to get that before the debate today, going all the way back. I
had that at one time. But I can tell you, last year, in 2007, in the
General Assembly, India voted with the United States 14 percent of the
time--one of the lowest in the world. This great friend of the United
States supported us in the United Nations 14 percent of the time. Is
that a real friend?
As I said, one more item: India, 22 reactors; only 14 are going to
come under IAEA safeguards, the other 8 used for military weapons
programs. Yet, despite this record, the legislation before us would
give India the rights and privileges of civil nuclear trade that
heretofore have been restricted to members in good standing of the
nonproliferation treaty.
As others have pointed out, this would create a dangerous precedent.
It would create a distinction between kind of ``good'' proliferators
and ``bad'' proliferators. It would send mixed, misleading signals to
the international community with regard to what is and is not permitted
under the nonproliferation treaty. Under this legislation, the United
States would be saying, in effect, that India is a ``good''
proliferator and it should get special favorable treatment. What if, in
the months ahead, China or Russia decides to recognize Iran as a
``good'' proliferator? On what grounds would we object, having
rewritten the rules to suit our own interests and certain special
interests with regard to India?
I oppose this legislation. But there is one element of this
prospective agreement with India that I believe is particularly
dangerous and needs to be changed. It was talked about earlier. Under
the 2006 Henry J. Hyde Act, the United States must--must--ban the
transfer of enrichment or reprocessing technologies to India and it
must cut off--must cut off--nuclear trade with India if that nation
resumes nuclear testing. The administration has successfully pressured
the Nuclear Suppliers Group to approve an India-specific waiver that
does not incorporate these consequences if India resumes nuclear
testing. This is virtually an invitation to India to resume nuclear
testing, secure in the knowledge that a resumption of testing would not
nullify this new nuclear trade agreement.
I believe this to be a grave mistake. That is why I am joining with
Senator Dorgan and Senator Bingaman and others to offer a commonsense
amendment to this legislation in order to send an unambiguous warning
to India with regard to resumption of nuclear testing. Our amendment
states:
Notwithstanding any other provision of law, the United
States may not export, transfer, or retransfer any nuclear
technology, material, equipment, or facility
[[Page 23525]]
under the Agreement if the Government of India detonates a
nuclear device after the date of the enactment of this Act.
It is very simple, very straightforward.
In order to protect the integrity of the world's nonproliferation
regime, I urge my colleagues to vote against the United States-India
nuclear energy cooperation agreement. It will set a dangerous
precedent, and it will weaken our efforts to deny Iran a nuclear
weapon. But if nothing else, at least we can adopt the amendment being
offered by Senator Dorgan and Senator Bingaman and others to say that
if, in fact, they do detonate a nuclear device, the United States will
stop any export, transfer, or retransfer of any nuclear technology,
material, or equipment to India. So, again, I am a realist. I recognize
that this seems to be on a fast track. It will likely go to passage. So
to minimize the damage, I urge Senators to support the Dorgan-Bingaman
amendment which will give India strong incentives not to resume nuclear
testing.
Mr. President, I yield the floor.
____________________
RECESS
The PRESIDING OFFICER. Under the previous order, the Senate stands in
recess until 2:15 p.m.
Thereupon, the Senate, at 12:47 p.m., recessed until 2:15 p.m. and
reassembled when called to order by the Acting President pro tempore.
Mr. CARPER. Mr. President, I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. WARNER. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. WARNER. Mr. President, I wish to proceed at this time as in
morning business.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
____________________
TRIBUTE TO SENATORS
Mr. WARNER. Mr. President, I rise today, as one of those who made the
weighty decision not to seek reelection, to share my most personal
thoughts--tributes--to my esteemed colleagues who will quietly, humbly,
and with a deep sense of gratitude to their States, to our Nation,
bring to a conclusion their public service as U.S. Senators.
This is a diverse group of Senators. Whether we hail from small
farms, small cities or, in my case, from major metropolitan areas, we
bring different backgrounds, different interests. That diversity gives
the Senate its strength to serve equally all Americans. What we share,
however, is an unwavering love for our States, our country and for the
institution of the U.S. Senate.
We aspire to Winston Churchill's quote: ``We make a living by what we
get; we make a life by what we give.''
It has been my privilege, over my 30 years in the Senate, to serve
with a total of 261 Members. Each, almost, shall be remembered as a
friend.
I want to say a few special, heartfelt words about Senator Pete
Domenici.
Pete Domenici
I first came to know Pete Domenici when I arrived in the Senate in
1979. He beat me here by 6 years, and now has served New Mexico with
distinction for 36 years. Pete is a veritable renaissance man: baseball
player, math teacher, lawyer, city commissioner, senator and, most
importantly, a loving husband, father and grandfather.
Senator Domenici made his mark with his leadership on fiscal and
energy issues, especially with his influence in promoting clean,
carbon-free, nuclear energy and moving America forward now that we have
the reality of an energy shortage and a mission to lessen America's
dependence on imported energy. America must move forward by increasing
and enhancing its capability to develop nuclear powerplants. At one
time in my career, I was privileged to be secretary of the Navy, and
during that period, America had, either at sea or in port, some 70-plus
naval vessels powered by nuclear plants, and we had a safety record
second to none. That can, and will, be duplicated with our growing
domestic programs.
A hallmark of my dear friend Pete, whom we sometimes call a ``grizzly
old cuss,'' is how he so often expresses his feelings for his fellow
Senators by saying, ``I love you, brother.'' Pete, we return that deep
respect and affection.
Chuck Hagel
Senator Chuck Hagel has served his native Nebraska and his country
with true heroism. When I was privileged to serve in the Department of
the Navy during the war in Vietnam, Chuck Hagel, together with his
brother, both served with courage in the same Army unit in South
Vietnam. He was awarded the Purple Heart not once but twice for his
heroism and sacrifice in combat leadership.
His career has spanned the spectrum from public servant to
entrepreneur, and this has given him a perspective on the world and
global affairs, as well as of Main Streets in the hometowns and cities
of his State.
Senator Hagel will be remembered for his efforts on behalf of his
fellow veterans and men and women in uniform, together with their
families. At one time he served as president of the USO.
One of his proudest achievements will surely be his work with my
colleague from Virginia, a former highly decorated marine, Senator Jim
Webb, who also served in Vietnam. The two of them started a very tough
assignment, and that was to rewrite the existing G.I. bill. And along
the way, two ``old-timers,'' both World War II veterans--Senator
Lautenberg and I--enlisted in their ranks as cosponsors.
Our goal was to try and give to today's generation of men and women
in uniform a level and diversity of benefits that approaches what the
World War II generation received from a grateful nation at the
conclusion of that conflict. The G.I. bill at that time enabled any
soldier, sailor or airman--and there were up to 16 million who served
in World War II--to go to almost any university or college of his or
her choice, and the funds were nearly sufficient to fund the costs for
tuition, room and board, and school books.
But through the ensuing years, the successive G.I. bills were not
quite as fulsome; they did not keep pace with the rising cost of
education. Prior to the Webb bill, today's generation was barely able
to get enough funds to attend educational institutions in their home
States, let alone some of America's better-known educational
institutions. This bill recognizes the great contributions of our
military men and women and increases significantly the G.I. bill
benefits. It will make a great difference in the lives of so many of
this generation, a generation that I believe is in every way equal to
the ``Greatest Generation'' of World War II, for it faces even greater
challenges as the uncertainty of threats and the advance of complexity
of weapons face them today in a growing number of places worldwide.
I so admire this strong American, Chuck Hagel, who symbolizes ``duty,
honor, country.''
In public service, his compass is precise; for he always follows the
needle as it points to what course of action is ``best for America.''
wayne allard
I turn now to Senator Wayne Allard, with whom I have been privileged
to serve on the Armed Services Committee, who told his fellow
Coloradoans that if they chose him as their senator, he would only
serve 2 terms. He kept his word, just as he has honorably kept his word
to his constituents on many issues. I admire this senator and how well
he has served his state.
This veterinarian and small-business owner has been a forceful
advocate for military preparedness, for increased access to health care
and for cutting spending, leading by example by often returning some of
his own office's funds to the U.S. Treasury. In a sense, he sent them
back to his constituents.
He was also willing to roll up his sleeves and take on the tough task
of overseeing the construction and budgeting, along with other senators
and
[[Page 23526]]
members of the House of Representatives, on the new Capitol Visitors
Center. I might add, as a footnote, that when I was chairman of the
Rules Committee, I co-sponsored some of the earliest pieces of
legislation to provide for this center. Senator Allard can be proud of
his efforts, which will serve present and future Americans who travel
from afar to their nation's capital to learn about their government,
the longest-surviving democratic republic in world history.
I vividly recall journeying to Colorado, home State of one of my
children, to travel through a magnificent area of the State with his
lovely wife and children on behalf of his campaign to get elected to
the U.S. Senate. Those trips are memories I have and will keep safely
tucked away.
I am proud to say I have come to know each of these fine men. And I
firmly believe that this is but yet another beginning in all of our
lives, for, to quote Churchill again, ``the chain of destiny can only
be grasped one link at a time.''
I yield the floor.
Mr. FEINGOLD. Mr. President, our relationship with India is very
important and I fully support developing closer strategic ties with
India. I had the opportunity to visit India earlier this year, and I
returned with a renewed appreciation of the vital relationship between
our two countries.
One of the topics I discussed with senior Indian government officials
was the proposed U.S.-India civil nuclear cooperation agreement that we
are considering today. This agreement does a great deal more than bring
our two countries closer; it dramatically shifts 30 years of
nonproliferation policy and seriously undermines our efforts to limit
the spread of nuclear weapons. If we pass this legislation today, we
will be making America--and the world--less safe.
The cornerstone of the nuclear nonproliferation regime, the Nuclear
Non-Proliferation Treaty, NPT, is based on the central premise that
non-nuclear weapons states agree not to try to acquire nuclear weapons
in exchange for cooperation on peaceful civilian nuclear energy
programs. India chose not to take part in this grand bargain and
instead decided to become a nuclear weapons state. That is India's
sovereign right. But it is our sovereign right--and our longstanding
policy--to not cooperate with any state that chooses to acquire nuclear
weapons.
In fact, signatories to the NPT--including the United States--are
specifically prohibited from assisting, encouraging, or inducing any
nonsignatory to develop nuclear weapons. And yet it has been made clear
by numerous experts and even by officials of this administration that
this agreement could allow India to expand its weapons program by
freeing up domestically produced nuclear materials.
If the Senate passes this bill, we will be undermining the Nuclear
Non-Proliferation Treaty, the international nonproliferation regime,
and U.S. national security. This agreement could fuel an arms race that
would have direct implications for regional stability--a particularly
worrisome outcome given the history of turbulence in the region. Given
the gravity of this issue, I am extremely disappointed that the
Congress is rushing consideration of the agreement--without time to
consider the most relevant intelligence, without testimony from
independent experts, and quite likely in violation of the Hyde Act.
As a member of the Senate Foreign Relations and Intelligence
Committees, I have had a chance to study this issue closely. Over the
past 2 years, I have spoken with a range of individuals from all sides:
senior Bush administration officials, business groups, nonproliferation
and arms control experts, senior Indian officials, and concerned
constituents in my home state of Wisconsin. I have also reviewed the
supporting classified documents--something I hope all my colleagues
have also done. After reviewing those documents, I remain deeply
concerned about how this agreement will impact our national security.
I laid my concerns last Congress when we first considered this issue.
Since then, little has been done to address my core concerns. The
threat of nuclear weapons to the United States, and the spread of these
weapons and the material needed to make them, are among the gravest
dangers that our country faces. By passing this legislation, we are
weakening, not strengthening the international regime created to
monitor and restrict their proliferation. The United States, as a
signatory to the Nuclear Non-proliferation Treaty, should be working to
strengthen the international treaties and regimes that have been
designed to prevent the spread of nuclear weapons. By passing this
agreement in its current format we are doing exactly the opposite.
This deal will not only undermine the nonproliferation regime, but it
may also indirectly benefit India's weapons program. Two weeks ago, at
a Senate Foreign Relations Committee hearing, Secretary Burns
acknowledged that there can be no way to guarantee that cooperating
with India's civilian energy program will not indirectly benefit its
weapons program. And yet despite this frank response, supporters of
this bill are determined to rush it though Congress. I am concerned
that Pakistan could feel the need to respond to India's enhanced
capacity by increasing its own production of nuclear materials, setting
off an arms race in South Asia. Besides regional instability, there is
another danger to increased Pakistani nuclear stockpiles: the risk that
al-Qaida could obtain such weapons. This threat is real and should not
be ignored.
In addition to these serious national security concerns, there are
legitimate procedural ones. This bill appears not to meet the
requirements of the legislation Congress overwhelmingly adopted to
authorize the agreement, the Hyde Act. I opposed the Hyde Act because I
didn't think it went far enough--now it turns out the administration
does not even feel bound by it. To give just one example, the Hyde Act
required that any technologies or materials transferred pursuant to
this agreement must be maintained under safeguards forever. Indian
officials have balked at this requirement and indicated that they would
take materials out of safeguards if their fuel supply was interrupted.
That means that if India tests a nuclear device and we cut off future
trade, India could turn around and use all of the reactors and fuel we
have provided for its weapons program, just as it did in 1974. The Bush
administration couldn't be troubled to even get a promise from India
that it would honor the safeguards and this legislation does nothing to
address this problem.
In late August the 45 members of the Nuclear Suppliers Group, NSG,
met in Vienna to discuss whether they should overturn 30 years of
precedent and open up nuclear trade with India despite the lack of
comprehensive safeguards on India's nuclear facilities. While some NSG
members attempted to reduce the negative impact this change will
inevitably have on our ability to prevent the spread of sensitive
nuclear materials, in the end they were unsuccessful. In the face of
the Bush administration's significant pressure for a ``clean''
exemption, there wasn't much they could do.
This undertaking by the Bush administration is particularly troubling
in light of the recent report by the Institute for Science and
International Security, ISIS, which indicates that the U.S. Government
has not devoted sufficient attention to ensuring that India adequately
protects sensitive nuclear and nuclear-related information. If this
report is even partially accurate, we should all be gravely concerned.
Thanks to our efforts, India is now eligible to buy advanced enrichment
and reprocessing technologies. If these technologies are ever leaked,
our ability to prevent acts of nuclear terrorism could be greatly
diminished.
With everything else going on right now it is clear there has not
been adequate time to review the agreement and its supporting
documents. Instead, we are ramming this through Congress so we can hand
the Bush administration a victory--regardless of the threat it poses to
our national security.
Many of my colleagues have said that this agreement will bring India
into the mainstream but that appears to be
[[Page 23527]]
wishful thinking. Why should India sign the Comprehensive Test Ban
Treaty or stop producing weapons grade material if it now has access to
all the technology and know-how it could need? India can now enjoy
almost all the benefits afforded under the NPT, regardless of the fact
that it is still not a signatory.
Proponents of nuclear trade argue that because certain Indian
facilities will be placed under safeguards, this agreement will inhibit
proliferation. This is not true. The purpose of safeguards is to
prevent the diversion of nuclear materials to weapons programs. By
providing India new reactors and materials, this agreement frees up
domestic resources for India's weapons program. Rather than bringing
India into the ``nuclear mainstream,'' this deal could enable the
expansion of its weapons program.
I am pleased to cosponsor the Dorgan-Bingaman amendment that would
ensure that the United States cuts off trade with India in the wake of
nuclear tests and that we sanction any other nation that continues such
trade. I hope the Senate will adopt it, and I applaud the efforts of my
colleagues to improve this bill. I offered an amendment in committee
that would have helped close the loophole in the nonproliferation
regime created by the NSG exemption, and I was disappointed that this
amendment was defeated. However, after careful review, I have come to
the conclusion that even if all of these improvements were adopted,
this deal would be fatally flawed.
Passing this bill will undermine international nonproliferation
standards, potentially encourage a disastrous regional arms race and
threaten our country's security. I intend to vote against this
agreement and urge my colleagues to do the same.
Mrs. FEINSTEIN. Mr. President, I rise today to express my support for
the legislation approving the United States--India Nuclear Cooperation
Agreement.
While I have concerns about this agreement's impact on the nuclear
nonproliferation regime and the speed with which it has come to the
floor for a vote, I have come to the conclusion that it is in the best
interests of the United States and our relationship with India and,
with vigorous oversight, will help strengthen our nuclear
nonproliferation efforts.
This agreement has wide bipartisan support. The Senate Foreign
Relations Committee reported this legislation favorably on a 19-2 vote.
Last Saturday, the House approved this agreement by a vote of 298 to
117 and I am hopeful the Senate will follow suit tonight.
While far from perfect, I believe this agreement will mark a first
step towards bringing India into the nuclear nonproliferation regime.
For years, India and the United States have failed to take advantage
of our shared values of democracy, human rights, and the rule of law in
developing a closer partnership.
I am hopeful this agreement will serve as a catalyst for solidifying
relations with the world's largest democracy in a critical part of the
world and enhance U.S.-India cooperation on a number of pressing
issues: global warming, the war on terror, and stability in South Asia.
I do not take this vote lightly. As a U.S. Senator, I have worked
hard to stop the development of new nuclear weapons and strengthen our
nuclear nonproliferation efforts. I have introduced legislation calling
for a strengthened Nuclear Non-proliferation Treaty. I have fought
against the research and development of new nuclear weapons like the
robust nuclear Earth penetrator and the reliable replacement warhead
program. I have secured additional funding to remove vulnerable nuclear
materials around the world. I have supported efforts to accelerate
Nunn-Lugar threat reduction programs.
Because of my commitment to nuclear nonproliferation efforts, I
initially approached plans for a U.S.-India nuclear cooperation
agreement with some skepticism: 8 of India's 22 nuclear reactors--
including India's fast breeder reactors, which can produce massive
amounts of plutonium for nuclear weapon--will be classified for
military uses and thus will remain outside of International Atomic
Energy Agency safeguards. India will retain the right to designate
future nuclear reactors as ``military'' and not subject to
international safeguards. India will continue to manufacture fissile
material for nuclear weapons and has not signed the Comprehensive Test
Ban Treaty.
Nevertheless, I supported the Hyde Act of 2006 which authorized the
President to conclude a nuclear cooperation agreement with India
because it included provisions which would help preserve the nuclear
nonproliferation regime.
Under the terms of that bill any nuclear cooperation agreement will
be terminated if India conducts a nuclear test, proliferates nuclear
weapons or nuclear materials, or breaks its commitments to the
International Atomic Energy Agency; the President must determine that
India is meeting its nonproliferation commitments; the Nuclear
Suppliers Group must decide by consensus and according to its rules to
open nuclear trade with India; the export of any equipment, materials,
or technology related to the enrichment of uranium, the reprocessing of
spent nuclear fuel, or the production of heavy water is prohibited; the
President must create a program to monitor the end use of items
exported to India to ensure that they are not diverted to nonpeaceful
activities; and no action may be taken to violate U.S. obligations
under the Nuclear Non-Proliferation Treaty.
The question now before us is whether the agreement negotiated by the
Bush administration conforms with the Hyde Act and U.S. nuclear
nonproliferation efforts.
I understand the serious questions that have been raised by many
nuclear nonproliferation experts and my colleagues about critical parts
of this agreement. By opening trade in civil nuclear fuel and
technologies, will this agreement indirectly benefit India's nuclear
weapons program by freeing up domestic resources for military purposes?
Does India agree with the administration that, under U.S. law, if India
breaks its moratorium and tests a nuclear weapon U.S. nuclear trade
will be terminated? Will our partners in the Nuclear Suppliers Group
follow suit? Why has India not filed a declaration with the
International Atomic Energy Agency of its civil nuclear facilities that
will be subject to international safeguards as required by the Hyde
Act? Why did the exemption for India approved by the Nuclear Suppliers
Group not include guidelines baring transfer of sensitive nuclear
technologies to states, like India, who have not signed the Nuclear
Non-Proliferation Treaty?
I believe the legislation now before us addresses many of these
concerns. It requires the President to certify that the agreement is
consistent with our obligations as a party to the Nuclear Non-
Proliferation Treaty and will not help India acquire or build nuclear
weapons; states that it is the policy of the United States that, in the
event nuclear trade between India and the United States is suspended,
such as following a Indian nuclear test, the United States will work to
prevent the transfer of nuclear technologies and materials from other
members of the Nuclear Suppliers Group or any other source. It also
requires the President to certify that the safeguards agreement between
India and the International Atomic Energy Agency has come into force
and India has filed a declaration of its civil nuclear facilities that
will be subject to those safeguards before nuclear trade can begin. It
also requires the President to certify that it is the policy of the
United States to work with the other members of the Nuclear Suppliers
Group to restrict the transfer of sensitive nuclear technologies
relating to the enrichment of uranium and reprocessing of spent nuclear
fuel.
And while I appreciate the assurances from the administration that,
in accordance with U.S. law, nuclear trade with India would cease in
the event a nuclear test, I will support an amendment by Senator Dorgan
and Senator Bingaman to make this action clear.
[[Page 23528]]
As I indicated before, I would have preferred more time to debate
this critical agreement. Yet I am also conscious of the fact that if we
had used the full 30 days to consider this agreement, we would be
presented with a simple up or down vote on a one sentence resolution
approving the agreement.
I appreciate the fact that we have the opportunity with this
legislation to lock in additional requirements and oversight of U.S.-
Indian nuclear trade.
U.S.-Indian relations have come a long ways since the days of the
Cold War. We have overcome distrust and skepticism and have begun to
build a fruitful, mutually beneficial relationship between the world's
largest democracy and the world's oldest democracy.
Whatever the problems we will face in the global arena in the next
century, we will need to work with India.
By approving this legislation, we will not only open the door to the
trade in nuclear materials and nuclear technology--and provide new
opportunities for U.S. businesses--we will open the door to closer
cooperation on issues vital to U.S. national security interests in
South Asia and around the world.
This is not the end of our efforts to bring India into the nuclear
nonproliferation mainstream. This is one step that should be followed
by close congressional oversight and robust and sustained American
diplomacy.
I urge my colleagues to support the bill.
Mr. AKAKA. Mr. President, I rise to express my opposition to the
United States-India agreement on nuclear energy.
The agreement states it is intended for cooperation on the peaceful
uses of nuclear energy and for other purposes. It is the phrase ``for
other purposes'' that is most troubling. As I have seen over the years,
it is always prudent that one requests all of the specific details of
any agreement before approving such a deal. And the details of this
agreement are most disturbing.
If you agree with me that the proliferation of weapons of mass
destruction is one of the greatest threats to humanity's continued
existence then you should agree that preventing proliferation should be
one of the cornerstones of our foreign and national security policy.
Thus, there are only two reasons to support this agreement: first, it
would enhance our international efforts to prevent proliferation, and
second, it would prevent further testing of nuclear weapons on the
South Asian subcontinent.
Unfortunately, this agreement does neither. Instead it enhances the
risk of proliferation and ensures additional testing of nuclear weapons
in South Asia.
This agreement undermines the Nuclear Non-Proliferation Treaty, NPT,
and other agreements that have been essential to our efforts for
decades to prevent states from developing nuclear weapons. India is one
of three states that has never signed the NPT, nor has it signed the
Comprehensive Test Ban Treaty, CTBT. Nothing in this agreement requires
India to do either. In effect, India will gain all the rights of a
nuclear state and bear none of the responsibilities. Nothing in this
agreement requires India to commit to eventual disarmament--an
objective that even the United States, as a treaty signatory, accepts.
It is possible to conceive of an end-state in which the United States
and Russia disarm, but, in the case of India, there is nothing in this
agreement that requires India to do so. This agreement would allow
India to maintain a nuclear arsenal in perpetuity.
As of today, the United States is a signatory to the CTBT--although
the Senate has not yet ratified the treaty--but India is not. The
United States has agreed to greater safeguards and constraints on its
nuclear weapons program than has India. This is an extraordinary
exception that the Senate is being asked to accept.
Equally important, this agreement undermines our efforts to contain
the spread of nuclear weapons to countries of concern. Right now those
countries are North Korea and Iran. We do not know what adversaries
tomorrow will bring. Even so, our concerns over the Iranian and North
Korean clandestine nuclear programs are sufficient to warrant
disapproving this exception for India's clandestine program. When the
United States is trying to encourage Iran and North Korea to scale down
and eliminate their nuclear weapons programs, to enter into a
cooperation agreement with India for nuclear energy purposes would be
sending the wrong message.
I wish to remind my colleagues that the United States has been
arguing that the International Atomic Energy Agency, IAEA, and the
United Nations Security Council should impose stiffer sanctions on Iran
and North Korea. In addition, pending before the Senate is H.R. 7112,
the Comprehensive Iran Sanctions, Accountability, and Divestment Act of
2008. This bill would place new sanctions on Iran. I support such
sanctions, and I support similar efforts to establish accountability to
the India program.
Another added concern is that India might support Iran's secret
weapons program. Already a number of companies in India have been
sanctioned under U.S. export control law for providing sensitive
missile technologies to Iran. India's export control regime remains
deeply flawed. We have a history of this administration not disclosing
intelligence information that is derogatory to their argument. In the
case of India, the administration did not report export control
violations of Indian companies until critical votes had occurred in the
House.
What assurances have we received from the administration that they
are not withholding critical information at this time from the
Congress? The Senate has received a classified annex to the public
Nuclear Proliferation Assessment Statement, NPAS, but I would ask, is
that document complete? Does it address all the critical questions? I
would suggest to my colleagues that, until there is certainty that all
the answers to these serious questions are satisfactory; it is better
to vote no on this agreement.
Nothing in this agreement would prevent India from further testing of
nuclear weapons. Some would argue that it makes it certain that India
will continue testing, and, under this legislation, India can continue
to receive nuclear materials from other countries even if the United
States were to suspend any that it is providing. I believe that it is
unlikely that the United States will find much of a new market for its
nuclear products should this agreement be approved. India has a history
of trading with Russia, France, and others in this area, and trade with
these countries will, in the estimation of many experts, prosper.
As Michael Krepon, a noted analyst of the Pakistani and Indian
nuclear programs, has observed, ``The upgrading of New Delhi's nuclear
forces will most certainly require more nuclear testing.'' In the case
of a test, I believe that India will argue that it was forced to in
order to ensure the safety of its nuclear arsenal and India's nuclear
trading partners will argue against sanctions in the name of preserving
what few Indian nuclear facilities remain under IAEA safeguards.
India officials have made it abundantly clear that they maintain the
right to test. India's Prime Minister, Dr. Manmohan Singh, said, ``Let
me hence reiterate once again that a decision to undertake a future
nuclear test would be our sovereign decision, one that rests solely
with our government.'' He noted ``We want to keep the option [of
conducting further nuclear tests] open if the situation demands. If the
international situation requires, we may have to [conduct nuclear
tests].'' M.K. Narayanan, a member of India's Atomic Energy Commission,
observed that ``This deal deals primarily with civil nuclear
cooperation. There is no reference here to the event of a test. If
there is a test, we come to that later on.''
If India does test, Pakistan may retaliate. As Pakistan has already
indicated, it would match India step by nuclear step. In April 2006,
Pakistan's National Command Authority stated: ``In view of the fact the
[U.S.-India] agreement would enable India to produce a significant
quantity of fissile material
[[Page 23529]]
and nuclear weapons from unsafeguarded nuclear reactors, the NCA
expressed firm resolve that our credible minimum deterrence
requirements will be met.'' There is already a nuclear and missile
weapons race in South Asia. This agreement will only accelerate it, and
nuclear tests will fan the flames even hotter. Is this prospect in the
interest of the United States? Has a National Intelligence Estimate
concluded that such a scenario would enhance our national security?
I return to the questions I posed at the beginning of my statement:
does this agreement enhance our international efforts to prevent
proliferation, and secondly, will it prevent the further testing of
nuclear weapons on the South Asian subcontinent? The answer in both
instances is a resounding no, and I urge my colleagues to oppose this
legislation.
Mr. REID. Mr. President, I appreciate the opportunity to speak in
support of H.R. 7081, the United States-India Nuclear Cooperation
Approval and Nonproliferation Enhancement Act.
I had the privilege to be serving as the Democratic leader in the
U.S. Senate in late 2006 when, on an overwhelmingly bipartisan basis,
we passed the Henry J. Hyde United States and India Nuclear Cooperation
Promotion Act, which laid out the specific steps that needed to be
taken in order for our country to achieve a civilian nuclear agreement
with the nation of India. At the time, I felt it was important for the
Congress to pass the Hyde Act as a critical step in further
strengthening the growing political, economic, and security partnership
between the United States and India. Today, 2 years later, the Indian
government has acted to meet the guidelines set forth in that piece of
legislation, allowing us to consider H.R. 7081.
After our two countries reached a consensus on the text of the
nuclear cooperation pact this past July, Indian Prime Minister Manmohan
Singh faced a tough domestic battle to approve the agreement. However,
his government worked diligently to form a coalition of supporters for
the nuclear deal, and it eventually passed the Indian Parliament. On
Saturday, in the House, Democrats and Republicans approved H.R. 7081 by
a landslide: 298 to 117. Now, we are here today to take the next step
in approving this agreement and sending it to the President.
As I did back in late 2006, I would like to remind my fellow Senators
how important it is that we approve this measure to expand civilian
nuclear cooperation with India. For much of the cold war, America's
relationship with India--a leader in the movement of nonaligned
countries--was too often characterized by ambivalence on both sides.
But in the nearly 20 years since the walls that separated East from
West have come down, our two countries have enjoyed an unprecedented
level of engagement with one another that has proven truly beneficial
for both parties. And the citizens of our two countries are
increasingly interconnected through business, educational, and social
linkages.
India has emerged as one of the world's most important leaders of the
21st century. India has experienced significant growth in the
technological and service sectors, foreign investment has ballooned,
and India has become a global center for cultural and artistic
expression. The entrepreneurial spirit of the Indian people, coupled
with their strong commitment to democratic values, has formed the
backbone of a society whose potential for growth knows few boundaries.
By voting for this agreement, the Senate will cement the gains that
we have achieved in our bilateral relationship and open two of the
world's top scientific communities to the type of civilian nuclear
cooperation befitting our strong alliance.
I would like to thank my colleagues on the Senate Foreign Relations
Committee who, in conjunction with the Department of State, took the
time to examine this agreement over the past 2 weeks. I am equally
grateful to Senators Dorgan and Bingaman for their willingness to work
with the Senate leadership on this important bill. As these two
Senators, and others, have pointed out, we cannot undermine the nuclear
nonproliferation regime's decades of successes, and I appreciate the
goals of the Dorgan-Bingaman amendment to ensure the strength of our
continued commitments to the nonproliferation regime. I certainly
understand the concerns expressed in their amendment, but I believe
that this historic agreement provides the necessary safeguards and
oversight to ensure that our nonproliferation objectives will be
respected.
I also am heartened by the repeated public and private commitments by
officials of the U.S. Government to upholding nonproliferation. Because
of Senator Dorgan and Bingaman's work, the Secretary of State stated in
a letter to me today, which has been entered into the record, a clear
commitment in the event of a nuclear test. Secretary Rice's letter
states: ``We've been very clear with the Indians . . . should India
test, as it has agreed not to do, or should India in any way violate
the IAEA safeguard[s] agreements to which it would be adhering, the
deal, from our point of view, would at that point be off.'' With this
commitment in hand, I am reluctant to vote for an amendment that I feel
might jeopardize the important progress we have made over the past few
years in securing this deal with the Government of India. The strong
and growing partnership between India and the United States must move
forward, and I am proud that Senate passage of H.R. 7081 tonight will
further deepen this partnership.
In closing, I would like to remind my friends in the Chamber that the
United States is the proud home to a large and vibrant community of
Indian-Americans--my State of Nevada being no exception. America is a
country that was built on the strength of our immigrants, and the
contributions of the nearly 3 million Indian Americans currently living
in the United States have enriched our society immeasurably. We in the
Senate have a tremendous opportunity to show them our commitment to
improving relations with the country of their ancestry. With that, I
urge my colleagues to support this landmark agreement and vote to
expand civilian nuclear cooperation between our great country and the
world's largest democracy.
Mr. DOMENICI. Mr. President, India has over 1 billion people and a
rapidly growing economy. They recognize the need to provide electricity
that does not increase air pollution or greenhouse gases.
With this agreement we can help export U.S. technology and safeguards
to monitor and support India's inevitable nuclear expansion or ignore
India's growth as a nuclear power as we have for the past 30 years.
This agreement is good for the U.S. economy, good for international
nuclear safeguards, and good for the environment.
As a rapidly growing economy, India will see an increased need for
electricity over the coming decades. As India--and the world--seeks to
find ways to increase generation while reducing greenhouse gas
emissions, nuclear power will continue to grow. The civilian nuclear
agreement with India will allow us to help export U.S. technology to
monitor this expansion and will facilitate a global approach to the
challenges of climate change.
India is not a signatory to the Nuclear Non-Proliferation Treaty, yet
they have agreed to inspections by the International Atomic Energy
Agency.
This will improve our ability to monitor and protect against
proliferation of nuclear material.
India's growing civilian nuclear program will now be subject to
international inspections.
India would like to cooperate with the United States in developing
safer nuclear technology consistent with the administration's goals.
From a practical standpoint, this agreement will increase
inspections, verify compliance, and encourage cooperation on new
technology.
I would also point out that this agreement has the support of the
world's leading nonproliferation watchdog, Mohammed El Baradei,
Director General of the International Atomic Energy Agency.
[[Page 23530]]
He said, ``this agreement is an important step towards satisfying
India's growing need for energy. It would also bring India closer as an
important partner in the nonproliferation regime.'' He went on to say,
``It would be a step forward toward universalization of the
international safeguards regime.''
I am of the belief that we need to advance the goals of the Nuclear
Non-proliferation Treaty by opening up cooperation and transparency in
India. Under this agreement, the United States and India will expand
the use of safeguards on critical nuclear technology and processes in
that country--something that is beyond our reach today.
India has developed its nuclear program for the past three decades
and has not exported material or technology. However, there are strong
and powerful political forces within India that would like to disclose
less and make fewer sites subject to civilian inspection. This
agreement subjects most of India's reactors to civilian inspection,
including all of the breeder reactors. I believe if we reject this
package, it will be years before we are able to negotiate another deal,
and it is unlikely to provide as much openness and transparency as we
have today.
With regard to the amendment offered by Senators Dorgan and
Bingaman--two Members for whom I have enormous respect--I believe this
amendment is duplicative and would only serve to delay, if not derail,
this important agreement.
This administration has been very clear that India would face severe
consequences if they tested another nuclear device. Also, this language
duplicates the export controls and reporting requirements of Sections
103, 104 and 105 of the Hyde Act.
I do not believe this amendment will provide any additional
protection or controls that are not already in place today, so I must
recommend my colleagues oppose this amendment and adopt the India
civilian nuclear agreement without changes.
Mr. CORNYN. Mr. President, over the years it has become more and more
apparent that two great democracies, the United States and India, are
well suited for not only a partnership but also a friendship. Our
cooperation could mean not just increased economic opportunities for
both nations but also the opportunity for the United States and India
to join together to spread the fundamental principles of freedom,
democracy, tolerance, and the rule of law throughout the world.
As a founder and cochair of the Senate India Caucus, I have had the
privilege to work closely with Indian officials, Indian Americans, and
many other friends of India here in the United States to help promote
the already flourishing relationship between our two countries. There
is no clearer evidence of this great friendship than the revolutionary
civilian nuclear agreement before us, which the House recently passed
and we will vote on today.
This landmark agreement represents the latest example of the United
States and India, the world's largest democracy, working together on
issues of mutual benefit. It will bring about an unprecedented level of
cooperation between us, helping India to meet its growing energy
demands, while forging new economic opportunities for everyone
involved.
The initiative will serve both the interests of the United States and
the interests of India, with its more than 1 billion citizens. In light
of its track record as a responsible actor on nonproliferation issues,
India is an appropriate and worthy partner in this historic deal. The
agreement will pave the way for cooperative efforts in peaceful
civilian nuclear power, while simultaneously addressing concerns about
nuclear proliferation.
I understand well the need for careful monitoring to protect against
the proliferation of nuclear weapons, and I am pleased with the
safeguards contained in this agreement. But as the nation of India
continues to grow, their need for new, clean, and affordable energy
sources grows as well.
Helping India develop a safe and responsible nuclear industry will
give its people the resources they need to grow their economy and
strengthen their nation, while helping America's nuclear industry in
the process.
Most importantly, if we do nothing, the people of India will have no
option but to look elsewhere for nuclear assistance. That would be
unfortunate for both nations. We must remain a strong partner for
India, not just in the area of civil nuclear cooperation but also on
larger geopolitical matters.
If we approve this long-overdue agreement, we will send a strong
message that India and the United States stand together as friends to
face even the most difficult and pressing issues of our time. As we
look ahead to the future, each of our nations will do so with the
confidence that it has a friend, ready to work together.
Mr. BIDEN. Mr. President, I am very pleased that the Senate has the
opportunity to vote on the United States-India Nuclear Cooperation
Approval and Nonproliferation Enhancement Act and to finally approve
the peaceful nuclear cooperation agreement between the United States
and India. This bill will seize the opportunity to build on the
foundation laid by President Bill Clinton and cement a new, cooperative
relationship with India, the world's largest democracy.
Two years ago, Chairman Lugar and I worked with the administration to
enact legislation that changed 30 years of U.S. non-proliferation
policy. We agreed to let the administration negotiate and submit to
Congress a peaceful nuclear cooperation agreement with India, despite
the fact that India has a nuclear weapons program. That wasn't easy. It
took soul-searching and compromise on the part of many Members of the
Senate regarding the standards for such an agreement and for U.S.
policy.
Since the President's submittal of the proposed Agreement three weeks
ago, Senator Dodd and Senator Lugar have worked hard with the other
Members of the Foreign Relations Committee, the chairman of the Foreign
Affairs Committee of the House of Representatives Howard Berman, the
ranking Republican member of that committee, Ileana Ros-Lehtinen, and
with the administration, to forge a bipartisan compromise on this
important and complex issue. Senator Dodd and Senator Lugar especially
deserve a great deal of thanks for all the efforts that have been
required of them to bring this bill, and this historic agreement, to
this point.
Enactment of this bill will help the U.S.-India relationship grow,
while advancing India's ability to meet its energy needs in a way that
fits within the cooperation framework Congress has worked so hard to
establish. It will help ensure that the agreement and any exports that
flow from it will be consistent with U.S. law and our national security
interests, by adding to the tools that the Congress and future
administrations will have to keep watch over this agreement.
I look forward to the passage of this bill, its enactment into law,
and the beginning of a stronger relationship between our two great
democracies.
Mrs. BOXER. Mr. President, I rise today to express my opposition to
the United States-India Agreement for Cooperation on Peaceful Uses of
Nuclear Energy.
I do not feel any better about this agreement than I did when the
Senate passed the Hyde Act back in November 2006. At that time, I
strongly felt that the administration was giving up more than it was
getting in return, and that India was essentially being rewarded for
its continued failure to join the nonproliferation mainstream and sign
the Non-Proliferation Treaty.
Today, I remain particularly concerned about two factors--the
possibility that this deal will free up additional fissile material for
India's nuclear weapons program and India's continued military
cooperation with Iran.
While I am pleased that the Senate Foreign Relations Committee
included language in the legislation requiring the President to certify
that approving the agreement is consistent with our
[[Page 23531]]
obligation under the Nuclear Non-Proliferation Treaty not to assist or
encourage India to produce nuclear weapons I am afraid that this does
not go far enough.
Some experts believe that this deal could allow India to vastly
increase its production of nuclear weapons from an estimated 6 to 10
per year to several dozen a year, touching off an arms race in a region
that is already facing significant security challenges.
I simply do not understand how the United States could champion a
deal that rewards a country for producing nuclear weapons outside of
the NPT at the same time we are trying so hard to get Iran and North
Korea to give up their pursuit of illicit nuclear programs.
I also remain concerned about India's continued relationship with
Iran, including its military relationship.
In 2006, Defense News reported that Iranian warships visited a port
in the Indian city of Kochi to participate in a military training
program. In 2007--nearly a year later--Defense News again reported on
the military relationship between Iran and India, citing an agreement
between the two nations to form a joint defense working group.
This continued military-to-military cooperation is particularly
troublesome as Iran continues its reckless support of international
terrorism and continues to enrich uranium in defiance of the United
Nations Security Council--making the Middle East an infinitely more
dangerous place.
Furthermore, Iran has supported Shiite militias in Baghdad who have
in turn murdered American troops. It has also continued its support for
Hezbollah and Hamas, and Iran's President has denied the Holocaust and
threatened to ``wipe Israel off the map.''
Let me be clear--I value strong United States-India ties, and
appreciate that it is in the United States interest that these ties are
deepened.
But I regret that the Bush administration was unable to negotiate a
better deal with India. Unfortunately the deal now before us has
significant shortcomings that cannot be overlooked.
This is why I must vote against this bill today.
Mr. BYRD. Mr. President, I will vote against H.R. 7081, a bill to
approve the United States-India Agreement for Cooperation on Peaceful
Uses of Nuclear Energy. This agreement represents a major shift in U.S.
nonproliferation policy, with widespread ramifications for regional and
global security, yet it is being rushed through the Congress with
unseemly haste and reckless disregard for the deliberative process
outlined for such agreements in the 1954 Atomic Energy Act. There is no
need for this rush to judgment; far from it, the Senate and the Nation
would be better served, in my opinion, to put this off until the heat
and fury of the election season has passed and we can give this
agreement the prudent consideration that it merits.
The world recognizes India as an economic and a nuclear power. Its
growing economy, large population and soaring energy requirements make
nuclear power generation an attractive option. However, we cannot
address assistance for India's electrical power needs without also
considering that India is a military power with a sophisticated
technological base that includes the ability to build and launch
nuclear-capable intercontinental ballistic missiles and ballistic
missile defense systems.
India has conducted nuclear tests since 1974 and has been under a
global ban on trade in nuclear fuels and technology since that date. On
September 27, after the House of Representatives voted in favor of this
agreement, Indian Prime Minister Manmohan Singh addressed the Indian
community in New York with these words: ``India will be liberated from
the constraints of technology denial of 34 years. It will add an
important strategic pillar to our bilateral partnership. We will widen
our clean energy options.'' However, the Indian military and civilian
nuclear programs are closely intertwined, and this new agreement will
require new program separation measures that may prove difficult to
ensure or fully enforce. There is a real risk in that providing U.S.
technology and materials to the civilian side of that equation may
result in enhancements in India's military nuclear program.
If the Congress approves this agreement, we must be prepared for the
potential backlash of a nuclear arms race in the region. Pakistan,
which has long had border disputes with India, has threatened to match
any Indian nuclear capabilities. Pakistan has, like India,
clandestinely developed a nuclear weapon capability and has conducted
nuclear tests. Like India, Pakistan has not signed the Nuclear
Nonproliferation Treaty (NPT), the Comprehensive Test Ban Treaty, or
other nonproliferation agreements. But India will be rewarded for its
three decades of defiance of international nonproliferation accords
with access to nuclear technology and materials provided in this
agreement, and it will not, in return, give up one iota of its military
nuclear facilities or programs.
This agreement may have been a long time coming, but it is not yet
final. In 2006, the Congress rejected President Bush's original U.S.-
India nuclear cooperation agreement. Instead, the Congress adopted the
Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation
Act of 2006, which proposed several additional safeguards requirements
to the agreement. President Bush signed the act, but the agreement he
is now pushing so hard to get approved before he leaves office neither
meets all the requirements of the Hyde Act nor the procedures for
consideration of these agreements outlined in the Atomic Energy Act of
1954.
India has not yet filed its declaration of the facilities to be
safeguarded with the International Atomic Energy Agency. Nor has the
Indian government publicly acknowledged that the safeguards would last
``in perpetuity.'' There is no provision to terminate this agreement
immediately in the event that India conducts another nuclear test, as
it last did in 1998. Even though this is the first agreement of its
kind to require an exemption under the Atomic Energy Act, because India
is not a signatory to the Nuclear Nonproliferation Treaty, the Congress
is being pushed to override the statutory period for consideration of
the agreement.
At a time when the United States is strengthening its sanctions on
Iran to halt its uranium enrichment, India has joined in non-aligned
movement statements supporting Iran's nuclear position in its
negotiations with the West and is a major supplier of refined petroleum
products for Tehran. In addition, shortly after the House vote on the
Hyde Act in 2006, the State Department reported that Indian entities
were believed to have sold sensitive missile technologies to Iran.
According to those in the non-proliferation community, this agreement
creates a dangerous distinction between ``good'' proliferators and
``bad'' proliferators and sends misleading signals to the international
community with regard to Nuclear Nonproliferation Treaty norms, making
the task of winning international support to contain and constrain the
nuclear programs of North Korea, Iran, and potential proliferators more
difficult.
We need to let the process work. There is no rush. The Congress will
still be here come January. India will still be around come January.
The Indian government may even have filed its facilities declaration
with the International Atomic Energy Agency by January. Only President
Bush will be leaving in January, but, if this agreement is approved, I
can assure him that his Administration will get all due credit for
negotiating it. Let us take a step back from this mad rush we are in,
and do our job as the Founders intended, as a deliberative body, not a
rubber stamp.
The ACTING PRESIDENT pro tempore. The Senator from Connecticut.
Mr. DODD. Mr. President, momentarily we will be introducing a bill,
but my colleague from New York is here and wants to be heard. I just
wanted to take 30 seconds, if I could. We have wrapped up the debate on
the U.S.-India nuclear accord and there will be no more discussion I
know of about
[[Page 23532]]
that at this point. I will maybe insert some materials in the Record
but I did want to thank Senator Biden's staff and others. There is a
list which I will put in the Record, but Brian McKeon, Ed Levine,
Anthony Wier, Fulton Armstrong, and, from Senator Lugar's staff, Kenny
Myers and Tom Moore, just did a great job on this. I want my colleagues
to reflect the effort of staff who have worked for years on this. I
appreciate immensely their efforts. There will be a vote later this
evening on that matter.
I yield the floor to my colleagues whom I know want to address the
financial crisis issue or some other points. As soon as I have the
amended version of the bill, I will send it to the desk for their
consideration.
The ACTING PRESIDENT pro tempore. The Senator from New York is
recognized.
Mr. GREGG. Will the Senator from New York yield for a unanimous-
consent request?
Mrs. CLINTON. Yes.
Mr. GREGG. Mr. President, I ask unanimous consent that at the
conclusion of the statement of the Senator from New York, I be
recognized for 10 minutes, and then other Republicans speaking on the
rescue plan be allotted 10-minute segments from the Republican side.
Mr. DODD. Reserving the right to object, I am going to offer a
unanimous-consent request that covers that. I will have my colleague
look at it as well, so we may need some modification.
Mr. GREGG. I don't believe it covers the 10 minutes.
The ACTING PRESIDENT pro tempore. Is there objection? The Senator
from Montana is recognized.
Mr. BAUCUS. Mr. President, reserving the right to object, I would
like to be able to get in this line too, so I ask unanimous consent
that I speak following the Senator from New Hampshire.
The ACTING PRESIDENT pro tempore. Is there objection?.
Mr. DODD. Let me object to this particular request of my colleague,
and I will get back to it in a minute. I don't want to get to a
situation where there are limits without some consideration to make
sure there is a balance to it.
Mr. GREGG. Let's go forward with the Senator from New York.
Mr. DODD. Then the Senator from Montana.
____________________
FINANCIAL CRISIS
Mrs. CLINTON. Mr. President, I appreciate very much the extraordinary
work that has been done with respect to the rescue package, led in a
bipartisan fashion, which has certainly produced significant changes in
the original request that came to the Congress from the Treasury
Department. Tonight we will vote on legislation none of us wish we were
considering and none of us can afford to see fail.
The costs of inaction are far too great. We are already seeing the
consequences of a freezing credit market that will only worsen. I hear
across my State of New York that small businesses are struggling to
find affordable loans to keep their doors open and their inventories
stocked. Even larger businesses are being pushed to the breaking point.
Throughout the country, the impact of this credit crisis is beginning
to be felt with students who are seeing the sources of student loans
dry up, interest rates on car payments are rising, families who had
saved up and acted responsibly are seeing higher mortgage rates
shrinking their dream of home ownership.
Our economy runs on credit. Underlying that credit is trust. Both the
credit and the trust is running out. Essentially, what we are doing in
an intangible way is restoring trust and confidence, and in a very
tangible way helping to restore credit. Banks will refuse to lend to
businesses and even to one another; investors continue to withdraw to
the safest investments: Treasury bills, even cash. Tens of thousands of
jobs in New York have been lost. A study this morning projected that
New York alone would lose at least 120,000 jobs.
I think we are here in some respects because we failed to tackle a
home mortgage crisis. Now we are facing a market crisis. If we fail to
tackle the market crisis, we risk an even deeper economic crisis. I do
not think any of us want to see irresponsibility on Wall Street
compounded by ineffectiveness in Washington.
That is why we must act, even as we do so with regret and
reservations, because we have little choice. The proposal we are
considering is far from perfect, but it is a far cry from the original
plan sent over by the Treasury Department that instilled virtually
unlimited powers in the hands of the Treasury Secretary. As I said when
we first examined that original three-page proposal, we needed a plan
that included checks and balances, not a blank check.
Thanks to the leadership in the Senate and in the House, we have
negotiated through the Congress, on a bipartisan basis, a better
alternative that instills taxpayer protections, asserts oversight, and
maintains greater accountability.
As is the case very often in effective compromises, no one is happy.
But we cannot let the perfect be the enemy of the good--or in this
case, the enemy of what is necessary. But as we vote for this proposal
tonight, we must do so considering what steps we will take next.
On the floor at this moment are three of the leaders who shaped this
plan under the very able leadership of Chairman Dodd, and the chief
Republican negotiator, Senator Gregg, and, of course, the chairman of
the Finance Committee, Chairman Baucus. But I think we all recognize
this is not the end but the beginning of what we must do. I believe
there are three big goals we will have to address even after we pass
the rescue package tonight in the Senate and send it over to the House.
First, we must address the home mortgage crisis. For 2 years, I and
others have called for action as wave after wave of defaults and
foreclosures crashed against communities and the broader economy. We
are not yet through the woods. Millions of mortgages are underwater or
under the specter of adjustable rates set to rise.
I am proposing what we are calling the Home Owners Mortgage
Enterprise, an acronym obviously spelling ``home,'' to rewrite
mortgages and homes so that creditworthy, responsible families can keep
their homes and keep making affordable payments. Through such a HOME
program we would also be able to consider freezing adjustable mortgage
rates and even placing a short-term moratorium on foreclosures.
When our country enacted a similar program in the Great Depression,
we saved 1 million homes without costing the taxpayers a dime. In fact,
the program ended with a surplus. Only by rewriting the terms of the
debt held by families whose mortgages can be salvaged will we recoup a
great deal of the value of the debt we are purchasing from Wall Street
firms.
I also believe we need to consider a real tax credit for home buyers
to jump-start the housing market. This has been an effective tool in
the past, and it can be an effective tool again. We have too much
supply and too little demand. Getting the liquidity that will be
injected into the credit markets to work its way through the entire
economy will take time. I think we need not only a supply of liquidity
but an increasing demand, particularly in the housing market.
Second, we must be vigilant on behalf of taxpayers, putting in place
safeguards so the Treasury is maximizing the value of the assets
purchased with taxpayer dollars.
We need to have the flexibility to ensure we are not just subsidizing
investors and executives, but we should tie this debt relief to strong
recapitalization requirements and greater accountability.
I also want to be sure that companies do not take undue advantage of
this program and sell securities to the Treasury with one stroke of the
pen and claim a deduction for the losses on those assets--in essence,
double dipping, dumping their bad assets on taxpayers and getting a tax
break as well.
I am proposing we build on a very creative provision in the bill
before us and establish an e-TRUST program.
[[Page 23533]]
That will stand for Transparent Rules Used to Safeguard Taxpayers. In
the bill there is a provision that transactions be put on the Internet.
I wish to ensure that the assets bought and sold by the Treasury
Department are reported online in real time so any American can log on
and see how their tax dollars are being spent. All assets bought and
sold must be available on a publicly accessible Web site that discloses
the buyers, sellers, and values of these assets. The American people
are buying these securities, and so the American people must have easy
access to their portfolio.
It is also important to the American people to understand that lying
behind these complex transactions with all kinds of long names that you
read in the newspaper--collateralized debt obligations and credit
default swaps and all the other words that are used to in some way
explain the complex financial transactions that brought us to this
place--are real assets. There are real homes owned by real people on
real land in real communities across America.
So we want to know how those securities that stand in for these real
assets are being traded, bought and sold, and we want to be sure we
realize for the taxpayer the benefits of these transactions.
Third, I think there is general agreement we must pursue a broader
reform. That is one of the lessons of this turmoil. I know Chairman
Dodd and others will be holding hearings to try to untangle how we got
to where we are. We know we have to rein in executive compensation by
giving shareholders a greater role in and eliminating loopholes that
allow boards to conceal the value of salary packages. We have to end
the quarter-by-quarter mentality in which long term prosperity is
subverted by short-term stock valuations. Obviously, we have to end the
culture of recklessness in our financial markets endorsed by an
ideology of indifference in Washington.
If the American people invest in these companies, I think we should
ask the companies to invest in the American people. I think we should
consider requiring financial institutions participating in this
Treasury plan to create an American priorities fund, to be part of
their portfolio, to invest in clean energy, infrastructure, mass
transit, manufacturing, education and other public goods and goals that
would be well served by greater private investment.
Along with the rescue package will be a number of tax credits that
will be passed by the Senate tonight. Again, Chairman Baucus has done
yeoman's work getting these tax credits put together. The Senate
supported them before. In it is a fix for the alternative minimum tax
and an energy production tax credit.
In fact, we will be stimulating the economy for Main Street while we
pass this rescue package for our credit markets. I think that is the
right combination. But we need to do more. Instead of toxic securities
that nobody can understand, are so complex and lack all transparency
and accountability, banks should be investing in clean energy
facilities in Buffalo or new auto manufacturing plants in Detroit to
build more fuel-efficient cars.
We should be repairing our bridges, our roads, our tunnels. We should
be investing in high-speed rail and making sure Amtrak is not a second-
class railroad but competes with the best anywhere in the world.
I think the agenda before the Congress is a very important one for
our country. We cannot continue to shuttle from crisis to crisis. This
is a sink or swim moment for our country. We cannot merely catch our
breath. We must swim for the shores and we must do so together, not
only as a united Congress but as a united country. There is so much
work to be done in America, so many investments that make us richer and
stronger and safer and smarter that will enable us to look in the eyes
of our children and grandchildren and tell them we are leaving our
country in as good, in fact, better shape than when we found it.
At this moment, we cannot say that. But I am absolutely sure, based
on the bipartisan cooperation we saw on this bill, in responding to a
real crisis, that we will see more of that in the months ahead.
Our new President will certainly demand it of us, but we should be
demanding it of ourselves and demonstrate to the American people that
the Congress will lead the way into a much more confident and
optimistic future for America.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Connecticut.
Mr. DODD. Mr. President, I wish to thank the Senator from New York.
She was eloquent and hit right on the exact theme. I think this is a
sad moment in many ways but a moment we have to confront. As she so
aptly describes, it is our job now not just to deal with this crisis
but to put our country on a better footing. So I thank her for her
message and her words today.
Mr. GREGG. I ask unanimous consent that I be recognized for 10
minutes, and at the conclusion of my remarks, the Senator from Montana
be recognized.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. GREGG. I further ask unanimous consent that when we get into the
debate and the time has been divided, the Republican Members have 10
minutes to speak on the matter.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. GREGG. Mr. President, first, I wish to recognize and acknowledge
the Senator from Connecticut, the chairman of the Banking Committee,
for the tremendous work he has done over the past few days to bring
this piece of legislation to this point.
This is an emergency. This is a crisis. Those terms are often
overused. In this instance, they are not being overused. We know the
financial markets are under extreme duress. We have seen some of our
largest and most significant financial institutions fail or be
reorganized in the last few weeks.
We also know, regrettably, that the credit markets are basically
locked up and that credit on Main Street is disappearing, that people
are not able to get financing for the payrolls, financing for
inventory, financing to buy a car, send children to school, rebuild the
local hospital, rebuild the local school system. This is not a virtual
event, it is not an event of theory, this is a real event of very
severe economic consequences.
Action has to be taken. The chairman of the committee, working under
a bipartisan, bicameral format with the Secretary of Treasury, has come
up with this proposal to try to address this issue. Is this the answer
to the entire problem? Obviously not.
The way I describe this is we have a patient who has suffered a
severe wound and is bleeding profusely. We are going to try to put a
tourniquet on that patient so we can stabilize their condition, get
them to the hospital, and hopefully take other action which will cure
them and get them back on their feet, specifically get the economy back
on its feet, make sure Americans are able to go to work and enjoy a
prosperous lifestyle.
This proposal, as it came from the Treasury, was simple, with a
purpose of basically going forward with a significant amount of
taxpayers' dollars, $700 billion, taking those dollars and buying
investments. That is an important point to remember, because there has
been a lot of misrepresentation, regretably, demagoguery and hyperbole
about how we are throwing money at Wall Street. That is not the case.
What is happening is we will be purchasing assets, assets that have
value. The Federal taxpayer will own those assets. Down the road, we
will probably sell those assets, and we will actually get money back in
for the taxpayer, into the Federal Treasury. We may actually break
even, we may lose some money, but it is more likely, in my opinion,
that we will come close to breaking even, and we may actually, some
people tell us, make money for the taxpayer. But this is not $700
billion out the window.
In doing this effort, we are going to free up credit, credit on Main
Street, that makes it possible for people on Main Street to do what
they usually
[[Page 23534]]
do. America runs on readily available, reasonable, affordable credit.
Every American has credit on something: their credit card, their home,
their car, their kids going to school, the little company they work
for, if they work for a mom and pop, and even a middle-sized company
probably has credit to make their payroll, probably has credit to buy
the inventory. All this is necessary in order to keep the economy
going. Yet today we are seeing it dry up and we are seeing it freeze
up.
We are going to try to relieve that pressure so Main Street can
operate as it should. In addition to what the Treasury Secretary felt
he needed to free up that credit, we as a Congress felt we needed to do
some other things. We needed to protect the taxpayer, and we have done
that in this bill. Every dollar that comes into the Treasury as a
result of reselling these assets will go to reduce the Federal debt, it
will not go to create new programs, it will go to reduce the Federal
debt.
In addition, we wished to make sure nobody is going to game the
system, nobody is going to make a lot of money on this at the expense
of the taxpayer. So we have language in here that limits, and
eliminates in some instances, any sort of golden parachute, limits the
salaries of the heads, the CEOs of these major companies who may take
advantage of this, and basically eliminates, as a result of the efforts
of the Senator from Montana and his good ideas, eliminates the tax
deductions for high-income individuals above a reasonable amount.
In addition, as a result of the leadership of the chairman of the
committee, again, we focused a lot of attention on making sure we can
keep people in their homes. We do not want people foreclosed on, and
interestingly enough, as a result of the Federal Government buying
these assets, which we will be buying, which are mostly mortgages,
mortgage-backed securities, which we will be buying at 20 or 30 percent
below face value, we as a government are going to be in a position to
reorganize the mortgages of people who today cannot meet their payments
because they bought a subprime mortgage and, as a result, they could
not make the mortgage payments when the mortgage reset.
We are going to be able to adjust those mortgages. If a person lives
in their property as a personal residence, and if they have a
reasonable income, hopefully, we will be able to structure it so they
can stay in that property today, something they most likely would not
be able to do if the economy played out in the present scenario.
So we are going to keep people in their homes and protect their
opportunity to participate in a reasonable mortgage; at the same time,
maybe make money for the taxpayer, because once those mortgages start
to perform again, they become more valuable, and we can resell them
into the market.
Fourthly, we address the issue of oversight. We create massive
transparency so everybody is going to know what is happening. As was
mentioned earlier by the Senator from New York, things will be going up
on the Internet, so people know what is happening, plus we have
significant oversight. We have a board headed by the Federal Reserve
Chairman to oversee the Treasury Secretary; we have a board for the
Congress to oversee the Treasury Secretary. We have a new inspector
general just for this issue, a new GAO initiative just for this issue.
There will be significant oversight so taxpayer dollars are watched
carefully so we know proper actions are being taken. We heard from our
colleagues in the House of Representatives that they had concerns in
the area of give us an option of an insurance program. So as the
negotiations went forward, we put in the option of an insurance
program.
We heard from colleagues on the Democratic side: Make sure the
taxpayers have an option, so if we do not recover all the money we put
in, if there is some shortfall, there is an ability to go back to these
financial institutions 4 or 5 years from now, when they are a little
stronger, and get a payment to cover that shortfall. That option is in
there.
Then, in addition, we have expanded the FDIC coverage with this bill
so people can have confidence in the money they are putting in their
savings accounts, in their checking accounts, in banks, is going to be
safe, and they do not have to move it around and maintain these
artificial caps in their accounts. So that step is forward.
This is a plan that addresses the needs of the Main Street America
through freeing up credit, but it also does it with a lot of efforts to
protect the taxpayer, protect the mortgagee, have the proper oversight,
and do it in a way that is constructive and, hopefully, returns revenue
to the Treasury rather than cost the Treasury revenue.
Is it the answer to the whole problem? No. Please do not assume that
after we pass this bill--and hopefully we will pass this bill--suddenly
the light is going to shine on the American economy. We are in for a
difficult economy for a considerable period of time. We know that.
Other institutions will be under significant pressure. Regrettably,
probably some of these institutions will not survive this economic
situation.
But the option of not doing anything at this time is to virtually
guarantee that we as economy will begin a very significant downturn of
disproportionate impact on people on Main Street. People will lose
their jobs, people will lose their savings, people will find that they
cannot get the credit necessary to keep their businesses open or to
function at a reasonable level.
There is no question that if we do not get the credit markets working
again, we will face a dramatic downturn of proportions which we have
not been seen in my lifetime in the United States of America and in our
economy
It is something we should not risk. We should not roll those dice.
This is a program which we can do. It may not cost taxpayers anything.
But if it does cost taxpayers something, it is not going to be a
dramatic amount of money. We can do it with proper safeguards, as we
have. As a result, it is an action we should take as a Congress, as
representatives of our citizenry, in order to fulfill our obligation to
make sure that when you see an impending crisis you know is going to
have a huge adverse effect on the people you represent, you move on
that crisis, you take action, and you try to revolve it.
That is what this proposal does. It is not the answer to all the
problems we have in this economy, but without it, we are going to have
a much more severe and difficult time.
I yield the floor.
The PRESIDING OFFICER (Mrs. McCaskill). The Senator from Connecticut.
Mr. DODD. Before yielding to Senator Baucus, I announce that I have a
number of Senators who I ask consent be recognized for 5 minutes:
Senators Baucus, Mikulski, Brown, Cantwell, Harkin, Conrad, Casey, Bill
Nelson, Reed, Durbin, Obama, Schumer, Boxer, Menendez, and Kerry.
The PRESIDING OFFICER. Is there objection?
Mr. BAUCUS. Madam President, reserving the right to object, I wonder
if I could amend that to 15 minutes.
Mr. DODD. Let's make it 12 minutes for my colleague from Montana.
Mr. BAUCUS. Given the gravity of this legislation, that time was a
little short.
The PRESIDING OFFICER. So amended. Without objection, it is so
ordered.
The Senator from Montana.
Mr. BAUCUS. Madam President, a cloud hangs over the American economy.
It is a cloud made up of thousands of failures, and it is casting a
shadow over our country. This cloud of failure is so vast that we have
a hard time seeing where it starts and where it ends. This cloud is so
thick, we cannot see all the dangers it hides. We cannot tell even if
there is light right on the other side. And this cloud is moving fast.
It is speedier and stormier than most of us have seen in our lifetimes.
This cloud over the American economy contains the failures of people
whom we trusted to make this country prosper. It holds the failures of
many national institutions, their failure to be prudent, to be honest.
This cloud is made up of the failures of the private and public
institutions that are supposed to safeguard our financial security.
Instead, they let it slip away.
[[Page 23535]]
Americans are frustrated by the negligence that let this cloud of
economic crisis take shape. This week, many Americans were angry that
the Government seemed at first to want to shelter Wall Street from the
rain but not America's working families. I share Americans' concerns. I
share Americans' frustrations. I share their anger.
I am pleased today because the Senate has heard America's voice. The
bill the Senate will consider today improves the Treasury Department's
original plan. We made it better. We made this bill work better for
working families who are already weathering financial storms and who
now face more rainy days because of Wall Street's greed.
The collapse of the financial markets does not sound like Main
Street's problem. Most Americans are too busy making ends meet to
figure out how frozen credit markets and a shortage of commercial paper
affect their lives.
To most Americans, banks not lending to other banks sounds like a
bank problem, not their problem. But these haywire markets are
everyone's problem, and here is why.
If a bank cannot get credit, neither can its customers. Its customers
are the local hardware store, the car dealership down the street. Its
customers are college-bound young people and the new neighbor who just
bought the house next door. These good people rely on their bank to pay
their invoices and make payroll on time. The funds they depend on are
also now beginning to dry up. For example, a Montana businessman called
me this week. His company has an $11 million outstanding loan, a 3-year
loan. He uses it to keep his business stocked with inventory. The bank
has called that loan in. That 3-year loan is now being called in. He
must pay it off, according to the bank, in the next 90 days--not 3
years, 90 days. The crisis is coming home for him now, that is for
sure, and that threatens other good people.
If the hardware store and the car dealership lose business, pretty
soon employees and suppliers get hurt. If a neighbor cannot get a
mortgage, painters, movers, and handymen will have one less paying job.
The young person who cannot afford college without a loan and the lady
hoping to rent out her basement apartment or the guy who sells school
books might come up a bit short. This financial crisis is closer to
home than we realize. It affects Americans who earn an honest living,
follow the rules, and work hard.
Honest Americans about to get hit harder by the financial storm are
the reason I worked to improve this plan. Working families are the
reason I insisted on tax relief for struggling homeowners who can't pay
the mortgage and can't afford a tax hit when their indebtedness is
forgiven. Working families are the reason I insisted on help for
hometown banks in Montana and elsewhere that suffered when stock prices
fell because of Wall Street's greed--not their fault at all, not the
bankers, the Main Street bankers in our States. Working families are
the reason we all insisted on finding a way to get back much of the
money spent on this plan.
The Treasury will buy assets with the money it spends. Later, the
Treasury can sell those assets or hold them to maturity. In either
case, there is a good chance the Treasury will get back some or all of
these dollars. When I say the Treasury, those are taxpayers' dollars.
This bill, therefore, gives American taxpayers a stake in the companies
they are helping and a share in their future profits. The American
taxpayer's pocket should be the last place companies look for a
bailout, but when these companies do ask for help, the American
taxpayer should be the first to benefit when the firms get back on
their feet. This bill makes sure of that.
Americans taxpayers are the reason I insisted on cutting paychecks
and closing golden parachutes of Wall Street executives. In just the
past 5 years, the five biggest Wall Street firms paid more than $3
billion to their top executives--5 years, five biggest firms, $3
billion to their top executives. That is not right. It is not right for
executives to get more big paychecks while their companies are getting
assistance from the Government. If companies ask for taxpayer help on
the one hand, they can't give out big executive bonuses with the other.
This bill limits compensation to executives with golden parachutes.
The Treasury will have to issue guidelines on cutting executive
compensation. The Treasury Secretary will have to say: You can't play
if you are going to overpay. These provisions are helpful, but we have
a lot more in this legislation, even more guidance given to the
Treasury Secretary on executive compensation.
I also developed some provisions to cut tax breaks companies get for
executive pay and to make sure executives pay tax on more of their
income than they do today. I don't want Main Street to subsidize
severance pay on Wall Street.
For taxpayers' sake, I also wrote a provision creating a special
watchdog to track and protect taxpayer dollars. I said that American
resources must be used wisely and efficiently. This bill includes my
proposal to create an independent inspector general to oversee this
effort, this effort and nothing else, solely designed for this problem.
I designed the office of this inspector general to be truly
independent, with the necessary resources to fight for every taxpayer
dollar. I designed this inspector general to be accountable only to
Congress and to the American taxpayer. It will be my personal mission
to make sure this watchdog does his or her job. I want this inspector
general on the ground in New York inside the firms that facilitate
Treasury auctions, watching every dollar that comes and goes. This
investigator will hear from the Finance Committee as we work to protect
the American people's interests in this effort.
Finally, America's working families are the reason I am so glad this
bill now includes tax relief. Last night, Senators Reid and McConnell
announced that this bill would include Senate-passed legislation--that
is, earlier passed--that will create and extend tax incentives for
renewable energy to protect 20 million Americans from paying what is
called the alternative minimum tax and also extend a number of vital
expiring tax credits for businesses and families. This is the right
call. Adding this tax relief will ensure that regular working Americans
get financial help in this time of crisis.
As soon as this legislation passes, good-paying jobs will open in
green energy, as wind and solar projects get up and running. Twenty
million Americans who can't afford a higher tax bill are protected from
the alternative minimum tax. Families will get a break on college
tuition, classroom expenses, and State and local sales taxes, and
companies will get tax relief to do research and development, to grow,
to offer even more good-paying jobs. Adding tax relief that creates
jobs, supports families, and secures a new energy future for the
country makes this bill a lot fairer for hard-working Americans.
A ``yes'' vote on the financial rescue plan is now a vote to rescue
America's working families from this financial crisis with the right
tax relief at just the right time. It is now time to act.
As a Senator, I was disturbed by this administration's attempt to
rush through a bill for business. But as an American, I am disgusted
also by the negligence and greed that got us into this mess. But at
this time of crisis, we must not let our anger paralyze us. So many
have failed to act responsibly. We must do better. We here in the
Senate cannot fail. Failure to act would make today's economic cloud
even bigger and more dangerous. Failure to act could unleash the
lightning bolts of recession and the downpour of unemployment. Failure
to act could turn this cloud into a storm that tears through our entire
economy.
The plan in front of us is not perfect. I wish we did a lot more
here. I wish we did not have to be where we are. I know many Americans
do not want it. But this is the best way to quickly disperse this
economic cloud and guard against a bigger storm. Like it or not, we
must have a plan big enough to counter our economic woes in a
systematic, comprehensive way.
I will vote for this legislation because America is under a cloud,
and we
[[Page 23536]]
cannot linger here. Congress must make sure this crisis does not get
worse. With the addition of significant tax relief to this legislation,
Congress can actually lift the cloud a bit. Tax relief will make things
a little better for Americans feeling financial hurt.
With this vote, Congress must also promise the American people that
this will never happen again. The lesson of the cloud must lead us to
build a strong financial framework that will not falter again. The
lesson of the cloud must lead us to seek a brighter future for every
American family that helps us to weather this storm.
I yield the floor.
Mr. ISAKSON. Will the Chair please notify me when 7 minutes has
expired?
The PRESIDING OFFICER. The Chair will notify the Senator.
Mr. ISAKSON. Madam President, I stand before you today and perhaps
later on this evening to cast what is without question the most
challenging vote and the most important vote I have been asked to cast
in 30 years as an elected official. I will vote in favor of the
economic stabilization bill because it does precisely one thing that we
can do to help unlock the credit markets and help the average working
Georgian, the average Georgia retiree, the average Georgia child who is
looking to the future, to benefit from what right now is a very
difficult situation.
I commend Senator Dodd for his leadership and Senator Gregg for his
leadership. They have expended countless dollars in terms of political
capital and countless hours to come up with a solution that works.
There are so many misunderstandings in the public about what this is
and what this isn't. So just for the few minutes I have, I wish to talk
about the core of it, why it is so important, why it makes sense, and
why in the end we as a country will not only benefit but, more likely
than not, we will profit from the investment our Treasury makes.
The core of this is the $700 billion authorization to buy mortgage-
backed securities that are on the books of banks, savings and loans,
insurance companies, and other entities in the United States.
The first misconception is that the money is going to Wall Street.
Wall Street is not being bailed out. Everybody has forgotten that
Lehman Brothers went broke. Merrill Lynch sold itself for 30 cents on
the dollar. Bear Stearns sold itself or merged for 10 cents on the
dollar. And AIG is paying the taxpayer 8.5 points over LIBOR to borrow
$84 billion to dissolve itself. Those are no bailouts. This money goes
to those who purchase the securities that were underwritten by Moody's
and Standard & Poor's as investment grade and hold them on their
balance sheets as an asset which is now valued virtually at zero.
As the Treasury comes in and Secretary Paulson buys these securities,
he will make a market in these securities. Once he makes a market,
there will be attraction of other investors to jump in for a very good
reason. I don't know what price they will establish, but say it is 50
cents, 60 cents or 70 cents on the dollar. A lot of people don't
realize that most of these securities, though some of them are in
trouble, are not in trouble to the extent of 20, 30, or 40 percent.
By way of example, the worst foreclosure rate in the United States is
the State of Nevada--19 percent. If you had a mortgage-backed security
that was 100 percent mortgages in the State of Nevada, then, with a 19-
percent foreclosure rate, if those foreclosures sold for nothing at
sale, then that bond would be worth 81 cents on the dollar at maturity.
If somebody paid 50, 60, or 70 percent for it, they would have an 11-,
21-, or 31-percent margin in that security. The power to hold it to its
maturity and the power to buy the security and make a market is what
makes this a genius proposal from the standpoint of getting to the
heart of the American problem.
Then what it does is it establishes three things. One, it establishes
a floor. I want to go back to what Senator Gregg said a few minutes
ago. Inaction on the part of the Congress this week on this plan will
continue a downward spiral that will accelerate, will deepen, and will
touch the life of every American citizen, and it will touch it and harm
it for a long period of time.
If we are able to pass it, and quickly go to the marketplace and
establish the market for these securities, we create a foundation from
which, over time, we can grow out of this. Americans' credit will be
back again, albeit much tighter than it has been before. And it should
be because we should have learned the lessons from some of the excesses
of lending operations before. But credit will return.
What will happen is people will continue to have their jobs. What
will happen is people who need to sell a house will now see that people
are coming back into the marketplace so they can sell it. All in all,
by loosening what is now a clogged credit system at mainstream banks
and savings and loans all over the United States of America, we will
return a sense of normality to the American economy. The failure of the
Congress to do that will establish a continued downward spiral that
will be a disastrous for the individual average American in whatever
State they live.
So for me this is a difficult vote because you never want to find
yourself in this situation. But tonight is not a night to say no to the
future of the American people. Tonight is not a night to say no, we do
not have a responsibility to help. Tonight is not a night to try to
find some philosophical way to figure out how somebody else ought to do
it.
It is on the shoulders of the Congress of the United States of
America. The people affected are our citizens, the people who have
voted for us and sent us here. It is absolutely critical we unclog the
financial markets, free up credit to the average American and, over
time, restore the American economy to what it has been and always will
be: the best entrepreneurial capitalistic system in the world. But
failure can sign an end to that very reputation this country so loves
and so deserves.
I yield back the remainder of my time.
The PRESIDING OFFICER. The Senator from Maryland is recognized.
Ms. MIKULSKI. Madam President, I believe I am part of the Democratic
queue. Therefore, I seek recognition to discuss the so-called rescue
plan.
The PRESIDING OFFICER. The Senator is recognized for up to 5 minutes.
Ms. MIKULSKI. Well, Madam President, I am here to talk about this
rescue plan. Regrettably, a rescue plan is needed because I am afraid
if we do not act today and we do not act with resolve, our economy
could come to a crashing halt. I am afraid of massive layoffs. I am
afraid of small businesses folding. I am worried that retirement and
pension funds could shrink. Therefore, I will vote for this bill, but
know that, like the taxpayers, who I know are angry and mad as hell, so
am I. We all agree that greed on Wall Street and lax regulatory
practices of this administration got us into this mess. Taxpayers who
played by the rules are asking tough questions. What are their
questions?
Barbara, what did you do to prevent us from getting into this? What
are you going to do to make sure it does not happen again? And what are
you going to do to make sure that heads roll?
Well, let me tell you this: Heart and soul, I am a regulator and a
reformer. Time and time again, we have seen the consequences of a lax
regulatory culture and very wimpy enforcement. Time and time again, I
voted for more teeth and better regulation. I voted for regulation and
more teeth in the Consumer Product Safety Commission to get lead paint
out of toys and the lead out of the bureaucracy. I voted to strengthen
FDA regulation to make sure it did not approve dangerous drugs. I also
worked to stop predatory lending and flipping in the mortgage market.
I remember way back in 1999 how all this banking mess got started.
Phil Gramm, a Senator from Texas, and Bliley, a House Member, advocated
something called the banking deregulation bill. It passed, and it got
us into this mess because it got rid of the distinction between
investment banks and
[[Page 23537]]
commercial banks, and lowered the bar on regulation. It allowed for
casino economics.
During that debate, and that vote, I was one of nine Senators who
voted against it because I said with what we were doing we were going
to create an environment where we were creating whales and sharks, and
the minnows would be eaten alive. Well, regrettably, my prediction
proved right. During that debate, I was told: Get with it, Barb. We are
in a global market. You are kind of old-fashioned.
You bet I am old-fashioned. I believe in old-fashioned values called
honesty, integrity, putting the public good above private interests.
Wall Street went around acting as if they were masters of the universe.
Now they have taken us into a black hole in our economy.
We need to get back to basics, whether it is regulating toxic
securities or tainted dog food. Our leader, Senator Dodd of
Connecticut, has done a masterful job in improving this bill.
But while we are looking at reform and regulation and rescue, there
are those who also say: Are there going to be any heads that roll?
Well, you bet. What we are doing here is for those who said ``let the
good times roll,'' we are making sure we are bringing in the FBI so
that heads roll.
I went to work when I smelled this crisis coming in January and at an
Appropriations hearing said to Director Mueller of the FBI: What is
happening in terms of mortgage fraud? He said: Senator Mikulski, we now
have over 2,000 investigations going on. It has now tripled in number.
I said: Do you need money?
He did not want to answer because OMB, the Bush administration, did
not want to say they did. But working on a bipartisan basis, we added
several million dollars to hire more FBI agents. And right this minute,
they are investigating mortgage fraud, predatory practices, deceptive
marketing, lending schemes, and so on.
So Senator Mikulski, while voting for reform, also made sure she has
the FBI coming in against the scam artists who also helped get us into
this mess.
So, yes, I have supported reform. Yes, I have supported going after
the real crooks and the bad guys. Because not everybody in the mortgage
market or in mortgage securities or in our financial matters is a
crook. But we have to restore confidence. The way we will restore
confidence is to vote for this rescue plan. It will deal with the
credit crisis. If we do not deal with the credit crisis, I believe that
Main Street economies will pay the bill, we will have to pay the bill
for the bailout, and we will pay the bill once again in lost jobs, the
ability to get a loan, and also with shrinking retirements and
pensions. So, Madam President, I will vote for this bill. But I have
heard the taxpayers loudly and clearly.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Madam President, once again, I thank my colleague from
Maryland. We have served together a long time here over the years, and
her passion, her eloquence are consistent in that same voice I heard
several decades ago as a new Member of the House of Representatives.
She has never retreated from those values. Once again, I heard them
again today.
She is absolutely right, in my view, and I will speak at some length
why this legislation is necessary, but also, as importantly, that the
steps be taken so we never see America face another day such as this
one again. So I thank my colleague from Maryland.
____________________
ORDER OF PROCEDURE--H.R. 1424
Mr. DODD. Madam President, I ask unanimous consent that with respect
to H.R. 1424, in addition to the controlled time specified in the order
for consideration of the measure, any other available time until 7 p.m.
today be equally divided and controlled between the leaders or their
designees, and that when appropriate Members speak in an alternating
fashion--Democrat, Republican--that if two Members of any one party
speak sequentially, due to availability, then it be in order for two
Members of the other party to speak sequentially, if available; that
prior to the vote on passage of H.R. 1424, as amended, if amended, the
leaders may use whatever leader time they deem appropriate, and that
the remaining provisions of the order with respect to this measure be
in effect.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
____________________
PAUL WELLSTONE MENTAL HEALTH AND ADDICTION EQUITY ACT OF 2008
The PRESIDING OFFICER. Under the previous order, the Senate will
proceed to H.R. 1424, which the clerk will report by title.
The legislative clerk read as follows:
A bill (H.R. 1424) to amend section 712 of the Employee
Retirement Income Security Act of 1974, section 2705 of the
Public Health Service Act, section 9812 of the Internal
Revenue Code of 1986 to require equity in the provision of
mental health and substance-related disorder benefits under
group health plans, to prohibit discrimination on the basis
of genetic information with respect to health insurance and
employment, and for other purposes.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Madam President, as to that last unanimous consent
agreement, let me translate that into English. Sometimes these
unanimous consent agreements get a little confusing. What we are going
to try to do over the remaining 3\1/2\ hours or so is to divide the
time equally. The minority side has agreed to limit their Members to 10
minutes each. I have not made a similar request here, but I will at
some point if Members are not understanding of the desire of everyone
to be heard--or almost everyone--on this matter.
At a point in the next few minutes, I will share some remarks that
will explain how this bill has arrived to the point that it has and why
I think it is important we support this effort this evening.
Again, I am very grateful. I will have some comments to make about
Judd Gregg, my colleague from New Hampshire. Certainly, Max Baucus, the
chairman of the Finance Committee, has been an incredible ally and
supporter over these last 2 weeks trying to fashion something that
would give us a sense of confidence about emerging from this economic
crisis. But I will reserve some comments in a few minutes about all
that.
I see my colleague from Tennessee, who I would like the Record to
reflect, while he is, I think, the most junior member on the minority
side in the Banking Committee, his contribution should never be
calibrated by the seat in which he sits in terms of seniority. I want
my colleagues to know while Bob Corker has not been a longtime Member
of this body, his contribution is that of a very senior Member of this
body. It has been invaluable.
He is knowledgeable, thoughtful, pragmatic, and made wonderful and
comprehensive suggestions to the product we have before us today. I
want my colleagues to recognize that. So I thank Senator Corker of
Tennessee for being a very good Senator in a moment such as this, which
is a sad day, as I said earlier, but a day which we must address.
So with that, let me yield the floor for Senator Corker to make some
comments.
The PRESIDING OFFICER. The Senator from Tennessee.
Mr. CORKER. Madam President, I say to the Senator: Mr. Chairman, I
thank you very much for those comments. I want to tell you, I have been
in the Senate now for about a year and 9 months, and the way the Senate
has responded over the last 10 days I am very proud of, and I thank you
for your leadership on the Banking Committee.
I think the negotiations that took place right after the, quote,
Paulson plan came forth have created a vehicle that will be successful.
I know your leadership was there, with your demeanor in dealing with
people on both sides of the aisle, in making sure all good ideas were
heard, but then, at the same time, shepherding forth a bill we can vote
on tonight--one that is steeped with taxpayer protections, steeped with
oversight, and gives the citizens of our
[[Page 23538]]
country what they need to ensure they are protected.
I know, as you mentioned, all of us are angry at the situation. I
know each of us hears the phone ring in our front offices and knows the
number of people across the country who are upset we, as a country, are
where we are. But, I say to the Senator, what you have done, Mr.
Chairman, and what those who have worked with you at the table and
people throughout this Senate have done, is to put aside blame, not let
the anger cloud our judgment.
Certainly, there are things we want to deal with when we come back in
January to ensure this does not happen again. But I think what you have
done and what Kent and others in this body today have done, sitting at
the table and in meetings and building support, was to let cooler heads
prevail.
Let me say to you, thank you for letting me serve with you. I want to
thank everybody in the Senate for the way everyone has responded to
this critical situation.
We can spend a lot of time talking about how we got here, and I know
there are colleagues who are bringing out old news articles about
certain things that were said years ago to try to sort of express, if
you will, their frustration. But, obviously, the matter before us is to
solve this problem, to make sure we deal with it in a way that is
appropriate to the American people.
I have been on the phone this week with bankers across our State. I
was just on the phone with businesses across our State. Many of them
are already dealing with this credit crisis. Many of them are very
aware of how this can overwhelm the citizens of our State. Obviously,
our care in pursuing this rescue package is to make sure that those
hard-working people all across this country who wake up every day and
do the things they are supposed to do--save for retirement, save for
their children's education--are not tremendously adversely affected by
excesses that have occurred in our financial systems.
A lot of people are having difficulty sort of comprehending, if you
will, what has happened with our financial institutions. We have had a
lot of discussions about technical issues, regarding the derivatives
and regarding toxic assets and those kinds of things. But we have an
adage in Tennessee talking about our farming community, our agriculture
community that has to do with something called being land poor. In
other words, people have assets, but those assets are not usable, if
you will, to pay the monthly mortgage and to pay other kinds of things.
Right now our financial institutions have assets on their books they
cannot transfer. They cannot create liquidity. This is seizing up, if
you will, the credit markets throughout our country. There is a lack of
trust that exists between our financial institutions. My fear is if we
don't do something prudent and drastic at this moment in time, again,
those very hard-working people across our States will be very adversely
affected.
Look, there are a lot of ways we can deal with this problem. There
are a lot of ideas about how we place equity back into our financial
markets. They all end up at the same place, and that is we have to
create a cure, if you will, for the lack of liquidity, having those
frozen assets on the books of these financial institutions.
I believe if the Treasury Secretary and those around him who are
properly overseeing this carry out their responsibilities in an
appropriate manner, with any degree of prudence--and I believe they
will with the oversight measures we have built in--this is something
where the taxpayers will not only get their money back but should, in
fact, get a return. As all of us know, all of this money is coming back
into the Federal Treasury to be spent to reduce our Federal deficit.
So let me say tonight, to me, is critical. It is something that is an
unpleasant task because the general public sees this as something, in
some cases, other than what it is, and that is something that is
directly helping the people across our country. I think there is a
reason for their anger. I, too, share that anger. But at the end of the
day, this is something I believe needs to pass.
Upon passage, the next step that needs to occur is that the Treasury
Secretary and all of those working with him need to put in place a very
prudent, a very transparent process so that all of us can see the value
of these assets that are being bought in real time. So tonight's vote
is very important.
The next phase is also very important as it relates to making sure
this vast amount of money we are talking about actually comes back into
our Treasury.
Then there is a third component we all need to be committed to, and
that is when we come back in January, we need to work together, as we
have during this crisis, to be sure this never happens again. I know
the chairman of our Banking Committee and all of us have been stunned
at the fact that financial institutions could own hundreds of billions
of dollars of assets outside the knowledge of regulators.
So tonight, to me, this vote in this body is the first step in a
three-step process; that is, immediately giving the Treasury Secretary
the ability to deal with this crisis in a way that is prudent, that
gets our banking systems back in more of an orderly process, ensuring
that payroll checks are cashed, that home mortgages are obtainable, and
that student loans are obtainable. The second step is staying involved
in ensuring that the Treasury Secretary implements prudent policies in
making sure the taxpayer money comes back. And the third step is making
sure we reform this process so these types of excesses never happen
again.
Let me say in closing on that topic, I started out very skeptical.
When we began talking to Secretary Paulson in our banking hearing, I
was skeptical of his three-page bill. I think this body, working with
the House, has exercised the right amount of due diligence and
oversight. I think we have a bill tonight we can be proud of. There
will be human mistakes made down the road. But we have a bill in place
we can be proud of. I urge my colleagues to strongly support this
legislation to help our country avert what I believe will be one of the
greatest fiscal crises, financial crises, we will have dealt with as a
country in modern times.
I wish to thank Chairman Dodd for his leadership in this crisis, and
his steady hand, which I believe with all my heart is going to make
this country stronger.
Madam President, if I could have 2 minutes with unanimous consent to
speak as in morning business, I would appreciate that.
The PRESIDING OFFICER. Without objection, it is so ordered.
Tribute to Senators
Mr. CORKER. Madam President, there are a number of distinguished
Senators who are leaving this body this year. I know there have been a
number of tributes given to all of them and their service. Senator
Warner is a very distinguished Senator whom I have known, it seems from
afar, almost all of my life. I have watched him with great admiration,
and I have watched him lead us on the Armed Services Committee. Chuck
Hagel, who exercises this tremendous independence, somebody with whom I
have really enjoyed serving on Foreign Relations; Wayne Allard from
Colorado who is honoring a two-term pledge to leave this body after two
terms to go back to the people of Colorado, he has been distinguished
in his service on the Banking Committee; Larry Craig of Idaho who,
again, in the energy area, has offered great counsel and made sure that
wise decisions were made in that particular committee--I honor all of
them. I wish them well. I think we are all better having had the
opportunity to serve with them.
Pete Domenici
There is one particular Senator with whom I have spent more time than
the others just because of committee assignments, and that is Pete
Domenici. Pete is the ranking member on our Energy Committee. I have
loved listening to his many insights. He has with him Frank and Scott
who, hopefully, will stay with us and who, together as a group, I think
have offered wise counsel to all of us on that committee.
[[Page 23539]]
There is something about Pete, though. His kindness and his
encouragement to me as a person have been most unique. As Chairman Dodd
mentioned earlier, I am one of the most junior Members here, but Pete
has constantly encouraged me to step out, to make my positions known,
to go ahead and forget the fact that I am positioned where I am here in
the Senate and to take on a leadership role where it is important for
me to do so. There is a special place in my heart for people such as
Pete Domenici who encourage all of us to step out and to try to
exercise our full potential. I will miss him greatly. I know he loves
this body. I know that in many ways he will be lost as he leaves this
body. But I want to assure him today that as he leaves, this is one
Senator he has encouraged, he has caused to be a better person, and
Pete Domenici will always be a part of the Senate service I offer in
this body. So I wish him well. I wish the others well.
Mr. DODD. Madam President, I thank my colleague from Tennessee.
Again, I appreciate his tremendous efforts that have brought us to this
moment.
Amendment No. 5685
I have an amendment at the desk and ask for its immediate
consideration.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Connecticut [Mr. Dodd] proposes an
amendment numbered 5685.
Mr. DODD. Madam President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is printed in today's Record under ``Text of
Amendments.'')
Mr. DODD. Madam President, I wish to take a few minutes to describe
this amendment to my colleagues at this hour. I wish to talk as well
about some of my colleagues who have helped us get to this point.
There is a crisis in our country. That has been said so many times
now. I hope the impact of that statement is not being lost because of
the repetition of it. We need to address it swiftly and forcefully.
That is why we are here today.
Normally, when you talk about bringing up a bill, there is a certain
amount of joy involved in putting something together that you think is
proactively going to make a difference. In this case, we are coming
together around a proposal and a bill that is in response to a
situation that has angered millions of Americans and angers most of us
here to be in this situation but also heightens the sense of
responsibility that requires us to act. Therefore, we will spend the
next few hours sharing with each other, as well as with the American
people, why we are in this situation, to some degree, but clearly what
our response is to it and our hopes that this proposal will make the
difference that many Americans expect.
If Americans doubt we are living in perilous times in our Nation's
history, they need to look no further than at what is happening in the
financial markets over the last few days. Clearly, this is no ordinary
time, no normal economic downturn. This is a day unlike other days.
This crisis, and the choice it demands, is unlike few we have ever seen
before, even those who have served in this Chamber for several decades.
This Chamber may not be full, but millions, in time, will hear the
words we speak, and millions will feel the vote we cast around 7 p.m.
this evening. In the end, once the reputations we stake, for good and
ill, have long since gone to dust; once this day has turned from flesh
and blood to textbook page for a child who is not yet born; one of two
things will be said about us and how we acted on this heavy day. They
will say the Senate did what was right, or they will say the Senate
washed its hands of this problem and walked away.
If this bill could be written as starkly as that, the vote would be
unanimous. But bills never are. They are full of jargon and verbiage
and compromise, and as necessary as they are, they can crust over and
obscure the essence of our choice. We read stories of foolish choices
in our history books and from our safe distance, it is so easy to
shout: Why didn't they know any better? But up close, in the flesh and
blood of the moment, even on a day such as today, making the wrong
choice can be supremely easy.
Nearly eight decades ago, the men who sat in these chairs--and there
were only men in those days--were faced with a crisis not unlike the
one we face today. They faced a recession that threatened to turn much
worse. They did what was easy. They lashed out at the world and threw
up huge barriers to trade. They found someone to blame--not because it
was good economics but because it felt good. President Hoover signed
the 13 letters of his name with six gold pens and launched a trade war.
The world retaliated. Commerce shut down. And passing a bill that felt
good drove us deeper and deeper into depression.
This week, on both sides of the Capitol, I could imagine how pleasant
it would feel to vote no. In that respect, those who stand on the other
side of this issue will have a much happier week. What a rush of
affirmation they will get as they stick a finger in the eye of the
bankers and the tycoons whose greed brought us to this crisis. Believe
me, I can sympathize.
But after the vote has been cast for pique and for spite, what then?
After the rush of righteousness fades, what then? It has been said:
``Let justice be done, though heavens fall.'' It is a noble thought,
but it is much easier to say when the heavens are in no danger of
falling on you. Who will they fall on? They will fall on the million or
more families who can lose their homes. They will fall on the mothers
and fathers telling their children that the college loan isn't coming
through and struggling to explain why. They will fall on workers laid
off all over this country as credit dries up and as businesses fail to
make their payrolls and as they send their employees home with pink
slips through no fault of their own.
We are one Nation, one economy, and one body. We can take a cut at
Wall Street, but Wall Street will not feel the worst of the pain--not
by a long shot. The blood will not come from them. My colleagues know
who will feel the pain, who will be bled the most by this crisis: those
whose economic world is made up of credit cards and mortgage payments,
not hedge funds and credit default swaps. The men and women and
families we represent will feel the pain of a ``no'' vote.
The world will feel the pain, too, I might add, men and women and
families just like ours who don't speak our language, who are asleep on
the other side of the world as I speak these words right now but who
are bound to us in a web of commerce more tightly than ever before in
world history. They are watching, too, I might add.
Today's Washington Post quotes a banker in Germany, a man who did
nothing to cause this crisis but who will suffer from it as much as if
he did. And his faith in America, even now, even today, ought to
inspire each and every one of us in this Chamber.
Let me quote him for you:
All I can say is that I simply cannot imagine that the
Americans will not come up with some sort of a solution.
Anything else is outside the realm of my imagination.
Outside the realm, Madam President, of his imagination that this
Senate of ours will not solve this problem, in conjunction with the
work of the other body. He is speaking of a nation of doers, of fixers,
of problem-solvers, of people with optimism and confidence in our
future. We can be that Nation again. In fact, we must be.
Madam President, I love my job here in the Senate. I normally sit in
the seat right behind me here, my father's desk. I sit it in every day,
have for 28 years. I love that desk, love this Chamber, and today there
is not a place I would rather be. I am sure my colleagues, each one of
them, have their own stories, 100 of them, of their love of this job
and of this place and what it means to be a Senator. But how can we
possibly weigh those hundred jobs, if you will, against the 600,000 or
more that have been lost in America just this year alone and the
million more that could follow if we could save those
[[Page 23540]]
jobs by giving up our own? How could we not? Who could come to this
floor and say with a clean conscience: I will save my job but put
hundreds of thousands of jobs at risk all across this great country of
ours. I don't believe a single Member of this body, regardless of
party, would ever make that trade. They would be willing to give up
their job to save that of others.
As Edmund Burke said to his constituents centuries ago:
The legislator's ``unbiased opinion, his mature judgment,
his enlightened conscience, he ought not to sacrifice to you,
to any man, or to any set of men living. These he does not
derive from your pleasure; no, nor from your law and the
constitution. They are a trust from Providence, for the abuse
of which he is deeply answerable.''
I am answerable today, as are all of us in this Chamber, and I intend
to answer correctly. I intend to answer yes, we ought to do this to get
our country back on its feet again. That is the job of a Senator.
By now, it is well known how we arrived at this critical moment.
Years of what Secretary Paulson himself has called bad lending
practices went essentially unchecked by a regulatory system that was
not on the job. These bad lending practices have been primarily in the
area of mortgage lending.
As we all know, culpability for these practices exists in every link
of the lending chain, from mortgage brokers to lenders to the
investment banks. Certainly there are many borrowers who acted
irresponsibly. They should not be excused for the consequences of their
actions but neither should those whose culpability was significant and
catastrophic in terms of their impact on mortgage lending and on the
credit markets.
Almost 2 years ago, the Senate Banking Committee held the first
congressional hearing of the new Congress on predatory lending. At that
hearing, I and others of that committee, Democrats and Republicans,
warned of a coming wave of foreclosures that could devastate millions
of homeowners and have a devastating impact on our economy. Some,
unfortunately, scoffed at those predictions. Well, no one is scoffing
anymore. Financial market turmoil is affecting families and businesses
all across this country, and the contagion has spread beyond the shores
of our own Nation.
A paper in my State, the Connecticut Post of Bridgeport, CT, reported
that, at Sacred Heart University, Julie Savino, dean of student
financial assistance, is fielding calls from parents who never before
sought financial aid. Laid off or without medical insurance or unable
to secure a home equity line of credit, parents are suddenly on the
hunt for alternative means to pay for their children's education. Some
students have had to walk away from their educations all together, she
points out.
Reuters News Service reported that Kansas City cabinetmaker Anthony
Gallo had no debt 18 months ago. None. Now he is being forced to borrow
just to make payroll.
Let me quote Mr. Gallo:
My line of credit has been cut to nothing. We are all
hurting and wondering what is going to happen. They have got
to do something to save the banks. They can't kill our
economy.
The fact is, the banking and financial system is an essential part of
our Nation's economy. A halt in the flow of money threatens not only
Wall Street firms--which would not bring us here today--but endangers
the way of life for millions of Americans far beyond Lower Manhattan.
Right now, banks are afraid and in some cases unable to lend money,
money companies need to make payroll, money families need to pay
medical bills, money students need to pay for college, money small
businesses need to stock their shelves with inventory, money a gas
station needs to supply its pumps with gas, and money investors provide
to entrepreneurs to start new businesses and create new jobs. We know
that money isn't moving. That is what the credit crunch means.
Very few Americans have ever heard of something called the LIBOR,
which stands for the London interbank offered rate. This is a rate
banks charge when they make loans to other banks. It is also the rate
that is used to calculate the cost of home loans, student loans, auto
loans, and small businesses. Yesterday, LIBOR jumped over 400
percentage points in just 1 day.
In many ways, this is the canary in the coal mine, if you will. It is
a sign of the strains that are threatening the essential flow of credit
to the people of our country and, indeed, the industrial world.
Another canary in the coal mine is the rate on Treasury bills.
Several days ago, fearful investors rushed into safe Treasury
securities, sending yields on Treasurys into negative territory for the
first time in at least half a century. When people see that the money
they have placed in banks and money market funds is earning negative
interest, they may feel compelled to pull their money out of such
financial institutions. This could result in even further erosion of
the supply of money in our economy.
Our economy is on a precipice--and that is not an exaggeration, that
is not hyperbole--and we must do what we can to move it back from that
brink. The legislation before us and the amendment I have offered, this
comprehensive amendment before the Senate today, represents an effort
to do just that.
Just 10 days ago, the administration--if I may just remind my
colleagues, this is the bill, I hold it in my hands, three pages long--
the administration sent to us a bill that called for $700 billion to go
out without any questions asked, without any oversight, any
accountability, or any taxpayer protection. Three pages. I might point
out, as I said to some, a no-documentation loan for $100,000 to a
subprime borrower a few years ago was four pages long. Here is a
request for $700 billion that is three pages long. And my colleagues on
both sides here said no to that, we are not going to do that.
As a result, over these last 2 weeks, we have put together a piece of
legislation that gives us much more heightened protection about how
this program would work. There are a lot of people who deserve
tremendous credit, but I thank my colleagues for rejecting this offer
of three pages for $700 billion in return for drafting a comprehensive
bill that I believe will provide the kind of security people are
looking for with a plan of this magnitude. I refused, along with my
colleagues, to provide a blank check on this not just for this
administration--I would do it with any administration, and my
colleagues did as well. This crisis demanded we bring together Members
of the House of Representatives, the Senate, Republicans and Democrats,
and hammer out a better solution for the American people.
Our leader, Senator Harry Reid, the majority leader, deserves
incredible credit for his determination to stick with it and not walk
away and demand each and every day, when things began to fall apart,
that we stay and work at it. He was joined by the minority leader,
Senator McConnell, equally committed, I would point out, to the same
efforts, as well as a number of others who played significant roles.
Judd Gregg of New Hampshire I have been talking about and spending a
lot of time with over these last 2 weeks, working out this particular
bill that we brought together, and I thank him for his efforts.
Jack Reed of Rhode Island was the principal author of the warrants in
this bill, to make sure the American taxpayer comes first. If these
instruments turn out to be more profitable and they actually are sold
and we make our money back, the people who will get the benefit of that
first are the American taxpayers, and Jack Reed demanded that.
Pat Leahy looked at the provision of this original proposal which
suggested that no court of law, no agency could ever question how this
$700 billion was going to be used, and the chairman of the Judiciary
Committee said that passage will not last and struck it and offered new
language that provides judicial protection in this bill.
I have mentioned Bob Corker already, Senator Corker of Tennessee, who
was valuable over the last 2 weeks, and Mel Martinez and Chuck Hagel.
My colleague from New York, Chuck Schumer, who is knowledgeable about
[[Page 23541]]
this subject matter and who represents the State of New York--I can't
begin to describe how valuable Chuck Schumer has been in this process.
From the very beginning, there hasn't been a meeting that has occurred
or a discussion held where he hasn't played an invaluable role in
seeing to it that we stayed with it.
Dick Durbin, the majority whip, and Bob Bennett of Utah--again, the
ranking Republican on the Banking Committee historically has played a
very important role on so many issues during his tenure here and again
was tremendously helpful.
Max Baucus, whom I have mentioned--chairman of the Finance
Committee--played a critical role as we fashioned this together.
My dear friend and colleague, Kent Conrad, the chairman of the Budget
Committee, was incredible in his determination that this package be
fiscally sound, that we have provisions that would guarantee our debt
would be retired as part of the effort here when resources are sold and
the profits are gained. So I thank my friend. He is here, in fact, on
the floor. My colleague has been a tremendous help in all of this,
Madam President.
I want to also mention, from the other body, Barney Frank of
Massachusetts, my counterpart on the House Financial Services
Committee, was, again, tireless over the last couple of weeks in this
effort, and Congressman Roy Blunt, Speaker Pelosi, Representative
Boehner as well, and Rahm Emanuel.
There are so many people, and I want to be careful, but clearly this
was a huge effort. I wish in many ways that the American people could
have been a witness to these gatherings that went on day after day. I
think they would have been proud of their Congress at a time when
Congress's reputation is not great. I think they would have been proud
to see the effort that was being made, not where people were running to
a political corner wearing a Republican or Democratic hat but coming
together as Senators and Congressmen, along with those from the
Treasury Department, to make a difference. All of these Members of
Congress undertook the enormous and in many respects thankless but
nevertheless vital task of crafting this proposal which we offer to our
colleagues this afternoon--the Emergency Economic Stabilization Act of
2008.
This legislation would address, we hope, our Nation's economic
emergency in three key ways: economic stabilization, taxpayer
protection, and home ownership preservation.
This bill gives the Treasury Secretary the authority to respond
quickly, forcibly, but responsibly to the current crisis. It authorizes
him to buy a total of $700 billion in troubled assets, broken down into
three separate tranches, with the final tranche subject to
congressional review and approval.
Madam President, $700 billion is a staggering amount of money. We all
understand and share the anger of the American people that they are
being asked to commit that sum. But in a $14 trillion economy, this is
the kind of financial firepower that must be brought to bear to contain
the financial crisis.
Secondly, in consideration of the extraordinary burden this bill
potentially places on the taxpayer, we maximize, to the extent
possible, protections of the taxpayer.
The bill establishes an oversight board to review and shape the
policies of the Treasury Department in carrying out this program.
Unlike the original Treasury proposal, this bill subjects the actions
of the Treasury Secretary to strong judicial review that would prohibit
actions that are arbitrary, capricious, or otherwise unlawful. It
places firm limits on executive compensation to help ensure that
corporate executives whose companies receive taxpayer benefits do not
walk away with golden parachutes and are not otherwise rewarded for
wrongdoing.
We require taxpayers to receive warrants so that they can benefit
when a company benefits from taxpayer assistance. In addition, we
require that any profits generated from the sale of these assets
purchased with public funds go to reducing our national debt.
We provide for extensive reports so that Members of Congress and the
public at large will know how every dime of this program is being used.
Within 48 hours of any transaction, the Treasury Secretary will have to
report the amount, the terms, and the participants associated with that
transaction. The General Accounting Office will have immediate and
ongoing audit authority and report to Congress every 60 days. A special
inspector general will be established to monitor and police the
program's activities and its participants.
The third priority advanced by this legislation is home ownership.
This is not an ancillary objective; it is inherent, in my view, to our
efforts to resolve this economic crisis.
Chairman Bernanke himself has spoken forcefully on this point. Our
economy will recover only when we put an end to the spiral of
foreclosures that are pulling down our entire financial system. To that
end, the legislation requires that all Federal agencies that own or
control mortgages or mortgage-backed securities preserve home
ownership. In addition, the legislation expands eligibility for the
HOPE for Homeowners program, which allows lenders and borrowers to
access Federal mortgage insurance in order to put homeowners on a path
to security, not financial ruin.
This is not an easy vote. There will be no balloons or bunting or
parades for Members at the end of this process, only the knowledge that
at one of our Nation's moments of maximum economic peril we acted, not
for the benefit of a particular few but for all Americans so that they
and those who come after them may enjoy the full blessings of life in
this great Nation of ours.
We are a nation of optimism and confidence. Americans deserve to have
that restored. Our job tonight will give them a chance to do that. I
urge my colleagues to support this amendment.
I yield the floor.
The PRESIDING OFFICER. The Senator from Oklahoma is recognized for up
to 10 minutes.
Mr. COBURN. Madam President, it is tremendously ironic that we are
here today. It is ironic in the sense that as we ignore what the
Constitution tells us, we embrace defeat, difficulty, and peril.
Madam President, I ask unanimous consent that the full text of
article I, section 8 of the Constitution be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Section. 8. \1\ The Congress shall have Power To lay and
collect taxes, Duties, Imposts and Excises, to pay the Debts
and provide for the common Defense and general Welfare of the
United States; but all Duties, Imposts and Excises shall be
uniform throughout the United States;
\2\ To borrow money on the credit of the United States;
\3\ To regulate Commerce with foreign Nations, and among
the several States, and with the Indian Tribes;
\4\ To establish an uniform Rule of Naturalization, and
uniform Laws on the subject of Bankruptcies throughout the
United States;
\5\ To coin Money, regulate the Value thereof, and of
foreign Coin, and fix the Standard of Weights and Measures;
\6\ To provide for the Punishment of counterfeiting the
Securities and current Coin of the United States;
\7\ To establish Post Offices and post Roads;
\8\ To promote the Progress of Science and useful Arts, by
securing for limited Times to Authors and Inventors the
exclusive Right to their respective Writings and Discoveries;
\9\ To constitute Tribunals inferior to the supreme Court;
\10\ To define and punish Piracies and Felonies committed
on the high Seas, and Offenses against the Law of Nations;
\11\ To declare War, grant Letters of Marque and Reprisal
and make Rules concerning Captures on Land and Water;
\12\ To raise and support Armies, but no Appropriation of
Money to that Use shall be for a longer Term than two Years;
\13\ To provide and maintain a Navy;
\14\ To make Rules for the Government and Regulation on the
land and naval Forces;
\15\ To provide for calling forth the Militia to execute
the Laws of the Union, suppress Insurrections and repel
Invasions;
\16\ To provide for organizing, arming, and disciplining
the Militia, and for governing such Part of them as may be
employed in the
[[Page 23542]]
Service of the United States, reserving to the States
respectively, the Appointment of the Officers, and the
Authority of training the Militia according to the discipline
prescribed by Congress;
\17\ To exercise exclusive Legislation in all Cases
whatsoever, over such District (not exceeding ten Miles
square) as may, by Cession of particular States, and the
acceptance of Congress, become the Seat of the Government of
the United States, and to exercise like Authority over all
Places purchased by the Consent of the Legislature of the
State in which the Same shall be, for the Erection of Forts,
Magazines, Arsenals, dock-Yards, and other needful
Buildings;--And
\18\ To make all Laws which shall be necessary and proper
for carrying into Execution the foregoing Powers, and all
other Powers vested by this Constitution in the Government of
the United States, or in any Department or Officer thereof.
Mr. COBURN. I also ask unanimous consent that the 10th amendment to
the Constitution be printed in the Record at this time.
There being no objection, the material was ordered to be printed in
the Record, as follows:
The powers not delegated to the United States by the
Constitution, nor prohibited by it to the States, are
reserved to the States respectively, or to the people.
Mr. COBURN. For those of you who are not familiar with those two
portions of our Constitution, they are very clear. Article I, section 8
is the enumerated powers that are given to Congress. They are very
specific. They are very direct. It tells us what we are to be dealing
with and what we are not to be dealing with. It tells us the extent to
which the Federal Government is to intervene in the lives of Americans.
The 10th amendment, on the other hand, says that whatever is not
included, specifically listed right here in the enumerated powers, is
totally and absolutely reserved for the rights of the States.
As a practicing physician, I compare where we are today to a
physician who commits malpractice. We have a patient with cancer. They
have a secondary pneumonia because of the cancer. We are going to treat
the pneumonia. We are going to give the antibiotics, we are going to
give something to lower the temperature, we are going to give something
to suppress the cough, we are going to give something to thin the
mucous, but we are not going to fix the cancer. We are going to ignore
the cancer.
Let me tell you what the cancer is. The cancer is Congresses that,
for years upon years, have totally ignored the Constitution of the
United States and taken us to areas where we have no business being.
There is no way you can justify, in the U.S. Constitution, that the
country ought to be the source of mortgages for homeowners in this
country. Yet Fannie Mae and Freddie Mac control 70 percent of the
mortgages in this country.
I plan on voting for this bill. I support that we have to do
something now. But how we got here is very important if we are going to
fix things in the future. The fact is that, at the same time we are
debating this very important issue, we have on the floor another
violation of the enumerated powers, which is the Amtrak and Metro
earmark fiasco. It is going to be very interesting to see the Members
of this body as they vote to bail out the financial institutions in
this country while at the same time they continue to commit the same
error that got us there in the first place. There is no question Amtrak
is going to get reauthorized. The American people are going to spend
$2.3 billion subsidizing the riders on Amtrak in this country.
In 2006 we subsidized food on Amtrak to $100 billion--I think it is
down to $70 million now--despite an explicit provision within the
Amtrak bill that says they will never sell anything for less than its
cost and they were to lose no money on food.
Where is the answer? The answer is there has been no oversight to
make sure Amtrak doesn't lose money on food. We have ignored it. We
have ignored the enumerated powers of the Constitution. We are now
committing the same Federal error in a much smaller way on Amtrak as we
did on housing. If anybody in America is mad about this situation,
there is only one place they need to direct their anger and it is right
in the Congress of the United States.
It is not specific Members, it is bad habits. We are not going to cut
out the cancer. We are not going to give the radiation therapy. What we
are going to do is we are going to continue to treat the symptoms
rather than directly go after the cause that has created the greatest
financial risk and peril this country has ever seen. We are not going
after the cause.
The cause is get back within the bounds of the Constitution that very
specifically says where we have business working and where we do not.
Because we are out of those bounds, we have now put at risk every job
in this country, the savings and retirement of people who worked for
years, because we decided we would ignore the wisdom of our Founders
and create systems that are outside the enumerated powers that were
given to us because we know better.
We do not know better. It is obvious. There is no administration to
blame. It is not the Clinton administration or the Bush
administration's fault we are in this mess. Because if you say that,
what you have to say is you did all the oversight, you had all the
hearings, you knew what was going on and you didn't do anything about
it. So either we didn't know or we did know and did nothing about it.
There is only one place to come to hold accountability and it is in
this body. You are going to get to see tonight people continue to vote
outside the bounds of the Constitution, as we reauthorize $2.3 billion
of subsidies for Amtrak, and we do not hold Amtrak accountable. We are
going to give $1.5 billion and the mother of all earmarks to Virginia
and Maryland for a Metro system that the Federal employees use more
than anybody, and we are subsidizing an additional $100 million through
individual agencies to pay them to ride it. And we wonder why we have
these problems.
It is very simple. We are committing malpractice. We are not living
up to the oath we undertook when we became Members of this body. That
oath says you will defend and uphold the Constitution. It doesn't say
you will rewrite it because it pleases you politically. We are here
today because of fatal errors on the part of Members of this body to do
something that is totally outside the bounds of the wisdom and
foresight our Founders gave us.
Those are tough words. But we are in tough times. If we do not get
about withdrawing and getting back within the realms of the power
granted to us, this is just the first in a very large roll of problems
this country is going to face.
Madam President, how much time do I have?
The PRESIDING OFFICER. The Senator has 3 minutes remaining.
Mr. COBURN. Let me describe for a moment the problems that are coming
if we get past this one. Here are the problems that are coming. We are
on an unsustainable course. The unfunded liabilities for Medicare alone
are $100 trillion. A child born today in this country faces $400,000
for taxes for things they will never get a benefit from--$400,000. Who
in this country starting out even could absorb that debt, pay the
interest on it, and ever hope to own a home or have a college
education? Yet this body continues to spend more, authorize more, and
create bigger and more intrusive Government, limiting the power of the
great American experiment to, in fact, supply an increased standard of
living.
We are in tough times, but they are going to get tougher until the
American people hold this body accountable to live within the rules set
out in a very wise, a very providential way that served this country
well. We ignore this book, this Constitution, at our peril. We are
reaping exactly what we have sown.
I yield the floor.
The PRESIDING OFFICER. The Senator from Connecticut is recognized.
Mr. DODD. Madam President, I want to recognize the Senator from North
Dakota.
The PRESIDING OFFICER. The Senator from North Dakota is recognized
for 5 minutes.
Mr. CONRAD. Could I ask for an additional 5?
[[Page 23543]]
Madam President, first I thank Chairman Dodd for his extraordinary
leadership. Let me say to every Member, we are fortunate to have Chris
Dodd at this critical position at this important time. He has conducted
himself as a superb professional. Thank you, Chairman Dodd, for the
leadership you have provided for the country, and to the rest of the
negotiating team from the Senate, Senator Gregg, who did such a strong
job of leadership in those negotiations, Senator Schumer, Senator
Baucus, Senator Jack Reed--all of whom made major contributions;
certainly our own leader Harry Reid, who insisted that we stay at it
until the job was done.
Colleagues and countrymen, this is a defining moment. History is
being written. Our economy is threatened. We all understand that at the
heart of this matter is a housing crisis compounded by a fiscal crisis
compounded by an energy crisis, all of them closing in on the country
at this moment. The home foreclosure rate is the highest level ever. We
have seen the stock market decline by more than 22 percent since its
peak last October, with the most recent plunge, the day before
yesterday, the Dow falling 777 points in 1 day. We all know that.
Even more important is what is happening in the credit markets.
``Credit Enters a Lock Down, and Wheels of Commerce Freeze Up.''
But in this story from the New York Times of September 26 are these
two paragraphs:
With the economy already suffering the strains of plunging
housing prices, growing joblessness, and the newfound
austerity of debt-saturated consumers, many experts fear the
fraying of the financial system could pin the nation in
distress for years.
Without a mechanism to shed the bad loans on their books,
financial institutions may continue to hoard their dollars
and starve the economy of capital. Americans would be
deprived of financing to buy houses, send children to college
and start businesses. That would slow economic activity
further, souring more loans, and making banks tighter still.
In short, a downward spiral.
We can see the beginnings of precisely that dynamic in the credit
markets. This, the spread between the 3-month rates on LIBOR and
Treasury bills, is a measure of the risks banks see in lending to each
other. It has shot up to record levels in these last 72 hours. That
means credit is being choked up. That means credit is being locked up.
That means the economy is being locked down. What is the result of all
this? We have already seen major financial institution after
institution fail: Fannie Mae, Freddie Mac, Bear Stearns, Lehman
Brothers, Washington Mutual--the largest savings and loan association
in America--AIG--the largest insurance company in the world--Wachovia,
Merrill Lynch and, overseas, FORTIS and four other major financial
institutions, just over the weekend.
Colleagues, we can connect the dots. Something dramatic and serious
is occurring.
The Chairman of our own Federal Reserve said this to us: If we fail
to act, unemployment could rise to 8 or 9 percent in the next 6 months.
What would that mean? That would mean between 3 and 4\1/2\ million more
Americans would lose their jobs in the next 6 months. Colleagues, let's
focus on this point. The Chairman of the Federal Reserve is telling us,
absent our action, 3 to 4\1/2\ million more of our countrymen could
lose their jobs in the next 6 months.
The truth is, none of us knows if this package will be enough--but it
is a beginning. It is a solid beginning. It is a bipartisan beginning.
We may need to do more, but much has already been done.
Let's look at the package that was sent us. The administration sent
us a package with no equity stake for taxpayers. That meant no upside
for taxpayers. Seven hundred billion dollars was provided in a lump
sum. All the power in the hands of one person, the Secretary of the
Treasury, and no limits on executive compensation or golden parachutes.
In the negotiations from Thursday until now, we have dramatically
changed this package. Taxpayers will now receive an equity stake, so
they have a potential profit when markets recover. Funding is now to be
released in three installments, not just one lump sum, allowing for
additional congressional oversight.
An oversight board will now be created to ensure that the Treasury
actions protect taxpayers and are in the Nation's economic interests.
And now, no golden parachutes will be allowed, and executive
compensation will be capped.
In addition, FDIC insurance is now raised from $100,000 per account
to $250,000 an account.
Madam President, how much time do I have remaining?
The PRESIDING OFFICER. The Senator has 4 minutes remaining.
Mr. CONRAD. Madam President, this is a defining moment. All of us
understand the anger of our constituents and our own anger. I must say,
as I have been part of this effort over this last week, my own anger
level has risen as I have heard descriptions of the extraordinary
risky, reckless behavior of people all throughout the chain who have
helped create this crisis.
We will hold them to account. Already the FBI has launched four
investigations. People will be criminally charged, I believe, before
this is over. Today, we have a decision to make. Do we support a
package to soften the blow, to try to prevent this downward spiral from
accelerating and intensifying?
That is our challenge. That is our charge. This is our best chance.
This is our best chance. I ask my colleagues to support it. Again, we
understand this is a tough vote. But our country needs us now. Our
country is counting on us now. Let's not miss the chance to do
something important for our Nation to prevent this crisis from
intensifying.
I especially wish to thank the chairman of the Banking Committee who
has given his all to this effort.
I yield the floor.
The PRESIDING OFFICER. The Senator from Maine is recognized.
Ms. COLLINS. Madam President, I rise to speak in support of the
bipartisan legislation we will vote on tonight, that will help to
stabilize our financial markets, to prevent catastrophic consequences
for our entire economy.
Nobody is happy with the crisis we face, with the urgent pressure to
take decisive action or with the very limited policy options available
to us at this point. I share the anger of many of my constituents over
this crisis, and I subscribe to the principles many of them invoke. As
the Senator has pointed out, the initial proposal the Treasury
Secretary presented to us was deeply flawed. That is why I pushed for
strong taxpayer protections to be included in the plan. That is why I
insisted that any plan include limitations on excessive compensation
and golden parachutes for executives of the Wall Street firms that
helped create the current crisis and that now seek Federal assistance.
Those controls and safeguards are part of the bipartisan package now
before the Senate. That is why I advocated for strong oversight and
accountability provisions rather than a blank check for the Secretary
of the Treasury.
Those oversight and accountability protections, too, have been
included in this package. I supported the proposal for a special
inspector general to review the way this program will operate. But the
fact is, unfortunately, we have to face the reality that the collapse
of the housing bubble and the mortgages, the subprime mortgages and the
exotic securities that floated along with them, do not just affect the
executive suites on Wall Street. In fact, the ramifications cascade
throughout our economy, affecting the credit lines needed by small
businesses to meet their payroll, the young couple seeking to buy their
first home, the automobile dealer trying to finance his inventory, the
55-year-old worker whose 401(k) plan lost a great deal of its value,
and even our States and counties.
The State of Maine found itself unable to finance a routine $50
million transportation bond last week. How did we get here? Well, the
culprits are many. They include the greedy Wall Street traders whose
culture rewards risk taking and focuses on short-term problems.
[[Page 23544]]
They include unscrupulous mortgage brokers who pushed people into
mortgages that were totally unsuitable for them. They include the naive
or the deceptive borrower who simply did not understand or
misrepresented their ability to pay once their mortgage rate reset.
They include, at the heart of this scandal, the Government-backed
mortgage finance companies, Fannie Mae and Freddie Mac, that took on
huge amounts of risk with paltry levels of capital.
Sixteen years ago, some Members of Congress warned of the potential
systemic risks Fannie Mae and Freddie Mac presented. Officials in both
the Clinton and Bush administrations issued warnings and proposed
reforms. In 2005, legislation that would have made a difference was
actually considered by the Senate Banking Committee and proposed by
Republican members of that committee. The full House considered a bill
that would have helped, although, unfortunately, it rejected some
strengthening amendments.
Unfortunately, these reforms did not get enacted until this July,
when the sheer pressure of the mortgage crisis finally forced Congress
to act. This is a huge crisis. There are some $1 trillion worth of
subprime mortgages in the country. Freddie Mac and Fannie Mae hold or
guarantee more than 40 percent of America's mortgages and lately have
been buying more than 80 percent of new mortgages because the private
sector for the mortgage finance market has virtually disappeared.
As a former Maine financial securities and banking and insurance
regulator, I understand this is a very complex problem. Its roots lie
in the past decade of the real estate bubble, the relaxed lending
standards, the existence of this huge and exploding subprime mortgage
market, the creation of complicated securities tied to mortgages that
were not held by the originators of those mortgages, and then the sale
of those securities when their risks were poorly disclosed, not well
understood, and lightly regulated, if at all.
The subprime mortgages were bundled together into mortgage-backed
securities that were, in turn, linked to complicated financial
instruments that in some cases were not regulated at all. An example
are the swaps we have heard discussed. The swaps are not securities so
that, as such, they were not regulated by the SEC. While they perform a
function very similar to an insurance policy, they are not insurance in
the traditional sense, so they escaped regulation by State insurance
regulators.
The lack of regulation set the stage for deep losses for countless
investors and other entities that had entered into the swap contracts.
But frustrated and angry though we are, the focus of our attention must
be on averting the worsening storm of financial distress, and we must
have the much-improved bipartisan package to halt its spread and to
mitigate its damage.
We have all seen the big headline events, the bank failures, the
Government takeover of Freddie Mac and Fannie Mae, the failures of Bear
Stearns and Lehman Brothers, the forced sales of Merrill-Lynch and
Wachovia. These are the big headline events, and they may seem detached
from people's daily lives, but they are not. Millions of Americans are
being reminded that the cost and supply of new mortgages, the value of
our homes, the availability of student loans, the interest rates on our
credit cards, the short-term loans for business payrolls and supplies,
the value of our retirement savings, are all tightly connected to the
global web of credit and finance.
Economists of every ideological leaning agree we face a catastrophic
crisis if we do not act. Monday's sudden drop in the stock market, the
disappearance of interbank lending, the flight from money market funds,
all stand as indicators of trouble and signs of panic.
As the economists noted a few days ago:
The potential costs of producing nothing, or too little too
slowly, include a financial crisis and a deep recession
spilling across the world.
Time is short, and I am not referring to the time until adjournment.
We must act because the crisis will grow worse with delay and because
the Treasury does not have unlimited authority or resources to continue
case-by-case rescues.
The current compromise agreement includes principles for which I have
pushed, including strong protections for taxpayers so it is very
unlikely that taxpayers will be on the hook for $700 billion. In fact,
there is a chance, with proper management of this program, that in some
cases the taxpayers could actually make a profit. The bill now includes
strong protections, curbs on excessive executive compensation,
including golden parachutes, and tough oversight and accountability.
We must act now. None of us wants to see the further devastating
consequences for our economy.
It also benefits from the addition of two new features. The first is
temporarily raising the deposit-insurance protection for bank and
credit-union customers from the current $100,000 per account per
institution to $250,000. This is important to reassure consumers about
the safety of the banking system in a time of turmoil, and to provide
added protection for people who feel obliged to move assets to safe
havens.
The second added feature is making the tax-extenders package that was
overwhelmingly approved by the Senate in September a part of this
stabilization package. Providing additional tax relief for individuals
and small businesses in a time of stress and rising prices is in itself
a step toward economic stability.
I am pleased to note that the tax provisions include energy-related
measures such as new language on application of the wood-stove credit.
We are not only providing general tax relief, but also targeted
measures that will encourage more use of renewable resources and reduce
our dependence on imported oil, whose increased cost aggravates the
other injuries from which our economy suffers.
This bipartisan financial-stabilization package, endorsed by our
congressional leadership and by both Presidential candidates, does not
eliminate the need to keep reasonable questions in mind. While
exchanging Treasury funds for currently depressed or unmarketable
mortgage-related assets would obviously be a powerful tool for freeing
the channels of credit and investment, many questions remain about how
the Government would ensure that mortgages and mortgage-backed
securities are carefully appraised so that taxpayers do not overpay or,
worse yet, stand liable for debts used to purchase currently
unmarketable assets; that the purchased assets are carefully managed;
and that taxpayers are adequately protected through such devices as
warrants or contingent equity interests in return for their financial
exposure.
The bill before us now includes a provision that addresses those
concerns in a comprehensive fashion. It directs the President, 5 years
after the Troubled Asset Relief Program takes effect, to evaluate the
ultimate cost, if any, to taxpayers, and to propose a program for
recovering any shortfall from the financial industry. Considering that
taxpayers may actually make money on the resale of troubled assets
purchased by the Treasury, this added level of protection seems to
insulate them from risk of losses.
The current upheaval in the financial markets certainly has created
great strain on the lives of families throughout the country as well as
our financial markets. And it threatens a terrible recession here and
around the world. The bill before us is not perfect, but it reflects a
consensus on the shape of an effective intervention, and it provides
robust provisions for accountability and taxpayer protection.
I urge my colleagues to join me in support of this carefully crafted
and urgently needed measure, and in my call for a thorough review of
our financial regulatory system so that the current crisis does not
occur again.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. I ask unanimous consent that the Senator from Rhode Island
be recognized for 6 minutes, the Senator from Pennsylvania for 5
minutes, and then my colleague and friend from New York for 6 minutes.
[[Page 23545]]
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Rhode Island.
Mr. REED. Madam President, first let me commend Senator Dodd for his
extraordinary leadership and also my colleagues Senators Conrad,
Baucus, Gregg, Schumer, Corker, Bennett, and our colleagues in the
House, particularly Barney Frank and Spencer Bachus. Last Thursday,
under the direction of Chairman Dodd, we worked on a bipartisan and
bicameral basis and sketched out the outline of the bill we have today.
We reacted to the blank check presented to us by the Treasury
Secretary. We provided detail. We provided oversight. We provided
protections for taxpayers. Now, this much-improved proposal has now
come to this floor for a vote. I hope we can support it.
We are in the midst of a terrible economic crisis. The American
people are justifiably outraged that they have been put in a position
where they must essentially contribute $700 billion to stabilize our
financial system and, indeed, the global financial system. They are
also outraged that this is the result of lax oversight over many years.
It is a result of indifference to the plight of homeowners and workers,
because they have seen very little in terms of real, tangible support
from this administration with respect to their problems and concerns,
such as making a decent living, educating their children, and providing
for health care for their families.
But we have to act, and we have to act decisively. Because what is
threatened here is the welfare not just of a few but of all Americans.
What is at stake is their financial welfare and their financial future.
It would be nice to say this proposal is a cure but, frankly, it is a
tourniquet for a hemorrhaging economy. If we don't apply this
tourniquet today, the chances of reviving the economy and restoring it
are diminished dramatically. I believe we must act along the lines
outlined by Senator Dodd and our colleagues in the Senate and the
House. If this problem were only restricted to Wall Street, this would
be a different bill. But every American feels the effect of this
financial crisis, from the value of their pensions, their investments,
and their overall wealth. It has spread beyond Wall Street and is
affecting Main Street and the credit markets that are so central to
everything we do. Auto sales are plummeting this month because credit
is difficult to obtain. That means our car companies are facing an
additional hurdle in terms of keeping thousands of Americans employed
in good jobs. The cost and availability of college loans will be
impacted if the credit crisis continues. The cost of small business
expansion will increase. There are homeowners who are rushing to
closings and discovering that the loan has been pulled because the
banks won't lend. Their affairs are in disarray. We have to act and we
have to act smartly.
What we have seen over the last several weeks and days is a
deterioration in the financial and credit markets, and we have to
counter that. The plan presented to us by the Secretary of the Treasury
was virtually a blank check: Give me $700 billion and I will take care
of things.
We would not accept such a blank check. We insisted, first, that
there be an oversight mechanism so the Secretary's actions were not the
only actions in terms of sound policy moving forward. Then we insisted,
at my suggestion and the suggestion of others, that we provide for an
equity interest that the taxpayers would receive in those companies
that participate in this program. There would be an equity
participation with warrants, so that taxpayers share in the recovery of
these companies, not just the shareholders and executives of these
companies. That is not only fair, it is sensible. When you assume risk
on Wall Street, you get paid to do so. The American taxpayers deserve
their share from the risk they are bearing. This is an improvement.
In addition, we addressed an issue that is critical to all
hardworking Americans; that is, imposing restraints on excessive
compensation of some executives.
However, we have to do much more. In fact, as soon as we conclude
this debate, Chairman Dodd will organize hearings so that we can get on
with another fundamental responsibility--the restructuring of the
regulatory framework for banking and finance. Part of that includes
reviewing executive compensation and ensuring that shareholders have a
say in compensation decisions. That is just one aspect of an elaborate
agenda of reform that has to be undertaken. To stop now and simply
provide support to the current crisis without a refinement and a
rebalancing of our regulatory structure would be a terrible
miscalculation on our part. We have to move forward.
In addition to the efforts underway today, we have to renew our focus
in providing an approach to regulation that is sensible, sound, and
does not interfere with innovation and ingenuity, but does not result
in the indifference and lack of oversight that is a large part of this
problem.
There are other aspects within this bill we need to address. First,
there is language with respect to mark-to-market accounting rules. What
we have done is affirmed the SEC's authority to enforce proper
accounting practices. I hope, in response to this crisis, that we do
not abandon the principle of mark-to-market accounting rules.
Essentially what some people are urging is that we cook the books
because we have a huge problem. In other words, let's make it go away
with accounting techniques. That is how we got into this situation. To
use that approach is adding, in my view, insult to injury. I hope we
can maintain strong accounting standards and work our way through this
problem without sacrificing these standards.
There is something else we have to recognize. We have to do more to
help Americans who are facing foreclosure. It is only through helping
the homeowners that we will we get to the bottom of the crisis.
I thank the chairman for his kindness and leadership on this bill.
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. McCONNELL. Madam President, less than 2 weeks ago, the Treasury
Secretary came to the American people with some bad news. He said he
needed Congress to help. And soon, after significant debate, Congress
will deliver.
The problem we face as a Nation is urgent and unprecedented. As a
result of lax lending practices earlier in the decade, millions of
Americans now find themselves either delinquent or unable to cover
their mortgages.
If this were the only problem, we could address it individually by
helping those who were victims of fraud and letting those who made bad
judgments or who lied on their loan applications pay for their
mistakes.
But what began as a problem in the subprime mortgage market has now
spread throughout the entire economy. And here is where the crisis hits
home.
After banks made these risky mortgages, they sold them. The
institutions they sold them to then shopped them around the world. And
now these troubled assets are frozen on the balance sheets of the
businesses that you and I rely on to buy everything from dishwashers to
new homes.
At the heart of the rescue plan is a need to lift these assets off
the books and to restore confidence in the institutions that hold them.
Then, once the housing market stabilizes, we will sell them back.
Many economists, including those at the nonpartisan Congressional
Budget Office, predict that once the assets are sold off over the next
few years, the net loss to taxpayers could be negligible.
But for now, the practical problem we face is this: credit, the
lifeblood of our economy, is frozen. And unless we act, it is expected
to remain that way.
This means that the lives of ordinary American families could be
severely disrupted, commerce could dry up, and millions of jobs could
be lost.
The original White House proposal for addressing this crisis was
unacceptable to Members on both sides in its initial form. But both
parties have since made sure that the taxpayers are protected once a
final deal is reached.
For my part, I came to the Senate floor and put down a firm marker:
if
[[Page 23546]]
Congress was going to help companies that got us into this mess, then
executives at these companies would play by our rules. I also said that
the Government wouldn't be allowed to use this plan as an excuse to
fund new programs: No golden parachutes, limits on executive pay, and
no favors for special interests.
Thanks to bipartisan insistence on all of these points, the plan that
the House voted on earlier this week included every single one of our
initial demands. And so does the plan that the Senate will vote on
tonight.
This process hasn't been easy.
For the past week, Members of Congress and their staffs have worked
around the clock to craft a rescue plan that is designed to protect
American families from the shockwaves of the credit crisis.
When that plan failed in the House, we picked up the pieces, and we
put together an even better plan that we think will make it through the
House, and onto the President's desk this week.
It is important that we act now, because the crisis is spreading.
Small business owners in Kentucky are writing urgent letters to my
office saying that their interest rates are already skyrocketing and
putting their businesses--and employees' jobs--at risk.
A woman in central Kentucky wrote that she is afraid she will have to
sell off part of her family's farm.
A retired school counselor wrote to say she can't afford to see her
small retirement savings vanish.
A small business owner in La Grange told me he might not be able to
make payroll because, in just the past week, the interest rate on the
loan he took out to finance his building more than tripled.
The current crisis may have its roots in the actions of a few. But
its effects could potentially reach into every single home in Kentucky,
and every other home in America.
This economic rescue plan is a necessary effort to protect the vast
majority of Americans--whose day-to-day lives depend on ready access to
credit--from the misdeeds of Wall Street. And at this point, doing
nothing to prevent an economic collapse is no longer an option.
Here is what the second largest newspaper in America, the Wall Street
Journal, said about the rescue plan earlier this week: ``It deserves to
pass because in reality it is an attempt to shield middle America from
further harm caused by the mistakes of Wall Street and Washington.''
``The current seizure in the credit markets is real,'' the Journal
added, ``and it will do far more harm if not repaired soon.''
For lawmakers, failing to pass this economic rescue plan would be
grossly irresponsible. The voters sent us to Washington to respond to
crises, not to ignore them. To that end, we have acted swiftly. And
lawmakers from both political parties have worked hard to protect
taxpayers at the beginning and at the end of this plan.
Thanks to our insistence, this rescue plan will have strong Federal
oversight. Not only will there be a strong and diverse executive
oversight board watching every single transaction, but we will also
have the ability to investigate, pursue, and punish any executive who
engages in fraud or who attempts to use this plan for personal
enrichment.
If the Government is forced to take over the biggest companies, the
first thing we will do is wipe out existing compensation packages for
failed executives. Then, we fire them.
For most other institutions we assist, failed executives will no
longer get million dollar payouts. And those who previously negotiated
severance packages will pay one fifth of them in taxes--on top of the
standard 30 to 40 percent tax currently in place. This means that
executives at these firms will have to hand over more than half of
their existing pay packages to the taxpayer.
Moreover, no executive who hasn't already worked out a compensation
package will be allowed to get one. At these companies, the days of
golden parachutes are over.
As another way of protecting taxpayers, Republicans insisted early on
that every dollar the government gets back as a result of this program
goes directly to reduce the Federal debt. This plan guarantees it.
Every dime we get back will be used to pay our debts.
Since Monday's House vote, we have made some significant improvements
to the bill. In order to protect bank customers, Congress will allow
the Federal Deposit Insurance Corp. to insure deposits up to $250,000
for 1 year, up from the current $100,000.
We also added significant tax relief for American families and
businesses, including a temporary patch on the AMT middle class tax
that will protect millions of Americans--including 135,000
Kentuckians--from an average $2,000 increase in their annual tax bill.
At the moment, this plan represents the best way to bring stability
to the credit markets, avoid a credit meltdown, and put America on the
road to economic recovery. But Congress's job does not end there. After
completing this bipartisan effort, Members of Congress must recommit
ourselves in strengthening America's long-term economic security.
We should refocus our attention on a balanced energy plan that
enables us to find more American energy resources and use less, and by
refusing to spend money we do not have on programs that we do not need,
thus laying a strong economic foundation for our children to inherit.
Soon, Senators will cast this historic vote. And when we do, the
American taxpayers should know this: This plan was written with their
best interests in mind. Not a dime will be spent without strict
oversight. Failed executives will be held accountable. No more golden
parachutes. In the end, the American people can expect to recoup most,
if not all, or even more of the money that is spent.
The legislation is not something any of us really wanted to consider.
Under ordinary circumstances, high-flying businessmen who make bad
decisions or abuse shareholder trust should be allowed to fail. But the
situation we find ourselves in is serious, it is urgent, and failing to
act now would have devastating consequences for our Nation's economy.
We must contain the damage. The potential consequences of inaction for
our Main Street economy are simply too great.
Madam President, I also wish to mention that as of earlier today,
there were--I have a list of 106 groups supporting the rescue package.
I would mention two that I think are noteworthy: the AARP and the
Heritage Foundation. That pretty well sums up the broad ideological
diversity, shall I say, of the organizations that support this rescue
package. I ask unanimous consent to have that list printed in the
Record at the end of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. McCONNELL. Also, Madam President, I would say to my conservative
friends who had reservations about this, the National Review supports
this package. I mentioned that the Heritage Foundation supports the
package. With mixed levels of enthusiasm, the columnists Charles
Krauthammer and George Will would support the package. Larry Kudlow,
the conservative commentator on CNBC, supports the package. Of course,
the Wall Street Journal supports the package. Even Newt Gingrich, an
early critic, said, when pressed a couple days ago, if he were here he
would vote for the package.
So, Madam President, with that, I yield the floor.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Groups Supporting a Bi-Partisan Financial Rescue Package
1. AARP
2. Air Conditioning Contractors of America
3. Air Transport Association of America
4. Alliance of Automobile Manufacturers
5. Aluminum Association
6. American Apparel and Footwear Association
7. American Bankers Association
8. American Boiler Manufacturers Association
9. American Business Conference
10. American Chemistry Council
11. American Concrete Pressure Pipe Association
[[Page 23547]]
12. American Council of Life Insurers
13. American Electronics Association
14. American Electric Power
15. American Financial Services Association
16. American Forest & Paper Association
17. American Hotel & Lodging Association
18. American Institute of Architects
19. American Land Rights Association
20. American Land Title Association
21. American Meat Institute
22. American Rental Association
23. American Resort Development
24. American Society of Appraisers
25. American Trucker Association
26. Americans for Prosperity
27. Appraisal Institute
28. Associated Builders and Contractors
29. Associated Equipment Distributors
30. Associated General Contractors
31. Association for Manufacturing Technology
32. Association of American Railroads
33. Association of Equipment Manufacturers
34. Association of International Automobile Manufacturers
35. Business Council for Sustainable Energy
36. Building Owners and Managers Association, International
37. Business Roundtable
38. California Chamber of Commerce
39. Consumer Bankers Association
40. Consumer Mortgage Association
41. Consumer Mortgage Coalition
42. CTIA--the Wireless Coalition
43. Duke Energy
44. Edison Electric Institute
45. Equipment Leasing and Finance Association
46. Farm Bureau
47. Financial Services Forum
48. Financial Services Roundtable
49. Food Marketing Institute
50. Ford
51. Heritage Foundation
52. Housing Policy Council
53. Independent Community Bankers of America
54. Independent Electrical Contractors
55. Independent Petroleum Association of America
56. Information Technology Industry Council
57. International Council of Shopping Centers
58. International Dairy Foods Association
59. International Franchise Association
60. International Paper
61. Investment Company Institute
62. Manufacture Housing Institute
63. Microsoft
64. Minority Business Roundtable
65. Mortgage Bankers Association
66. NASDAQ
67. National Apartment Association
68. National Association of Counties
69. National Association of Chain Drug Stores
70. National Association of Electrical Distributors
71. National Association of Federal Credit Unions
72. National Association of Home Builders
73. National Association of Industrial and Office
Properties
74. National Association of Manufacturers
75. National Association of Plumbing, Heating and Cooling
Contractors
76. National Association of Real Estate Investment Managers
77. National Association of Real Estate Investment Trusts
78. National Association of Realtors
79. National Association of Wholesaler-Distributors
80. National Automobile Dealers Association
81. National Black Church Initiative
82. National Education Association
83. National Electrical Contractors Association
84. National Federation of Independent Business
85. National League of Cities
86. National Lumber and Building Materials Dealers
Association
87. National Multi Housing Council
88. National Restaurant Association
89. National Retail Federation
90. National Roofing Contractors Association
91. National Rural Electric Cooperative Association
92. NPES--The Association of Suppliers of Printing,
Publishing and Converting Technologies
93. Moran Industries
94. Printing Industries of America
95. Real Estate Roundtable
96. Reinsurance Association of America
97. Retail Industry Leaders Association
98. Savings Coalition
99. Securities Industry & Financial Markets Association
100. Semiconductor Industry Association
101. Software & Information Industry Association
102. Technet
103. US Chamber of Commerce
104. US Telecom
105. Verizon
106. Whirlpool
The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. CASEY. Madam President, thank you very much.
I rise today to talk for a few moments about the emergency economic
stabilization bill.
First of all, I commend the work of a number of people here, but in
particular Chairman Dodd, who did not want this assignment, had a tough
assignment to work with people in both parties in both Houses to get
this done. We have a lot more work to do after this, but I commend him
for his work and for his leadership under very difficult circumstances.
There are a lot of ways to describe the challenge we face in America
today economically and many ways to describe what we have to get done,
what we are going to vote on tonight. I think if you could boil it down
to one word or a couple of words, it would be--one word would be
``credit,'' or lack of credit. I think that is the basic problem. The
freezing or seizing up of credit markets is not some far-off economic
concept. That means small businesses in Pennsylvania and across the
country cannot have access to credit to meet payroll and to hire people
and to grow the economy. Probably half of our economy is small
business, if not more. It means that families, when they go to finance
an education, higher education, or when they go to purchase an
automobile or something for their home, they cannot get access to
credit.
We live on credit, and thank God we have it. But that system we rely
upon, that families rely upon, is put at risk now because of what has
happened lately. We can spend a lot of time figuring out why this
happened, and we should after the debate is over. But right now, we
have to act.
One headline does not tell the whole story, but it gave me a sense of
what was going on. This is from USA Today on Monday, September 29. The
headline reads: ``Tight credit costs small-business owners.'' In one
headline, I think it encapsulated the challenge this problem is for our
economy.
I think I am seeing it not just in headlines and anecdotes about what
is happening to people who own small businesses across the country; we
are all seeing it, as well, in the unemployment rate, in the job loss
across America, which I would argue, as bad as it is now--and a lot of
families have been living in this recession. I don't care what the
economists say, when you are paying higher prices for gasoline and food
and education and health care and everything in the life of a family
goes up, you are in a recession.
I think in the last couple of weeks we have seen a terrible downturn
in the job market. In Pennsylvania, for example, between July and
August of this year--and this does not even include September, where
the numbers will be a lot worse--just in 1 month, we lost 31,000 jobs
in Pennsylvania. This is not just in Philadelphia, with a little more
than 21,000 jobs lost, or in Pittsburgh, with 7,700 jobs lost; I am
talking about smaller communities as well. In Johnstown, PA, a small
labor market on this list, they lost 500 jobs in 1 month. In Altoona,
PA--again, right next door to Johnstown, a small market--500 jobs lost
in 1 month. Again, none of this includes the month of September. So we
are seeing it everywhere in our State. If small businesses cannot grow
and cannot have access to credit, they are not going to create the jobs
we need.
One more statistic, and then I will wrap up. The Pennsylvania
foreclosure rate in August 2007 versus August 2008 went up 60 percent.
So even in a State that has been relatively--relatively--free of some
of the trauma that Nevada and California and Florida and some other
States have been hit with, even in Pennsylvania that foreclosure rate
is going up at a rate much higher than the national average.
So what is this bill about? We have heard a lot about the description
of it. I do not believe it is a bailout. We can debate what that means.
I do not believe it is. I think it is a bill to stabilize our economy
and our businesses and our families.
But there are a lot of taxpayer protections built into this
legislation that were not there when we started: taxpayer warrants, as
Senator Jack Reed talked about today; reimbursements,
[[Page 23548]]
so at the end of the road 5 years from now, if taxpayers have not
gotten what they deserve, these companies that might benefit will have
to reimburse; very tough oversight, several levels of oversight.
We do not have time to go into all of them, but there is a special
inspector general to crack down on what is happening when this program
is implemented. There are limits on CEO and executive pay. It is the
first time in American history that we have limited or put some
restrictions on that pay. There are foreclosure prevention strategies,
an expansion of the HOPE for Homeowners.
This is good legislation which we are making even stronger.
Finally, what we have to do after this is over, as important as this
legislation is, is we have to get to work on regulation. We have to not
just implement the right policies to regulate in a way we did not
regulate before in America, but also, once those regulations are in
place, we need to have people in Washington who are willing to crack
heads--figuratively, of course--on those who abuse the public trust,
those who abuse the rules and get people into mortgages, for example,
they cannot pay for.
Finally, we have to make sure, in the months ahead and the years
ahead, we invest in the long-term economy, invest in health care and
education, the skills of our workers, to build a strong economy not
just for this year and next year but for the next generation.
But in the end, this legislation we are voting on tonight is about
credit. We are either going to do something about it and allow people
to have access to credit or not. I think we have to act, and we have to
act promptly.
Madam President, I yield the floor.
The PRESIDING OFFICER. The Senator from Louisiana.
Mr. VITTER. Madam President, I ask unanimous consent, with Senator
DeMint's permission, that he and I be switched in order in the
unanimous consent roster.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. VITTER. Thank you, Madam President.
Madam President, 12 days ago we were struck by two bolts almost out
of the blue: the suggestion that our financial system was on the verge
of collapse and a proposal under which unprecedented power, discretion,
and taxpayer dollars would be given to the Federal Government
essentially in the form of one person--the Treasury Secretary--to
intervene in the market.
There have since been many amendments to this plan and much talk
about taxpayer protection--all of it well intended, thoughtful window
dressing. So make no mistake, if Congress passes this bill, it will be
passing, 12 days later, an unprecedented expansion of Government power
and discretion along with $700 billion of hard-earned taxpayer funds.
After listening to many people I deeply respect, including thousands
of hard-working Louisianians, I will--indeed, I must--vote no. I will
not vote no because I do not think we face very serious economic
challenges. We do. Credit is drying up, and that presents a real threat
to all Americans. I will not vote no because I do not think the Federal
Government needs to act. It does, as soon as responsible action is
possible. I will vote no because we do not need to use $700 billion of
hard-earned taxpayer money in this way, cross this line, set this
precedent.
We need to stabilize the market and increase liquidity, not replace
the market with unprecedented Government intervention at taxpayer risk
and expense. We need to minimize the pain on average Americans who did
nothing wrong, not wipe it away from politicians, lenders, and, yes,
some borrowers who did plenty wrong who were plenty reckless.
My fundamental concerns with this plan are only heightened by the
fact that to implement it, tens of thousands of judgment calls will
have to be made as to what to buy and for how much. Those judgment
calls will be made by whom? Teams of new bureaucrats who came from Wall
Street and who want to go back there. That ensures bias and even
corruption.
My deep general unease is only fueled by the fact that there has been
no real discussion of the fundamental, long-term reforms that are
needed--breaking up Fannie Mae and Freddie Mac, demanding real money
down for all home purchases, and establishing aggressive, progrowth tax
and economic policy. What is worse, there has probably been no real
discussion of this because neither this Congress nor the one about to
be elected will pass any of it.
A week ago, I may have voted in anger. Although that is still there,
I act now with a profound sense of sadness and disappointment because
this unprecedented expansion of Government intervention at taxpayer
expense is the product of an appalling lack of political leadership--
first, crying fire in a crowded movie theater, then demanding that the
only escape is to take dangerous action like tearing down the walls
though there are plenty of exit doors in sight.
I truly pray that much of what I have said is proven wrong. I will
try very hard to do just that myself, particularly in terms of the next
step, by working tirelessly to pass the fundamental reforms we need so
that a repeat of this mess--however much a repeat is actually
encouraged by this bailout--never happens again. However we vote on
this first step, I hope we can come together on the next step in terms
of meeting that challenge: passing the fundamental reforms we need. In
that spirit, I ask the leaders of this Congress to call this Congress
back this year immediately following the election to do just that.
Now is the time to enact real solutions that grow our economy,
develop small businesses, and increase opportunities for all Americans.
Now is the time to reform the misguided Government policies that caused
this mess in the first place. And now is the time to stop knee-jerk
political reactions and focus on real solutions to secure our Nation's
future, not just for next week but for our next generation.
Madam President, I yield back the floor.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Madam President, for how long would the Senator from
Illinois like to be recognized?
Mr. OBAMA. Madam President, 6, 7 minutes.
Mr. DODD. I am in control of the time. How much time?
Mr. OBAMA. Madam President, 10 minutes.
Mr. DODD. Madam President, I yield the Senator from Illinois 10
minutes.
The PRESIDING OFFICER. The Senator from Illinois is recognized for 10
minutes.
Mr. OBAMA. Thank you very much, Madam President. I thank the
distinguished Senator from Connecticut not only for yielding time but
also for the extraordinarily hard work he has put in over the last
several days and, in fact, over a week. And I want to thank his
counterparts on the other side, including Senator Gregg, for their hard
work.
The fact that we are even here voting on a plan to rescue our economy
from the greed and irresponsibility of Wall Street and some in
Washington is an outrage. It is an outrage to every American who works
hard, pays their taxes, and is doing their best every day to make a
better life for themselves and their families. Understandably, people
are frustrated. They are angry that Wall Street's mistakes have put
their tax dollars at risk, and they should be. I am frustrated and
angry too.
But while there is plenty of blame to go around and many in
Washington and Wall Street who deserve it, all of us--all of us--have a
responsibility to solve this crisis because it affects the financial
well-being of every single American. There will be time to punish those
who set this fire, but now is not the time to argue about how it got
set, or whether the neighbor smoked in his bed or left the stove on.
Now is the time for us to come together and to put out that fire.
When the House of Representatives failed to act on Monday, we saw the
single largest decline in the stock market in two decades. Over $1
trillion of
[[Page 23549]]
wealth was lost by the time the markets closed. It wasn't just the
wealth of a few CEOs or Wall Street executives; the 401(k)s and
retirement accounts that millions count on for their family's future
became smaller. The State pension funds of teachers and government
employees lost billions upon billions of dollars. Hard-working
Americans who invested their nest egg to watch it grow saw it diminish
and, in some cases, disappear.
But while that decline was devastating, the consequences of the
credit crisis that caused it will be even worse if we do not act now.
We are in a very dangerous situation where financial institutions
across this country are afraid to lend money. If all that meant was the
failure of a few banks in New York, that would be one thing. But that
is not what it means. What it means is if we don't act, it will be
harder for Americans to get a mortgage for their home or the loans they
need to buy a car or send their children to college. What it means is
businesses will not be able to get the loans they need to open a new
factory or make payroll for their workers. If they can't make payroll
on Friday, then workers are laid off on Monday. If workers are laid off
on Monday, then they can't pay their bills or pay back their loans to
somebody else. It will go on and on and on, rippling through the entire
economy. Potentially, we could see thousands of businesses close;
millions of jobs could be lost, and a long and painful recession could
follow.
In other words, this is not just a Wall Street crisis, it is an
American crisis, and it is the American economy that needs this rescue
plan. I understand completely why people would be skeptical when this
President asked for a blank check to solve this problem. I was, too, as
was Senator Dodd and a whole bunch of us here. That is why, over a week
ago, I demanded that this plan include some specific proposals to
protect taxpayers--protections that the administration eventually
agreed to, and thanks to the hard work of Senator Dodd and Republican
counterparts such as Senator Gregg, we in the Senate have agreed to,
and now, hopefully, the House will agree to as well.
Let me go over those principles. No. 1, I said we needed an
independent board to provide oversight and accountability for how and
where this money is spent at every step of the way. No. 2, I said we
cannot help banks on Wall Street without helping the millions of
innocent homeowners who are struggling to stay in their homes. They
deserve a plan too. No. 3, I said I would not allow this plan to become
a welfare program for Wall Street executives whose greed and
irresponsibility got us into this mess.
Finally, I said that if American taxpayers are financing this
solution, then they have to be treated like investors. They should get
every penny of their tax dollars back once the economy recovers.
This last part is important because it has been the most
misunderstood and poorly communicated part of this plan. This is not a
plan to just hand over $700 billion of taxpayer money to a few banks.
If this is managed correctly--and that is an important ``if''--we will
hopefully get most or all of our money back, and possibly even turn a
profit, on the Government's investment--every penny of which will go
directly back to the American people. If we fall short, we will levy a
fee on financial institutions so that they can repay us for the losses
they caused.
Now, let's acknowledge, even with all these taxpayer protections,
this plan is not perfect. Democrats and Republicans in Congress have
legitimate concerns about it. Some of my closest colleagues--people I
have the greatest respect for--still have problems with it and may
choose to vote against this bill, and I think we can respectfully
disagree. I understand their frustrations. I also know many Americans
share their concerns. But it is clear, from my perspective, that this
is what we need to do right now to prevent a crisis from turning into a
catastrophe.
It is conceivable, it is possible, that if we did nothing, everything
would turn out OK. There is a possibility that is true. And there is no
doubt there may be other plans out there that, had we had 2 or 3 or 6
months to develop, might be even more refined and might serve our
purposes better. But we don't have that kind of time and we can't
afford to take that risk that the economy of the United States of
America--and, as a consequence, the worldwide economy--could be plunged
into a very deep hole.
So to Democrats and Republicans who have opposed this plan, I say:
Step up to the plate. Let's do what is right for the country at this
time because the time to act is now.
I know many Americans are wondering what happens next. Passing this
bill can't be the end of our work to strengthen our economy; it must be
the beginning. Because one thing I think all of us who may end up
supporting this bill understand is that even if we get this in place,
we could still have enormous problems--and probably will have big
problems--in the economy over the next several months and potentially
longer. Because the fact is, we have had mismanagement of the
fundamentals of the economy for a very long time, and we are not going
to dig ourselves out of this hole immediately. So this is not the end;
this is the beginning.
As soon as we pass this rescue plan, we need to move aggressively
with the same sense of urgency to rescue families on Main Street who
are struggling to pay their bills and keep their jobs. They have been
in crisis a lot longer than Wall Street has. I have said it before and
I say it again: We need to pass an economic stimulus package that will
help ordinary Americans cope with rising food and gas prices, that can
save 1 million jobs by rebuilding our schools and roads and our
infrastructure, and help States and cities avoid budget cuts and tax
increases. A plan that would extend expiring unemployment benefits for
those Americans who lost their jobs and cannot find new ones. That is
the right thing to do at a time when consumer confidence is down and we
are in great danger of slipping into a big recession.
We also must do more than this rescue package in order to help
homeowners stay in their homes. I will continue to advocate bankruptcy
reforms. I know my colleague from Illinois, Dick Durbin, has been a
strong champion of this, as have many others. It is the right thing to
do, to change our bankruptcy laws so that people have a better chance
of staying in their homes, and so we don't see communities devastated
by foreclosures all across the country. We should encourage Treasury to
study the option of buying individual mortgages as we did successfully
in the 1930s. Finally, while we all hope this rescue package succeeds,
we should be prepared to take more vigorous actions in the months ahead
to rebuild capital if necessary.
Just as families are planning for their future in tough times,
Washington is going to have to do the same. Runaway spending and record
deficits are not how families run their budgets; it can't be how
Washington handles people's tax dollars. So we are going to have to
return to the fiscal responsibility we had in the 1990s. The next White
House and the next Congress are going to have to work together to make
sure we go through our budget, we get rid of programs that don't work
and make the ones we do need work better and cost less.
With less money flowing into the Treasury, some useful programs or
policies might need to be delayed. Some might need to be stretched out
over a longer period of time. But there are certain investments in our
future we cannot delay precisely because our economy is in turmoil.
Mr. President, I have exceeded the time a little bit. I ask unanimous
consent for a couple more minutes.
Mr. DODD. I ask unanimous consent that the Senator have as much time
as he would like to have.
The PRESIDING OFFICER (Mr. Pryor). Without objection, it is so
ordered.
Mr. OBAMA. Mr. President, there are certain investments in our future
that we can't delay precisely because the economy is in turmoil. We
can't wait to help Americans keep up with rising costs and shrinking
paychecks, and we
[[Page 23550]]
are going to do that by making sure we are giving our workers a middle-
class tax cut. We can't wait to relieve the burden of crushing health
care costs. We can't wait to create millions of new jobs by rebuilding
our roads and our bridges, by investing in broadband lines in rural
communities, and by fixing our electricity grid so we can get renewable
energy to population centers that need them. We need to develop an
energy policy that prevents us from sending $700 billion a year to
tyrants and dictators for their oil. We can't wait to educate the next
generation of Americans with the skills and knowledge they need to
compete with any workers, anywhere in the world. These are the
priorities we cannot delay.
Let me close by saying this: I do not think this is going to be easy.
It is not going to come without costs. We are all going to need to
sacrifice. We are all going to need to pull our weight because, now
more than ever, we are all in this together. That is part of what this
crisis has taught us, that at the end of the day, there is no real
separation between Wall Street and Main Street. There is only the road
we are traveling on as Americans. We will rise or fall on that journey
as one Nation and as one people.
I know many Americans are feeling anxiety right now about their jobs,
about their homes, about their life savings. But I also know this: I
know we can steer ourselves out of this crisis. We always have. During
the great financial crisis of the last century, in his first fireside
chat, FDR told his fellow Americans that:
There is an element in the readjustment of our financial
system more important than currency, more important than
gold, and that is the confidence of the people themselves.
Confidence and courage are the essentials of success in
carrying out our plan. Let us unite in banishing fear.
Together, we cannot fail.
We cannot fail. Not now, not tomorrow, not next year. This is a
nation that has faced down war and depression, great challenges and
great threats, and at each and every moment, we have risen to meet
these challenges--not as Democrats, not as Republicans, but as
Americans, with resolve and with confidence; with that fundamental
belief that here in America, our destiny is not written for us, it is
written by us. That is who we are, and that is the country I know we
can be right now.
So I wish to thank again the extraordinary leadership of Chairman
Dodd and the Banking Committee, as well as Chairman Baucus and Majority
Leader Reid. They have worked tirelessly. I also wish to thank the
leadership in the House of Representatives.
I urge my colleagues to join me in supporting this important
legislation, understanding that this will not solve all our problems.
It is a necessary but not sufficient step to make sure this economy,
once again, works on behalf of all Americans in their pursuit of the
American dream.
Thank you. I yield the floor.
Mr. DODD. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. DODD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DeMINT. Mr. President, I have friends and colleagues whom I
respect deeply who are on all sides of this bailout issue. One of them
just spoke. We all to want do what is right for America, and I believe
those who have crafted this plan had pure and noble motives. They want
this country to succeed. They want prosperity. I just do not believe
that this bill gets the job done. In fact, in the long term, I am
convinced it will do more harm than good.
We are the Nation that has been called the bastion of freedom, and we
are the Nation that has sacrificed blood and treasure to share that
freedom with the world. We have fought communism, dictators, and
tyranny. We have helped establish democracies and free-market economies
across the globe. Because of America, millions of people are now
electing their leaders, and millions have been taken out of poverty and
enjoyed prosperity. Yet as the blood of our young men and women falls
on foreign soil in the defense of freedom, our own Government appears
to be leading our country into the pit of socialism.
We have seen this Government socialize our education system and make
our schools among the worst in the world. We have seen this Government
take over most of our health care system, making private insurance less
and less affordable. We have seen this Government socialize our energy
resources and bring our Nation to its knees by cutting the development
of our own oil and natural gas supplies. And now we see this Congress
yielding its constitutional obligations to a Federal bureaucracy,
giving it the power to control virtually our entire financial system.
Americans understand this and they are angry. They are our judge and
our jury. They are watching what we are doing, and they will render
their verdict based on our actions.
If we were honest with the American people and explained the failures
that have led to this financial crisis, we might have the credibility
to ask our citizens to allow us to borrow another $700 billion in their
name to try to fix this problem. But we are not being honest. This
problem was not created by our free enterprise system. It was created
by us, the Congress and the Federal Government.
With good intentions, we made a mess of things. We wanted our economy
to grow faster, so we allowed the Federal Reserve to create easy and
cheap credit. But this allowed people to borrow and lend irresponsibly.
We wanted to help the poor, so we forced banks to make loans to people
who could not afford to pay them back. We wanted every American to own
a home, so we created Fannie Mae and Freddie Mac to encourage and
guarantee mortgages for more people who could not afford them. And all
of these easy mortgages, many of which required no downpayment,
inadvertently increased the prices of homes to unsustainable levels and
created a massive oversupply of unsold homes. Now the value of homes
has fallen, as has the value of the mortgages attached to them.
We allowed and even encouraged Fannie Mae and Freddie Mac to bundle
up these risky subprime mortgages so they could be sold as securities
to investors in America and all over the world. We guaranteed these
institutions with the full faith and credit of the Government so their
securities could be sold at above-market rates, allowing them to borrow
huge amounts and fuel an explosion in subprime mortgage lending. We
also allowed these mortgage giants to use their taxpayer-supported
profits to spend over $200 million lobbying Congress to keep us quiet,
even when we saw that our brainchild had become a financial
Frankenstein.
All of our good intentions are now blowing up in our face, and we are
asking the American people to bail us out. We must also plead guilty to
other misguided policies that have made the situation even worse. Our
foolish energy policies have created a huge financial burden on every
American family and severely damaged our economy. By not opening our
own energy supplies, we are now sending nearly $700 billion a year to
other countries to buy oil. This has dried up capital at home and made
us dependent on foreign countries for our credit.
We have also squandered and wasted hundreds of billions of hard-
earned tax dollars on unnecessary and ineffective Federal programs and
thousands of wasteful earmarks. Last week, we passed a bill with the
highest rate of pork spending in history. While our talk of gloom and
doom has heightened the financial panic here and around the world, and
while we are asking Americans to bail us out, we are still spending
money as if there is no tomorrow. Years of wasteful spending and bad
policies have resulted in a huge national debt of nearly $10 trillion.
Much of this debt is held by China and Saudi Arabia and other foreign
countries that some now say are dictating our financial policies.
We know Americans are now the victim of our misguided good
intentions,
[[Page 23551]]
along with our free enterprise system that has been severely damaged
and weakened. We know our bad policies have taken the accountability
out of our markets by artificially insulating investors from normal
risk. This has led to careless lending, careless investing, many bad
decisions, and possible criminal activity on Wall Street. While many
are blaming Americans and our free enterprise system for the crisis, we
know the Government is the root cause of this crisis.
I believe this Congress should admit its guilt, prove we have learned
from our mistakes, and correct the bad policies immediately that have
caused these problems. We should insist the Federal Reserve end the
easy money policy. We should repeal the laws that require our banks to
make risky loans, and fix the accounting requirements that force banks
to undervalue their assets. We should develop a plan to break up Fannie
Mae and Freddie Mac and sell them to private investors who will run
them as private companies.
We should reduce corporate and capital gains taxes to encourage
capital formation and boost asset values. We should also repeal the
section of Sarbanes-Oxley that has driven billions of dollars of
capital overseas. And we should do even more to grow our economy and
lessen our dependence on foreign countries. We should immediately pass
a law that expedites the development of our oil and natural gas
reserves to help relieve the burden of high prices and gas shortages
for our families.
We should immediately adopt a freeze on nonsecurity discretionary
spending and pass a moratorium on earmarks until we fix this wasteful
and corrupting system. We should sacrifice our political pork as we ask
taxpayers to sacrifice for our mistakes.
We have caused a terrible financial mess, and we must honestly tell
the American people that whether we pass this huge bailout or not,
there will likely be suffering and pain for our great country. But
Americans and our free market economy are resilient. And with fewer
misguided laws and less onerous regulations, we will get through this
crisis, as Americans have many times before. But we must tell Americans
the truth.
Congress says it was deregulation and capitalist greed that has run
wild and undermined our financial system. Instead of reducing our role
in the economy, we are trying to use this crisis to expand our power to
control and manage the free enterprise system. We are here saying that
our banks and mortgage companies have stopped lending money, that
people can't get loans to buy cars, homes, or to run a business, and
that our economy of the United States is on the verge of collapse.
We are telling people not to worry because we are going to rescue
them with their own money. Congress is going to allow the Treasury
Secretary to take $700 billion from taxpayers to buy bad loans and
investments from anyone he chooses anywhere in the world. This, we say,
will free up capital, get the credit markets working again, and put our
economy back on track.
But this Congress refuses to change our Nation's monetary policy that
created the cheap money and inflated the housing bubble. We refuse to
change the accounting laws and regulations, even though they are making
the problem worse. We refuse to lower capital gains and other taxes to
attract capital and promote growth. We refuse to repeal Sarbanes-Oxley,
even though it hasn't worked and it has cost our economy billions. And
we refuse to expedite the development of America's energy resources,
even though it would help every American and grow our economy.
None of these things are even on the table for discussion. We are
telling the American people to hand over $700 billion or the world
economy is going to collapse. This is why people are so upset. It is
because Congress is being dishonest and arrogant. We are not being
honest with them about how we got into this mess, and we are not being
honest with them about what we need to get out of it.
I strongly oppose this legislation. It takes our country in the wrong
direction. It forces innocent taxpayers to bail out Government policies
and Wall Street mistakes. It asks the American people to take a leap of
faith and trust people who have consistently misled them.
I am deeply saddened by the tone of this debate. I am afraid many of
the supporters of this bill have bullied people into supporting it,
using fear. There may be good reason for fear, but I think most people
will agree that some of the statements have been reckless and
irresponsible. I hope I am wrong and this bill will truly solve the
problem.
Let me say again that I know every one of my colleagues is doing what
they believe is right for America. But based on what I know, I cannot
in good conscience support it. I know the Senate is going to pass it
tonight, and I can only hope the House will defeat it so we can pursue
better alternatives.
I thank the Chair, and I yield the floor.
The PRESIDING OFFICER (Ms. Cantwell). The Senator from Michigan.
loan transfer rights
Mr. LEVIN. Madam President, large numbers of mortgages acquired by
the Government under this proposal are going to need to be modified.
Large numbers of mortgages are going to need to be refinanced. If it
becomes useful to hire outside companies that have the expertise and
technology ready to work with borrowers and financial institutions to
modify or refinance mortgages, it is important that the Government have
the authority to do so.
Is it your understanding that Treasury, the FDIC, or whomever
Treasury selects to manage the residential mortgage loans the
Government purchases, has the authority to enter into contracts with
private companies on a competitive basis to facilitate loan
modifications or facilitate refinancings, should the Government decide
to do so?
Mr. DODD. Yes, under current law and under the provisions in this
bill, that authority exists.
Mr. LEVIN. Does Treasury have the authority to transfer the servicing
rights to any modified or refinanced loan?
Mr. DODD. Yes.
Mr. LEVIN. I thank the Senator.
Amendment No. 5687
Mr. SANDERS. Madam President, I have an amendment at the desk, and I
ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Vermont [Mr. Sanders] proposes an
amendment numbered 5687.
Mr. SANDERS. Madam President, I ask unanimous consent that the
reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To amend the Internal Revenue Code of 1986 to increase the
tax on high income individuals)
At the end add the following:
SEC. 304. SURTAX ON HIGH INCOME EARNERS.
(a) In General.--Part I of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after
section 1 the following new section:
``SEC. 1A. INCREASE IN TAX ON HIGH INCOME INDIVIDUALS.
``(a) General Rule.--In the case of a taxpayer other than a
corporation, there is hereby imposed (in addition to any
other tax imposed by this subtitle) a tax equal to 10 percent
of so much of modified adjusted gross income as exceeds
$500,000 ($1,000,000 in the case of a joint return or a
surviving spouse (as defined in section 2(a)).
``(b) Modified Adjusted Gross Income.--For purposes of this
section, the term `modified adjusted gross income' means
adjusted gross income reduced by any deduction allowed for
investment interest (as defined in section 163(d)). In the
case of an estate or trust, a rule similar to the rule of
section 67(e) shall apply for purposes of determining
adjusted gross income for purposes of this section.
``(c) Nonresident Alien.--In the case of a nonresident
alien individual, only amounts taken into account in
connection with the tax imposed by section 871(b) shall be
taken into account under this section.
``(d) Marital Status.--For purposes of this section,
marital status shall be determined under section 7703.
[[Page 23552]]
``(e) Not Treated as Tax Imposed by This Chapter for
Certain Purposes.--The tax imposed under this section shall
not be treated as tax imposed by this chapter for purposes of
determining the amount of any credit under this chapter or
for purposes of section 55.
``(f) Termination.--This section shall not apply to taxable
years beginning after the date which is 5 years after the
date of the enactment of this section.''.
(b) Clerical Amendment.--The table of sections for part I
of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after the item relating to
section 1 the following new item:
``Sec. 1A. Increase in tax on high income individuals.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.
(d) Section 15 Not To Apply.--The amendment made by
subsection (a) shall not be treated as a change in a rate of
tax for purposes of section 15 of the Internal Revenue Code
of 1986.
Mr. SANDERS. Madam President, let me be very frank. While the bailout
package we are dealing with tonight is far better than the absurd
proposal that was originally presented to us by the Bush
administration--which, if you can believe it, would have given the
Secretary of the Treasury a blank check to spend $700 billion in any
way he wanted, without any transparency, without any oversight, and
without any judicial review--this bill, far better than that, is still
short of where we should be. And I want to thank Senator Dodd and
others for their very hard work in improving this legislation. But in
my view, this bill is still not good enough. It should be rejected by
the Senate, unless an amendment I am about to offer is passed.
This country faces many serious problems in the financial market, in
the stock market, and in our economy. We must act, but we must act in a
way that improves the situation. We can do better than the legislation
we are dealing with tonight.
This bill does not effectively address the issue of what the
taxpayers of our country will actually own after they invest hundreds
of billions of dollars in toxic assets.
This bill does not effectively address the issue of oversight,
because the oversight board members were hand picked from the Bush
administration.
This bill does not effectively deal with the issue of foreclosures,
and addressing that very serious issue which is impacting millions of
low- and moderate-income Americans in the aggressive, effective kind of
way we should be.
This bill does not effectively deal with the issue of executive
compensation and golden parachutes. Under this bill, the CEOs and the
Wall Street insiders will still, with a little bit of imagination,
continue to make out like bandits.
This bill does not deal at all with how we got into this crisis in
the first place and the need to undo the deregulation fervor which
created trillions of dollars in complicated and unregulated financial
instruments, such as credit default swaps and hedge funds.
This bill does not address the issue that has taken us to where we
are today, the concept of ``too big to fail,'' the need for taxpayers
to bail out institutions which are so large that they will cause
systemic damage to our entire economy if they go bankrupt. In fact,
within the last several weeks we have sat idly by and watched gigantic
financial institutions such as the Bank of America swallow other
gigantic financial institutions such as Countrywide and Merrill Lynch.
Who is going to bail out the Bank of America if it begins to totter?
Not one word about the issue of too big to fail in this legislation, at
a time when that problem is, in fact, becoming even more serious. This
bill does not deal with the absurdity of having the fox guarding the
henhouse. Maybe I am the only person in America who thinks so, but I
have a hard time understanding why we are giving $700 billion to the
Secretary of the Treasury, who is the former CEO of Goldman Sachs,
which, along with other financial institutions, actually got us into
this problem. Maybe I am the only person in America who thinks that is
a little bit weird, but that is what I think.
This bill does not address the major economic crises we face--growing
unemployment, low wages, and the need to create decent-paying jobs,
rebuilding our infrastructure, and moving us to energy efficiency and
sustainable energy.
On top of all that, there is one issue that is even more profound and
more basic than everything else that I have mentioned, and that is, if
a bailout is needed, if taxpayer money must be placed at risk, whose
money should it be? In other words, who should be paying for this
bailout which has been caused by the greed and recklessness of Wall
Street operatives who have made billions in recent years? That is what
my amendment is all about. It is an issue that we have to bring to the
floor of the Senate because that is what the American people want to
hear discussed.
The American people are bitter, they are angry, and they are
confused. Over the last 7 years since George W. Bush has been
President, 6 million Americans have slipped out of the middle class and
are in poverty. Today, working families are lining up at emergency food
shelves in order to get the food they need to feed their families.
Since President Bush has been in office, median family income for
working-age families has declined by over $2,000; 7 million Americans
have lost their health insurance; 4 million have lost their pensions;
consumer debt has more than doubled; and foreclosures are the highest
on record.
Meanwhile, the cost of energy, food, health care, college, and other
basic necessities has soared. While the middle class has declined under
President Bush's reckless economic policies, the people on top have
never had it so good. For the first 7 years of Bush's tenure, the
wealthiest 400 individuals in our country saw a $670 billion increase
in their wealth. At the end of 2007 they owned over $1.5 trillion in
wealth. That is just 400 families--$670 billion increase in wealth
since Bush has been in office.
In our country today we have the most unequal distribution of income
and wealth of any major country on Earth, with the top 1 percent
earning more income than the bottom 50 percent, and the top 1 percent
owning more wealth than the bottom 90 percent. We are living at a time
when we have seen a massive transfer of wealth from the middle class to
the very wealthiest people in this country; when, among others, CEO's
of Wall Street firms receive unbelievable amounts in bonuses, including
$39 billion in bonuses in the year 2007 alone for just the five major
investment houses.
We have seen the incredible greed of the financial service industry
manifested in the hundreds of millions of dollars they have spent on
campaign contributions and lobbyists in order to deregulate their
industry so hedge funds and other unregulated financial institutions
could flourish. We have seen them play with trillions and trillions of
dollars in esoteric financial instruments in unregulated industries
which no more than a handful of people even understand.
We have seen the financial services industry charge 30 percent
interest rates on credit card loans and tack on outrageous late fees
and other costs to unsuspecting customers. We have seen them engaged in
despicable predatory lending practices, taking advantage of the
vulnerable and the uneducated. We have seen them send out billions of
deceptive solicitations to almost every mailbox in America.
I used to think that my home was the only one that was receiving
them. It turns out that billions of other solicitations went out to
probably every home in America. What they hoped to do was to gain new
customers for credit card companies and then, through the very small
print on the back of the solicitation, have the opportunity, have the
ability to monkey around with interest rates so when people thought
they were getting zero interest or 2 percent, it turns out that a few
months later they were paying very high interest rates.
Most important, of course, we have seen the financial services
industry lure people into mortgages they could not afford to pay, which
is one of the basic reasons we are tonight in the
[[Page 23553]]
midst of all of this. We have a bailout package today which says to the
middle class that you are being asked to place at risk $700 billion,
which is $2,200 for every man, woman, and child in this country. You
are being asked to do that in order to undo the damage caused by this
excessive Wall Street greed. In other words, the ``Masters of the
Universe,'' those brilliant Wall Street insiders who have made more
money than the average American can even dream of, have brought our
financial system to the brink of collapse, and now, as the American and
world financial systems teeter on the edge of a meltdown, these
multimillionaires are demanding that the middle class, which has
already suffered under Bush's disastrous economic policies, pick up the
pieces they broke.
That is wrong and that is something I will not support. The major
point I want to make this evening is, if we are going to bail out Wall
Street, it should be those people who have caused the problem, those
people who have benefited from Bush's tax breaks for millionaires and
billionaires, those people who have taken advantage of deregulation--
those people are the people who should pick up the tab and not ordinary
working people.
I have introduced an amendment which gives the Senate a very clear
choice. We can pay for this bailout of Wall Street by asking people all
across this country, small businesses on Main Street, homeowners on
Maple Street, elderly couples on Oak Street, college students on Campus
Avenue, working families on Sunrise Lane--we can ask them to pay for
this bailout. That is one way we can go or we can ask the people who
have gained the most from the spasm of greed, the people whose incomes
have been soaring under President Bush, to pick up the tab. They threw
the party, they became drunk on greed, and now I believe they should
foot the bill. What my amendment proposes is quite simple. It proposes
to raise the tax rate on any individual earning $500,000 a year or
more, or any family earning $1 million a year or more, by 10 percent.
That 10-percent increase in the tax rate from 35 percent to 45 percent
will raise over $300 billion in the next 5 years; $300 billion is
almost half the cost of the bailout.
If what all the supporters of this legislation are saying is correct,
that the Government will get back some of its money when the market
calms down and the Government sells some of the assets it has
purchased, this amount of $300 billion should be sufficient to make
sure 99.7 percent of taxpayers do not have to pay one nickel for this
bailout.
Most of my constituents did not earn a $38 million bonus in 2005 or
make over $100 million in total compensation in 3 years, as did Mr.
Henry Paulson, current Secretary of the Treasury and former CEO of
Goldman Sachs. Most of my constituents did not make $354 million in
total compensation over the past 5 years as did Richard Fuld, the CEO
of Lehman Brothers.
Most of my constituents did not cash out $650 million in stock after
a $29 billion bailout for Bear Stearns, after that failing company was
bought out by JPMorgan Chase. Most of my constituents did not get a
$161 million severance package as E. Stanley O'Neil, former CEO of
Merrill Lynch, did.
Last week, I placed on my Web site, sanders.senate.gov, a letter to
Secretary Paulson in support of the content of my amendment--which was
pretty simple. It said that it should be those people best able to pay
for this bailout, those people who have made out like bandits in recent
years--they should be asked to pay for this bailout. It should not be
the middle class.
To my amazement, and I am a Senator from a small State--to my
amazement some 48,000 people--and here they are, these are their names,
and I will not read them all off, 48,000 people have already cosigned
this petition, and the names keep coming in and the message is very
simple: We had nothing to do with causing this bailout. We are already
under economic duress. Go to those people who have made out like
bandits. Go to those people who have caused this crisis and ask them to
pay for the bailout.
The time has come to assure our constituents in Vermont and all over
this country that we are listening and understand their anger and their
frustration. The time has come to say that we have the courage to stand
up to all of the powerful financial institution lobbyists who are
running amok, all over this building--from the Chamber of Commerce to
the American Bankers Association to the Business Roundtable--all of
these groups who make huge campaign contributions, spend all kinds of
money on lobbyists--they are here, loudly and clearly. They don't want
to pay for this bailout. They want Middle America to pay for it.
So this is a moment of truth. I hope very much that this Senate will
support the amendment I have offered.
Madam President, I reserve the remainder of my time.
Mr. DODD. I thank the Senator from Vermont for his passion,
eloquence, and commitment. He is never shy. This institution could use
a little bit more of similar expressions of feelings for constituents.
I thank him for that speech.
I see my colleague from Alabama. We are going back and forth. At that
point after Senator Sessions, Senator Schumer is next in line.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. I believe I am to be recognized for 10 minutes, but I
ask that I be notified after 5.
The PRESIDING OFFICER. The Senator will be notified.
Mr. SESSIONS. Madam President, I would like to say to Senator Sanders
a couple things. First, I think it is indeed breathtaking that this
Senate would authorize basically one person with very little real
oversight, a Wall Street maven himself, and allocate $700 billion in
America's wealth, which I would have to say would be the largest single
authorization of expenditure in the history of the Republic.
So I have to say, fundamentally, I think we have not done a good
enough job in creating an oversight mechanism that will work, so I am
not going to vote for the bill; I am not. I would say, however, and
note this point, that my colleague, Senator Shelby from Alabama,
chaired the Banking Committee in 2005. He held hearings on the problems
at Freddie Mac and Fannie Mae.
Alan Greenspan, the then-Chairman of the Federal Reserve, wrote a
letter saying that if we did not fix Freddie and Fannie this very kind
of calamity would occur. He put that in writing. Senator Shelby pushed
through legislation to regulate it. It came through the committee on a
straight party-line vote; all Republicans, as I recall, voted for
additional oversight and reform of Freddie Mac and Fannie Mae, and all
Democrats voted against additional regulation of Freddie Mac and Fannie
Mae.
So I wish to say, I am prepared to support good regulation, sound
regulation, and I reject the idea that this problem all arose because
Republicans opposed regulation.
Amtrak
In a few minutes we are going to have a vote on Amtrak
reauthorization and appropriations as a standalone bill. The majority
leader, Senator Reid, has filled the tree. That means we cannot offer
any amendments. In the late 1990s, we directed that, after 2002, Amtrak
would no longer receive funding from the Federal Government. We ordered
that. And yet, we are again appropriating, for 5 years, almost $2
billion a year to fund this entity. We do not stand by our decision.
Why is Amtrak losing money? Primarily it is because long-distance
trains account for 80 percent of its cash operating losses, while
carrying only 15 percent of the passengers.
Now, I know people have romantic views about trains. They would like
to see everybody ride in trains. But people are not riding trains for
long distances. And as a result, the taxpayers are eating huge losses.
I would say, fundamentally, we can do better about that, and we need to
quit mandating, for political reasons, routes that might pass through
our States but are dead losers.
The Heritage Foundation did a study on a predecessor bill that was
very similar to the one we are considering. They found that the bill
would only
[[Page 23554]]
disrupt the necessary reform process and perpetuate low-quality service
at a much higher cost to the taxpayers. This bill lacks any substantive
reform proposal, it is replete with directives, alterations,
restructurings, subsidies, reports, 5-year plans, and other forms of
top-down micromanagement techniques that are designed to create the
impression that Amtrak is making improvements. In fact, Heritage said,
instead of reforming and improving Amtrak, the legislation may actually
make it worse.
The PRESIDING OFFICER. The Senator has used 5 minutes.
Mr. SESSIONS. I would say one more thing. I checked the price of a
train ticket from Birmingham, AL, to Washington, DC. I found that the
train makes 18 stops and takes 18 hours. The Amtrak ticket is $445.
What happens if you take a one-stop flight from Alabama to Washington?
It costs a little over $300, and makes only one stop. So this is why
people are making these choices. They have multiple choices on when
they leave Birmingham and what time they want to leave on a flight to
Washington. But a person on a train can only leave one time a day; it
takes them 18 hours, and they have to eat on the train at high cost.
That is why we are having problems. We should have had reform in this
Amtrak bill, and I do not like that it is brought up at the very last
minute, and the majority leader has fixed it so there can be no real
debate or amendments offered.
AMT
The alternative minimum tax patch is a huge part of the tax extenders
package. It will cost almost $79 billion in tax revenue, just this year
alone. And it is extraordinarily skewed to favor single individuals. In
2006, around 7 percent of married taxpayers with children were AMT
filers, compared to less than 1 percent of single individuals.
Families with children are getting caught up in it, because when you
calculate your alternative minimum taxable income, you can't claim
personal exemptions. It is unfair to those families. It is also unfair
to the low-tax States. High-tax States benefit much more than lower tax
States such as Tennessee or Alabama, because you also can't claim
deductions for state and local taxes.
We need a better AMT fix next year. Perhaps it is too late to do it
this year. But I urge my colleagues next year when this issue comes up,
we need to look at this very closely. We need to be sure we end this
bias against struggling families; we need to end the bias against
States that do not have high taxes.
I yield the floor and yield back the remainder of my time
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Madam President, the Senator from New York is next.
The PRESIDING OFFICER. The Senator from New York is recognized.
Mr. SCHUMER. Madam President, first, I wish to compliment my
colleague from Illinois, Barack Obama. His speech was not only on the
money, but the way he has handled himself throughout this crisis has
been nothing short of Presidential. He has been erudite, he has been
thoughtful, he has been effective, he has been behind the scenes, no
showboating, no big statements, untrue to what he is. He was perfect.
Now I rise to support the legislation before us. It has become clear
over the past few months we live in amazing and dangerous times. Who
would have ever thought that the lowly mortgage, long regarded as the
safest of investments, could bring our financial system to its knees.
The system was overleveraged, overextended, overoptimistic. Now we
are all paying the price. But that is where we are. While we must look
back and see what went wrong, we also have to look forward--that is our
immediate task--and try to avoid a meltdown.
As we confront this crisis, we are faced with dangers on both sides;
Scylla, the proverbial monster, from doing nothing, a real danger;
Charybdis, the whirlpool, from doing the wrong thing. It is as bad to
do the wrong thing as to do nothing.
There are real dangers to inaction. Chairman Bernanke held us
spellbound in the Speaker's office Thursday night when he described the
conditions of the economy, without hyperbole, without raising his
voice. His discussion was, in short, frightening. Our economy's body is
in terrible shape because its arteries, the financial system, is
clogged. It will cause a heart attack, maybe in a day, maybe in 6
months, but we will get a heart attack for sure if we do not act.
So we must act. Unfortunately, when we act, we are not just acting
for Wall Street. Unfortunately, Wall Street, with all its excesses, is
connected to Main Street. Right now, you cannot get a car loan if you
do not have a FICO score, a credit rating score that is very high, 720.
If that stays, we will sell 6 million fewer cars this year, and tens
of thousands of workers in Buffalo, in Detroit, and St. Louis will be
laid off through no fault of their own. That is not right. That is not
fair. That is the system in which we live.
If we do nothing, we hurt innocent workers, millions, even though
they were not to blame. But there was also the danger of Charybdis,
doing something wrong. Let's make no mistake about it. The plan
Secretary Paulson first presented was awful--$700 billion, a blank
check, an auction: you let me do it, I will figure it out, even
exemptions from breaking the law, the language seemed to say.
Through the hard work of the chairman and many of us on the Banking
Committee, both sides of the aisle, the other house, we changed it.
There is real tough oversight. There is protection for the taxpayers.
Senator Reid did an amazing job in getting warrants written in the bill
that are mandatory and tough. The taxpayer will come first, before the
bondholder, before the shareholder, before the executive.
We worked hard as well to limit executive compensation. It is not
everything the Senator from Montana, the chair of Finance, and I wanted
in the negotiations but a good, large first step. We broke down the
amount. There will have to be congressional approval for the second
$350 billion. There will be a requirement that the President notify for
$100 billion. So the first amount of money, $250 billion is given with
this legislation, another $100 billion for the President, if he
certifies real need; but $350 billion subject to congressional
disapproval. Even if we are out of session, we will come back.
So the legislation was improved, and it was logical to improve it;
$700 billion is a lot of money, even on Wall Street. None of the
thousands of money managers would invest that sum without appropriate
due diligence. There were times when the Secretary of the Treasury was
saying: You do not have to do due diligence. We deferred.
So to Secretary Paulson's TARP proposal we have added some important
provisions, THO, taxpayer protection, housing and oversight. The new
additions add, because the new additions are AMT relief--I ask
unanimous consent for an additional minute. I thought I was supposed to
get 6.
Mr. DODD. I will give the Senator an additional minute.
Mr. SCHUMER. Thank you. We have added THO, taxpayer protection, money
for homeowners and real oversight. And now more. The new additions
Senator Reid came up with will be money directly to Main Street, money
for businesses that invest to create jobs during a time of economic
downturn, tax breaks for new kinds of energy--solar, wind--that our
economy awaits, relief from the AMT, which affects not the wealthy but
in New York, at least, people making $50,000, $75,000, $100,000,
$125,000 who were paying too much under the AMT.
So this package is an improvement. Is it the way I would have written
it? No. Is it the way any of us would have individually written it? No.
But given the improvements, this package is better, significantly
better than doing nothing. I hope we will get strong bipartisan support
tonight, I hope we will get strong bipartisan support in the House, and
then we will move on to make the regulatory changes so this never
happens again.
The PRESIDING OFFICER (Mrs. Lincoln). The Senator from New Mexico.
[[Page 23555]]
Mr. DOMENICI. Madam President, I want to quickly thank a few people.
It is obvious, the people who have worked extra hard and done such a
marvelous job. But I have been involved many times in negotiations such
as this. In fact, the last time we did one of these, I was chairman of
the Budget Committee, and we had a savings and loan bailout. I remember
it well. It is worth mentioning for a moment because, as Senator Dodd
will remember, just as our Secretary of the Treasury is telling us, if
this works right, we could, in fact, make money instead of losing
money. So whenever we talk about $700 billion as if it were being lost
or given to somebody and they could run away with it, when we did the
savings and loan bailout, we were told when you pay for all these
assets and take them in, they may bring you as much money as you spent.
And lo and behold, it took a few years, but the Treasury made money on
that last bailout we had to put together. I predict that the amount of
money that will be lost on this one will be much less than the 700. As
a matter of fact, if it worked right, the taxpayer could get reimbursed
and, in fact, some money could get paid down on the national debt. I
start with that.
Having said that, I thank those who spent extra amounts of time,
energy, and did a great job, starting with the chairman of the
committee, Senator Dodd. I don't think we ought to be partisan. I heard
some Democrats talk about only Democrats that had been active in this.
It wasn't you, Senator Dodd. But you know that on your side you were
busy. On our side we had a rather marvelous negotiator named Judd
Gregg. I believe we want to thank him unequivocally for his work. He
surely has done a yeoman job with Republican Senators, explaining what
you all were doing. From that, there are numbers of other people, and I
say thanks to all. You have done a terrific job.
Our job here in the next few hours is to pass a bill and send it to
the House and challenge them to vote for it. It is past time, but it is
absolutely obvious that we must put confidence back into the credit
system of the United States. We must put confidence back into the
credit system of the United States. That means this rather fantastic
credit system, which has gone awry without any doubt, because it has
been manipulated, abused, but nonetheless it is still the greatest
delivery system that the world has ever seen in terms of delivering
money where money has to be, where money is needed, is now rocking. It
is in the tenth round of a heavyweight bout, and it is about to be
knocked out. We have to do something to make sure that doesn't happen.
I am very pleased that the Secretary of the Treasury, in spite of
whatever faults have been enumerated on the floor--and he claims some
faults himself. He talks about not being an eloquent speaker. I imagine
he hears Senator Dodd or he hears some other Senator, and he goes back
and does his work, and he wonders why the good Lord made him so that he
can't talk as well as them. But he knows a lot. For those who don't
think he should have been in this job, they are mistaken. He has come
up with solutions to this point.
He has told us how to solve the problem of the credit system being
filled with toxic assets. Toxic assets have been explained enough here
for me not to have to do it again, but essentially, for the most part,
they are mortgaged-backed securities that are no good. They were no
good from the beginning; ``no good'' meaning the person who bought the
house and gave the mortgage could not have made the payments from the
very beginning. They were given an opportunity to buy and sign the
promissory notes, with people having full knowledge that they weren't
earning enough. They were a credit risk, and they should not have had
these mortgages.
There were so many of them issued over the past 10 to 12 years that
they permeate the system. When they get there in sufficient numbers,
they clog the system, much like cars on a freeway speeding at 65 miles
an hour and having a crash. It is across all six lanes. All the cars
are stopped until you move the broken-down, crumbled-up cars. You move
them off, and then things run again. So we must move them off and let
the part of the American financial system that is great, let the
liquidity run its course so it is available where money should be
available under the American free enterprise, capitalist system.
We are hopeful that Secretary Paulson, in analyzing this, analyzing
the way to get that wreckage out of the way, in creating this $700
billion entity that could go out there and use that money to buy up
this salvage, hold it in the name of the people, can then, believe it
or not, sell it so that they might make money off of it. That is
perhaps why Secretary Paulson came to us with four pieces of paper
saying: This is what we ought to do. He clearly understood that while
it is complicated, it is very simple. While it takes many pages because
of the way we do legislation, four pages explains it in his language,
as he would need the language to do his job.
In any event, the current situation in the United States has created
a problem where the financial and credit markets are blocked up. No
matter how you say it, either say toxic assets, with salvage from a car
wreck, call it what you may, you must get the toxic assets out of the
way. That is what this fund is going to do.
I, for one, had a difficult time at the beginning understanding why
we should do this. I actually was kind of upset and mad at the same
time that we were in this situation at this particular time in our
economic history, when such modernism has been imposed on the financial
system in great gobs. It is terrifically efficient and modern, filled
with all kinds of technological breakthroughs that make the system
work. Here we were, nonetheless, loading a system with promissory notes
and mortgages that from the very beginning were not going to make it,
thousands upon thousands of them being packaged up, with a bow put on
them, making them look like securities that were valuable and shipping
them out and getting them through the market.
What we are being asked for here tonight is to vote yea for a bill
that contains the proposed rescue mission that Secretary Paulson, on
behalf of the President, has put together and submitted to us. We made
it better in that we made sure it has oversight. We made sure that the
other things our people were complaining about were taken care of. We
have taken care of those, and it is a better bill in that regard.
Then we were shocked the other night when the House voted no on the
bill. It has come back to the Senate, and here our people have thought
it through. I hope House leaders have paid attention and listened. As I
look down at my friend Senator Dodd, I say I am hopeful and certainly
almost positive that he and others have talked to the leadership on the
House side about what we are going to do tonight and what we hope they
will do, when they get the results of our vote.
I think I am safe in predicting the enthusiasm around here is to vote
this out. It will pass overwhelmingly, in my opinion. Nobody is happy.
Nonetheless, we are going to get it done. This is one of the most
difficult situations to explain to the American people that I have ever
been involved in.
This afternoon, I was on a little TV show, and the announcer said to
me: Senator Domenici, I want to ask you a question that I was asked
today.
I said: You mean this day, today?
Yes, an hour ago.
What was the question, I said.
He said: I have $250,000 and I would rather lose it than to see our
banking system socialized. Why aren't you saying that? She said to the
announcer, why aren't you condemning the socialization of our banking
system?
Of course, it was my turn to answer. I said: My oh my, it is hard to
explain to people. First of all, the Secretary is only given 2 years to
accomplish this entire job, 2 years. In 2 years, I think we could
hardly socialize a system as big as the United States banking and
finance system. You are in and out and hope it works. So I believe many
people in this country are paying attention
[[Page 23556]]
and trying to understand it, but we are all having difficulty
communicating.
I hope when we are finished tonight, we will be able to explain it
better to our people. And before we are finished, some of the fear and
trepidation that Members of the House have about voting for this can be
dissuaded and we leave the scene. And we can vote with confidence for
the country, for the right thing, and make sure that our finance system
is given a chance to come out from under this absolutely perilous load
that has been thrust upon it.
There will be plenty of time after that to assess blame. I would
caution that if you read anything about it, either side ought to be
careful about laying blame on the other side. I look to the Democrats
and say: Be careful as you try to blame President Bush and Republicans
exclusively for this. I say to Republicans the same thing.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Madam President, I yield 5 minutes to my distinguished
friend and colleague from New Jersey.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. MENENDEZ. Madam President, I am as angry as any New Jerseyan, as
any American, about the economic situation we have been put in. But the
truth is, for those who are honest with themselves, they know we are in
an economic crisis and doing nothing is not an option. If we don't get
credit flowing again, businesses won't be able to operate. People in
our neighborhoods will lose their jobs. Getting a loan for a car, an
education, or a home will become increasingly difficult, if not
impossible. I believe the American dream itself is facing one of the
greatest risks in recent history. What we have before us is an economic
stabilization plan. It is not perfect. But it will help protect and
create jobs by restoring stability and confidence to our economy.
We have taken the plan the administration sent us. We rejected it and
reworked it. George Bush first sent us a plan with no accountability, a
plan where the idea of checks and balances was: We write the check, and
they fill in the blank. But we have changed that plan, made vast
improvements, and put taxpayers first. The plan provides for oversight,
accountability, an oversight board, and a special inspector general.
The plan makes sure there is congressional review and, ultimately,
approval for any additional funding over $350 billion. In this plan,
taxpayers will be treated as investors. If we take on a risk, we will
be given warrants, the equivalent of a shareholder, given a stake in
any future profit that might lie ahead for that company.
If we step in during the decline, taxpayers must be allowed to share
in the profit. So the plan is structured to reward taxpayers with
profits while protecting them from losses.
This plan says there will be no more golden parachutes. People who
led us into this mess cannot be rewarded for failure. Besides
strengthening our economy's foundation, it creates jobs, provides
relief for struggling homeowners, and will help small businesses access
credit, the small businesses that create 75 percent of America's jobs.
Tonight's vote provides also tax relief for the middle class by
taking care of the alternative minimum tax in the next year. It pushes
for loan modifications to help struggling homeowners stay in their
homes and stop property values from falling in our neighborhoods. This
vote tonight invests in America's renewable energy, to drive down gas
prices and create American jobs that can't be outsourced.
Now, this plan is not perfect, but it is necessary. We still have a
long way to go toward tackling the root of this crisis, which is the
housing market. I hope we will set the goal of saving at least a
million families from foreclosure. We still have a long way to go to
establish the strong regulatory enforcement I have called for in the
past that prevents the kinds of abuses that got us into this situation
in the first place. But, again, doing nothing is not an option. Jobs
are on the line. People's cars, houses, and educations are on the line.
Those who would reject this plan tonight out of ideology will be
punishing not the CEOs but hundreds of thousands of Americans who will
lose their jobs.
Madam President, I am going to heed the call of Senator Obama. It is
time for us to come together and act in the best interests of this
country. Clearly, we are experiencing unprecedented times. I, along
with some of my colleagues, warned many times in the past about the
gathering specter that irresponsible lending posed, but we were
dismissed as alarmists. This is one instance where I wish I had been
wrong.
But tonight is not about looking back and pointing fingers. It is
about looking forward and preventing even further damage to our economy
before it is really too late. Tonight is about keeping the American
dream stable enough that we can make it a solid promise for tomorrow,
and that is why I will be voting yes.
Madam President, I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SHELBY. Madam President, I ask unanimous consent to be recognized
to speak for up to 15 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SHELBY. Madam President, I rise today to speak before we take
what will be one of the most important votes, unrelated to war, many of
us will cast in the U.S. Senate.
The proposal before us provides $700 billion to buy illiquid assets
from financial institutions. The stated goal of this scheme is to
return confidence and liquidity to our credit markets.
We did not get into this situation in a matter of days, and we are
not going to fix it with a piece of legislation quickly cobbled
together in back rooms of the U.S. Capitol.
In fact, this crisis has been years in the making. Over the last
decade, trillions of dollars were poured into our mortgage finance
markets, often at the direction of well-intended, albeit ill-conceived,
Government programs.
At first, the money backed conventional mortgages with standard
downpayments and properly verified incomes.
Over time, the number of home buyers who met conventional loan
requirements dwindled. In order to fuel the upward spiral, mortgage
products became more exotic, requiring less of borrowers and involving
more risks.
Without regard for fiscal prudence and simple economics, mortgage
brokers, realtors, homebuilders, mortgage bankers, and home buyers
created the conditions that helped inflate the housing bubble.
At the same time, Wall Street was developing ever more sophisticated
finance vehicles to ensure that money continued to flow into the
mortgage markets to meet the demand.
Mortgages were pooled, packaged, and rated ``investment grade'' by
the credit rating agencies. They were then sold into a market eager to
purchase securities with a wide range of risks and yields.
Many purchasers employed massive amounts of leverage, layering risk
upon risk in an effort to maximize return. To cover their risks, many
of these buyers also bought credit protection from one another,
entering into derivatives contracts with nominal values in the hundreds
of trillions of dollars.
Eventually, economic reality caught up with us. Housing prices
stalled and then began falling.
Many who bought homes with unconventional loans were unable to afford
their rising payments. Because home values were dropping, they were
unable to refinance and delinquency rates skyrocketed. This trend has
not yet abated.
Once homeowners began defaulting, the value of mortgage-backed
securities plummeted.
Collateralized debt obligations, or CDOs, that were comprised of the
riskiest mortgage-backed securities became worthless. As a result,
financial institutions holding securitized assets have suffered
enormous losses and have been desperately trying to raise new capital.
I have been a member of the Senate Banking Committee for over 20
years. When I joined the committee, the savings and loan crisis was
just beginning to unfold.
[[Page 23557]]
Let me remind my colleagues that it took nearly 10 years, five
Congresses, and 3 administrations until that smaller, more contained
crisis was resolved.
Personally, I learned a few solid lessons from that experience. I
came to understand that bank management, bank capital, and sound
regulatory policy make a major difference.
What I learned then has guided me ever since.
For example, in 1995, I opposed the expansion of the Community
Reinvestment Act. I did not take this position because I am against
lending to minorities or low-income individuals. My concerns were based
on the simple fact that credit cannot be safely extended on any basis
other than risk, and risk cannot be mitigated through social
engineering.
The appropriate allocation of credit is not political, it is based on
merit. Those with good credit receive the best terms and lowest rates.
Those with bad credit receive the worst terms and the highest rates, or
in some cases, no credit at all.
The CRA was an attempt to get around this fact and it failed. I
remind my colleagues of this as we prepare to buy assets backed by the
very same mortgages born of this flawed policy.
I find it ironic that many of those who supported the legislation
that upended the basic concept of risk-based lending are now saying
that our present circumstances are an indication that the free market
failed. Federal policy, not free market decisions, fueled risky loans
to unqualified borrowers.
In 1999, I opposed the financial modernization bill. Despite Alan
Greenspan's proclamations, I did not think it provided a sufficient
regulatory structure to oversee the financial system it created. I was
also concerned that it lacked some basic consumer privacy protections.
Many are now claiming that deregulatory effort led us directly to where
we are today.
In 2001, I became concerned about the banking regulators' effort to
modernize bank capital standards through what is known as Basel II.
While it was very important to update those standards, it appeared to
me that ``modernization'' was focused more on reducing bank capital
levels than improving bank capital standards.
During the process, it often seemed that the regulators were more
interested in industry priorities than protecting the banking system. I
spent nearly 5 years trying to ensure that the regulators produced a
balanced rule that focused on safety and soundness.
When I became chairman of the Banking Committee in 2003, I
immediately became concerned with the financial health and regulatory
structure of the Government sponsored enterprises, Fannie Mae and
Freddie Mac.
I did not think the entities had sufficient capital, management
controls, or regulatory oversight. I was particularly troubled about
their size because their combined portfolios amounted to nearly $2
trillion at that time.
I believed that their operations posed a systemic risk to the
financial markets. After each disclosed that they had committed serious
accounting fraud, my concerns grew more focused and I stepped up my
efforts to pass legislation.
Those efforts were rebuffed by the Democrats on the Banking
Committee. And, let us be clear as to what the GSEs were doing at this
time.
From 2004, when we began considering GSE legislation, up until very
recently, the GSEs went on a nearly trillion dollar sub-prime and Alt-A
mortgage-backed security buying spree. Madam President: $1 trillion.
I do not know for sure what motivated them in this effort, but I do
know the GSEs were spending hundreds of millions of dollars lobbying
Congress in an effort to stave off additional regulation.
Fannie's and Freddie's greatest allies were those that advocated and,
at times, demanded that the GSEs continue to facilitate sub-prime and
Alt-A borrowing. As long as they complied, real regulation was dead.
This symbiotic relationship, in turn, fueled an already over heated
market to grow even hotter.
As the driving force in mortgage finance, this purchasing effort also
broke down what scant underwriting standards remained in the market
place. Many, if not most, of the toxic assets that this taxpayer-funded
bailout is designed to buy were originated in an atmosphere created by
the GSEs and facilitated by their supporters here in Congress.
During the securitization boom that took off in the last 5 years, I
also became very concerned about the regulatory oversight of the credit
rating agencies whose ratings were crucial to getting securities sold.
When I looked at the system in place, I soon realized it was
dominated by two companies and that the regulatory structure provided
no real oversight and actually prevented competitors from entering the
market.
Considering the value that mutual, money market, retirement pension
funds, and insurance companies, and other important investors place on
the ratings, I recognized that immediate legislative action was
necessary to address the shortcomings of the oversight regime. We took
that action in the fall of 2006.
Unfortunately, it now appears even that effort came too late. The
rating agencies provided investment-grade ratings on securities worth
hundreds of billions. A large percentage of those ratings have since
been downgraded.
I remind my colleagues that those securities also happen to make up
the troubled assets that are now the focus of this bailout.
Finally, in 2007, I publicly questioned the adequacy of the
Securities and Exchange Commission's Consolidated Supervised Entities
Program.
This nonstatutory program was put in place by the SEC to allow the
five big investment banks to meet European regulatory standards without
having to submit to Federal Reserve supervision as provided in the
Financial Modernization Act. The program also allowed the investment
banks to significantly reduce their capital requirements.
Because I already felt that the 1999 act did not provide adequate
supervision, I was troubled that the investment banks continued to
chafe even at this minimal supervision.
With their trillions in assets, global operations, and hundreds of
thousands of employees, they were content to be ``regulated'' by a
program with a staff of less than 20 people, and they vigorously
lobbied the Banking Committee to keep it that way.
Needless to say, I had serious concerns about this arrangement.
These concerns crystallized when Chairman Dodd marked up legislation
that would not only have codified the SEC's regulatory concoction, but
also would have expanded the powers of the investment banks, allowing
them access to taxpayer-insured funds through ownership of insured
depositories.
I requested that the Banking Committee hold hearings to examine this
structure in greater detail before we ratified that which the SEC
created through regulatory fiat. Once again, we did not.
Instead, my Democrat colleagues voted not only to codify the CSE
program, but also to expand it. My Republican colleagues voted to
reject it and argued for additional committee action.
Today, the CSE program is gone because our investment banks have
either gone bankrupt, merged, or become that which they fought so hard
to avoid: Bank holding companies supervised by the Federal Reserve.
I would also like to point out to my colleagues that a large number
of the assets that will be purchased under the Paulson plan were either
originated or held by the CSE regulated firms: Bear Stearns, Lehman
Brothers, Merrill Lynch, Morgan Stanley, or Goldman Sachs.
We did not get to where we are today by accident, it was a path we
chose.
My warnings about the risk of basing credit decisions on well-
intended social mandates rather than sound, fact-based underwriting
were dismissed.
My concerns about the inadequacy of the regulatory structure put in
place in the financial modernization legislation went unacknowledged.
My efforts to ensure that bank capital standards were designed to
ensure
[[Page 23558]]
safety and soundness, rather than industry concerns, were conducted
largely alone.
When I urged focus one of the SEC's Consolidated Supervised Entities
Program, my Democrat colleagues ignored me and instead voted to ratify
and expand the program.
When we attempted to pass meaningful GSE reforms, we were repeatedly
stopped.
I commend Senator Dodd, who in the end, worked with me to pass a
bill. Unfortunately, that effort came too late because the GSEs had
already gorged on billions of dollars of toxic sub prime paper and no
longer could function on a stand-alone basis.
As often as I have argued that we needed to address systemic risks in
the financial markets, my advice has been dismissed, and my concerns
have proven to be fully justified.
I now have serious concerns about the bailout package we are
preparing to pass.
My foremost concern relates to the manner in which we are attempting
to address the problem.
The Paulson plan focuses on a single problem--illiquid assets held
throughout the financial system.
I believe we have a number of interrelated problems that need to be
addressed in order of their significance.
First, and most urgent, is liquidity. Then we must address the
solvency of our financial institutions and declining home values, not
to mention our entire regulatory structure.
I believe Congress can address the liquidity issue by increasing the
combined resources of the Federal Reserve System and the Treasury.
By enhancing the Federal Government's existing lending facilities and
guarantee programs, we can help stabilize money market funds and
provide loans to troubled financial institutions without exposing
taxpayers to massive losses. This act alone would allow us some time to
consider thoroughly our next steps.
Thereafter, we must determine how to address the troubled assets on
the books of financial institutions and continue the process of dealing
with declining home values. This will likely be a long and difficult
process, a fact that is not being shared with the American people.
As long as we address the immediate liquidity problem by expanding
lending facilities using the illiquid securities as collateral, we can
then take the necessary time to do our work in a more responsible and
thoughtful manner. It appears, however, that we are not going to
subject this bill to our normal process.
With that in mind, I would like to take some time to look more
closely at what this unprecedented piece of legislation would do.
The Emergency Economic Stabilization Act of 2008 would create the
Troubled Asset Relief Program.
It would authorize the Treasury Secretary to purchase up to $700
billion worth of troubled assets from just about any type of
institution.
In exercising this authority, the Secretary would be vested with
nearly unfettered power.
The Secretary could purchase any financial instrument he deems
necessary to promote financial market stability. He could purchase not
only mortgage-related assets, but securities based on credit card
payments, auto loans, or even common stock.
The Secretary could purchase assets from any institution, not just
financial institutions so long as they have ``significant operations in
the United States.''
What constitutes ``significant operations'' is left undefined,
leaving the Secretary a great deal of latitude in determining which
institutions would qualify for the program.
Certainly the Secretary could purchase assets from private equity
firms and hedge funds, but also corporations and State governments.
Given the lack of standards and the breadth of the Secretary's
authority, it should be no surprise if politically connected entities
get special treatment under this program.
Under a provision hidden deep in the legislation, the Treasury
Secretary also has the authority to purchase troubled assets from
foreign central banks and governments.
The Secretary has unlimited authority on how the purchased assets are
managed and sold. Treasury could even set up Government-run hedge funds
that compete with private companies.
While the Treasury Secretary's authority expires at the end of 2009
and can be extended for only 1 additional year, the Treasury's
authority to manage purchased assets is perpetual.
Treasury could also purchase assets after the termination of its
authority, if it has entered into agreements to purchase prior to the
termination date. This program will be with us for decades to come.
The few restrictions imposed on the Treasury Secretary's authority
could undermine the effectiveness of the program. If the Secretary
purchases more than $100 million in troubled assets from an
institution, he must obtain non-voting common stock or preferred equity
in the institution.
To complicate matters further, the bill does not provide clear
guidance on how many warrants the Secretary should obtain or what their
terms should be.
If the Secretary makes direct purchases of troubled assets, the
selling institution must adopt standards on executive compensation and
corporate governance.
If the Secretary purchases more than $300 million in troubled assets
from an institution, the institution must adopt restrictions on
executive pay and golden parachutes for any new senior executives it
hires.
The legislation also restricts the amount of executive compensation
participating institutions can deduct for tax purposes. While this may
make us feel good, these provisions will likely limit the number of
institutions that utilize the program.
Not to mention that the compensation restrictions are prospective. In
other words, the people who created this mess get to walk away with
cash in hand, and the people hired to clean it up get penalized.
This will no doubt undermine their efforts to resolve their financial
problems by hindering their ability to hire new management
Upon enactment of the legislation, the Treasury Secretary is
authorized to purchase up to $250 billion in troubled assets. This
purchase authority can be increased by another $100 billion if the
President certifies that such additional authority is needed.
The Secretary's authority can be, and likely will be, increased to
$700 billion if the President certifies the need and Congress does not
enact a joint resolution of disapproval.
It is extremely difficult to obtain the two-thirds votes in both the
House and Senate to override a veto. Therefore, for all intents and
purposes, this distribution system is a mirage. It does not effectively
limit the Treasury Secretary's ability to spend $700 billion.
The bill would establish a Financial Stability Oversight Board to
review and make recommendations on the Secretary's operation of the
program. The oversight board is fatally flawed.
First, the Secretary of the Treasury is one of its members. This
means that the Treasury Secretary is reviewing his own actions.
Second, the other members of the board include the Chairman of the
Fed, the Director of the Federal Home Finance Agency, the Chairman of
the SEC, and the Secretary of Housing and Urban Development. I think
there is a constitutional question about whether a Secretary can have
his actions reviewed by any person other than the President.
Even if the board is constitutional, why is the Chair of the FDIC not
a member? After all, the FDIC has the most experience of any Federal
agency in buying and selling bank assets. It also is concerned about
resolving bank problems with the least cost to the taxpayers.
Regardless of who sits on the board, we will be setting a bad
precedent by having heads of agencies oversee our Cabinet Secretaries.
Finally, the oversight board's authorities are not well defined, so
it is not clear what happens if the oversight board disagrees with the
Treasury Secretary's actions. Can it prevent him
[[Page 23559]]
from acting? Will disagreements result in litigation? Such bureaucratic
infighting could very well undermine the effectiveness of the program,
to the extent it can be effective at all.
The bill also establishes a Congressional Oversight Panel, whose
members will be selected by the leaders of the House and Senate. The
panel is charged with providing reports on the program, the
effectiveness of foreclosure mitigation efforts, and the state of our
financial regulatory system.
This is work the Senate Banking Committee and House Financial
Services Committee should be doing.
The bill also provides for oversight of the program by the
Comptroller General, establishes an Office of the Special Inspector
General for the program, and subjects the Secretary's actions to
judicial review.
While I think it is important to oversee this new entity's
activities, this hodgepodge of authority is likely to hamper the
program's effectiveness as it struggles to satisfy redundant and time-
consuming requests for information.
These oversight bodies might not check the Secretary's authority, but
they will ensure that this program generates lots of paper. More
importantly, they do nothing to address the fundamental flaws with this
plan.
The Secretary is required to issue regulations to address conflicts
of interest. Interestingly, the Secretary may start buying assets
before these rules are put into place. This is a loophole that could
have serious long-term consequences for the program.
The bill does not require that taxpayer losses be repaid by its
beneficiaries. It only directs the President to present a legislative
proposal to recoup such losses from the financial services industry.
This is something that the President could do even without this
legislation. Furthermore, there is no guarantee that the beneficiaries
of the program will pay.
Indeed, it is likely that companies that did not participate in the
program would end up covering its costs.
The bill would grant the SEC the authority to suspend mark-to-market
accounting, establishing a dangerous precedent that could lead to the
politicization of our accounting standards, something I have fought for
years.
The newest addition to the bill is a precipitous increase in the
deposit insurance amount from $100,000 to $250,000. We are about to
more than double the exposure of the already depleted deposit insurance
fund, and by extension, the American taxpayer, on a whim.
I will remind my colleagues that the track record for overnight
increases in deposit insurance is not pretty. In 1980, Congress
increased deposit insurance coverage for all accounts from $40,000 to
$100,000 without the benefit of hearings or open discussion.
At that time, proponents argued such a change was necessary to
stabilize the banking industry. What followed was a massive bailout of
the savings and loan industry to the tune of well over $100 billion.
This time around, we are proposing a 150 percent increase when the
deposit insurance fund is already stressed and in need of
recapitalization.
At a time the FDIC's problem bank list is growing and more failures
are anticipated, this higher deposit insurance coverage will increase
the FDIC's expected payments for failed insured depositories. Those
costs, which would ordinarily be passed on to the banking system in the
form of higher premiums, will instead be placed directly on taxpayers.
Let's also be realistic about this. To the extent this measure is
intended to address the concerns of those who handle large transaction
accounts, such as corporate treasury deposits, those people are not
going to be comforted by additional coverage levels.
If they believe a bank is in trouble, they will withdraw their money
because deposit insurance does not increase confidence in a failing
institution.
Let's also be clear about what this means for taxpayers.
If, on the front end, the $700 billion bailout is not enough to shore
things up, rest assured, there will now be more insurance on the back
end should banks begin to fail. The American taxpayer will pay, both
coming and going.
The bill does do some good things, however. It permits the Federal
Reserve to pay interest on reserves, which will improve its ability to
conduct monetary policy and serve as a lender of last resort.
The bill does marginally increase the availability of the HOPE for
Homeowners program and requires the Secretary to implement a plan to
assist homeowners to the extent it acquires mortgages or other assets
backed by mortgages.
While I generally do not support bailing out corporations or
individuals, if we are going to get into the bailout business, then
funds should be directed to individuals as well. The provisions in this
bill for individual homeowners, however, are inconsequential compared
to the $700 billion going to Wall Street.
As I said, I am no advocate of bailouts. I voted against the Chrysler
bailout. I can not say I would have supported a bailout in this
instance, but I can say the chances would have been much greater if the
underlying plan had been subjected to greater scrutiny and examination.
That said, I agree that we need to do something to address the current
liquidity crisis in the marketplace.
My greatest concern is that we have not spent any time determining
whether we have chosen the best response. There are many well informed
people who argue that we have not.
In fact, just this morning, a Nobel prize winning economist indicated
that using a reverse auction program to buy distressed assets from
financial institutions was not going to be enough to ``revive the
operations of the banks.''
I am not sure whether he is right or wrong. I am also not certain
whether the Secretary is right or wrong. To the extent other options
exist, I believe we failed the American people greatly in not examining
them.
Many around here are finding comfort in the notion that ``something
is better than nothing.'' I believe that is a false choice. The choice
we faced was between pursuing an informed response or panic.
Unfortunately, we chose panic and are now about to spend $700 billion
on something we have not examined closely. Yes, in the end, we will
have ``done something.'' At the same time, however, we will have done
nothing to determine whether it will accomplish anything at all.
I yield the floor.
The PRESIDING OFFICER. The Senator from Connecticut is recognized.
Mr. DODD. Madam President, I have a unanimous consent that has been
cleared on both sides. I ask unanimous consent that an additional 30
minutes be allocated for debate with respect to H.R. 1424, equally
divided and controlled between the leaders or their designees, and that
the debate with respect to the House message on H.R. 2095 be delayed
accordingly, and that any other provisions remain in effect.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DODD. I yield 5 minutes to Senator Nelson of Florida.
The PRESIDING OFFICER. The Senator from Florida is recognized.
Mr. NELSON of Florida. Madam President, the things that have been
added to this bill such as the FDIC provisions as well as the energy
tax extenders and other tax extenders that I have already voted in
favor of, certainly I support them, but the underlying bill rewards the
banks and leaves the little person with the short end of the stick, and
that is not right. This plan rewards the investment banks that ran us
into the ground and it hardly does anything to help the homeowners who
are facing foreclosure.
If, under this bill, the financial institutions participate in the
Treasury's program, they should accept reasonable limits on executive
compensation, but under the bill they don't. The limits on executive
compensation are left to the Treasury Secretary's discretion. Some CEOs
who caused this crisis in the first place will benefit from this
bailout and will also walk away with
[[Page 23560]]
golden parachutes. That is not right. This creates a moral hazard the
U.S. Government will undertake.
This bill sends a message to Wall Street that if they play fast and
loose in the name of short-term profits, the Government will actually
make up for their losses. And the bill does very little to help
individual homeowners. Until we stabilize the housing market, which is
the underlying ability to restructure the economy from this crisis--
until we stabilize the housing market, and until we stem the record
number of foreclosures, our market simply is not going to improve.
While this bill authorizes the Treasury to develop and carry out a
plan, it does not require financial institutions participating in the
program to modify or refinance any loan. It only requires the Treasury
to encourage loan modifications. Voluntary refinancing efforts will not
solve our foreclosure crisis. We should mandate these efforts. We
should start by requiring Fannie and Freddie to refinance the mortgages
they hold on their books.
Furthermore, I think this bill should do more to investigate the
business practices of major credit rating agencies. They fostered the
enormous growth of the mortgage-backed securities. They gave
securities, mainly consisting of subprime mortgages, the gold standard
or the triple A rating. That rating gave investors the confidence that
they were making safe investments. Without that triple A rating,
insurance companies and pension funds and other investors would not
have bought those products.
So I am calling for an investigation to probe the business practices
of those agencies. Investors relied on and trusted those credit
ratings, and the public deserves to know how these rating agencies
concluded that such risky investments could receive such high credit
ratings.
I could say a lot about this, but let me just say that the bottom
line is, ultimately, this bill forces taxpayers to bail out investment
banks that caused the crisis in the first place, and it does nothing to
address the real problem, which is home foreclosures and a
resuscitation of the housing market. Until we stop the record level of
foreclosures, this crisis is going to continue to worsen, whether we
pass this bill or not.
For these reasons, I oppose this bill. I think Congress can do
better, and I think Congress can come up with a better, more targeted
solution to this complex crisis.
It saddens me that I would oppose so many of my colleagues who have
offered very cogent reasons. It is true we have to do something, but
this particular legislation is not the right solution.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Hampshire is recognized.
Mr. GREGG. Madam President, I understand we have some time on our
side. I ask unanimous consent that the Senator from South Carolina be
recognized for 7 minutes, the Senator from Florida be recognized for 7
minutes, and that I be recognized for the remainder of the time, and
that obviously we would go back and forth.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from South Carolina is recognized.
Mr. GRAHAM. Madam President, before we get too far into explaining
the problems we face with this bill, I think we need to acknowledge the
hard work on behalf of those who have brought us to this point. We know
it is not perfect. The chairman knows it is not perfect, but I think he
has done the country a great service. To the Senators who have
negotiated this with their House colleagues, to the staff who has been
working night and day, from my point of view, you have stepped to the
plate and you have done the country a great service.
Do more, we will. Make no mistake about it. To those who wonder: Will
more follow? Yes. There will be more corrective action following in the
Congress. Please understand, after we take this decisive action, there
will be more troubles lying ahead for America. But we have two choices
as far as I am concerned: A bad choice we all recognize, and a
catastrophic choice if we do nothing.
Now, there are a lot of people getting phone calls. I am a king of
the phone calls. I have been involved in immigration, Gang of 14, you
name it. People have called my office, and you are always welcome to
call and I will listen to what you have to say. But the people are
against this proposal. Who are the people? That is the first thing you
have to decide as a Member of the Senate. Whom do you represent?
Do you represent every corner of society: Republicans, Democrats,
Independents, libertarians, and vegetarians?
One thing I have found is that a phone call from mad people helps you
only so much. There will always be people calling my office telling me
what I can't do. I think it is up to me to have a little broader view
of what to do.
I challenge you to come to South Carolina and walk up and down Main
Street and not find concern on the faces of people in business. I
challenge you to go to retirement communities in South Carolina and not
see fear in the faces of people who depend on their 401(k) plans for
their retirement. I have never seen anything like it.
This is not about investment banks; this is about the ability of
Sonic Drive-in to expand their franchise--a very big business--but,
more importantly, it is about the plumber who can't make payroll
because he can't get credit. It is about the lady who owns the diner,
second-generation owner in Greenville who wants to expand and can't get
money. It is about people trying to buy a car and they can't buy the
car, and the dealerships in South Carolina are about to fold. It is
about you--the average American--soon, if we don't act, being unable to
exercise your hopes and dreams because you will not be able to borrow
money.
Borrowing money responsibly is the heart and soul of a free market
economy. The reason we are here today is people have borrowed money
irresponsibly, and all of us are to blame. But if this was about an
investment bank and a few CEOs, I don't think 70 Senators would vote
for this legislation.
This is about something more fundamental. This is about a problem
that started and has infiltrated our economy to the point that if we
can't muster the political courage to listen to the phone calls and act
decisively and tell people who are mad: I am sorry, there has to be a
solution even if you don't agree, then average, everyday people are
going to lose everything they have worked for throughout their life.
People are not going to be able to send their kids to school and small
businesses and big businesses in this country are going to fold next
week. I said next week.
If you told me that Wachovia Bank, one of the largest banks in
America, would be sold at 10 cents on the dollar, I would have said I
don't think that can happen. But I would have been wrong. It is
happening, and it will continue to happen until we find a solution.
This proposal, to those who crafted it, you have done a very good job
after having been dealt a very difficult hand. It allows intervention
in a way that will protect the taxpayer.
To those who say that $700 billion of taxpayer money will be spent
and it is gone, you don't know what you are talking about. You are
scaring people. That is absolutely not true. I am convinced we are
going to get most of the money back, if not all of it back, by the way
we have crafted this proposal. But I am equally convinced if we do
nothing, we are headed to recession, maybe a depression. And you think
it costs a lot now. Just do nothing and see what it costs. Nobody wants
to be in this spot, but if you don't want to be in these spots, don't
run for office.
So to the people of South Carolina, on Main Street, to the car
dealerships, to the small business enterprises, to the manufacturers,
to the retired communities, to those with whom I have met over the last
day or so, I have your message too. I have gotten the phone call, but I
have also gotten your message. At the end of the day, I have to rely
upon what good sense God may have given me, and sometimes I doubt how
much sense I have. A lot of people
[[Page 23561]]
obviously doubt it because they call me a lot. But I am convinced a lot
of smart people are telling me things that I can visualize and see with
my own eyes; that it is no longer about academia.
I have been home. I have seen people not be able to get loans to make
payroll.
I know what is going to happen if I don't act, if I don't take a
risk. If I am not willing to take a political risk, I know what happens
to people I represent in large numbers. They are going to lose a lot
more than I will lose.
We can stand replacing a few Senators. We cannot stand being unable
to borrow money at the most basic level. This is not about an
investment bank. This is about banks, small and large banks, and
lending institutions that are locked down and cannot loan money. This
is about the availability of credit that is going to be so high that no
average working person is going to be able to borrow a dime. This is
about Main Street. This is about the people I grew up with, and I
didn't grow up on Wall Street.
I am the first person to go to college in my family. My dad owned a
liquor store. Everything I know about politics I learned in the liquor
store, a pretty good place to learn from. We borrowed money to make
inventory. We owned a restaurant right next door. My mom worked 18
hours a day. I know what it is like to see my parents work hard and
cannot afford to get sick because there is no money coming in.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. GRAHAM. I end with this thought: I know this is not a perfect
bill, and I know this is a bad choice. But I also know from my common
sense and my life experiences that I need to act and I need to act now,
and I will.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Madam President, one quick thought. We are all entitled to
our opinions. Pat Moynihan used to say everyone is entitled to their
own opinions but not to their own facts.
As I listened to my friend from Florida, Senator Nelson, talk about
the executive compensation section of this bill, I must respond.
As to this legislation, section 111, negotiated by Senator Max
Baucus, myself, and others, let me be very clear. When Treasury buys
assets directly, the institution shall observe standards limiting
incentives allowing clawback and prohibiting golden parachutes. When
the Treasury buys assets at auction, an institution that has sold more
than $300 million in assets is subject to additional taxes, including a
20-percent excise tax on golden parachute payments triggered by events
other than retirement. And also we eliminated the deduction for
compensation above $500,000, and we prohibit golden parachutes at other
certain institutions--anything but mild. It is the first time ever in
the history of the Congress that we are actually going to pass
legislation dealing with golden parachutes. More will be done, but this
bill does take very concrete, specific actions in that regard.
Again, you are entitled to your own opinions but not your own facts.
I yield 5 minutes to Senator Kerry of Massachusetts.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KERRY. Madam President, I am still trying to process the
statement of my good friend, Senator Graham, about everything he
learned in the liquor store. I know him well enough to know he learned
a lot more than that, and he practices it well. He promised me to sit
down and define precisely what he did learn.
I listened carefully to a lot of our colleagues. Obviously, there is
an extraordinary amount of anger here, and that anger runs deep all
across the country, and it ought to run deep. It is hard to convey to
some of our fellow citizens the degree to which a lot of us share that
anger.
There is a stunning trail here of lack of accountability, of
arrogance in the marketplace that literally built a kind of Ponzi
scheme, a house of cards, out of greed. There is a stunning trail of
ignored advice to people in positions of responsibility who could have
done things. And there is a shocking trail of regulators who are in
position, who have the authority, and who didn't use that authority.
All of this we know as we come here tonight.
But the fact is, there are bigger stakes, and none of us has the
luxury of standing around here sort of being angry and being
frustrated. The truth is there is the potential of our financial system
literally collapsing. That is not because Wall Street needs to be
picked up and ``bailed out.'' It is because the liquidity crisis is
preventing every-day businesses, community banks in local communities,
small businesses that need to have working capital to make the purchase
of the orders they need to fill. Everything is frozen. People are
losing their earnest money on homes because the banks are not
fulfilling the obligation. They are scared to lend. Cars are not being
sold. It runs all the way down into the economy.
The stark reality is if we don't act tonight, if we don't act
immediately, and if we don't act with strength, that whole system can
come grinding to a halt and many more people are going to be hurt to a
far greater degree--savings accounts wiped out, retirement accounts
wiped out, the ability to be able to retire when they expect it,
sending kids to college, paying off college loans--a whole host of
things.
It is ugly that we are here. This is a distasteful vote. None of us
likes this vote, but the fact is we have a responsibility to put our
country, our economy, our security, and our strength ahead of all of
those dislikes and do the responsible thing today.
I want to say that I believe the Senate has acted responsibly in this
effort on a bipartisan basis. I salute what Senator Dodd, Senator
Baucus, working with us on the Finance Committee, and Senator Gregg,
Senator Corker, and others on the Republican side have done to be
responsible to bring the bill together.
The fact is that more than 65 percent of the banks have significantly
tightened their lending standards for small businesses. What happens
is, one of the reasons it is important to take the FDIC funding up to
$250,000 is some people are looking at their banks locally and they are
scared, so they move money to another bank which has an impact on the
bank that doesn't have any relationship to the real strength of the
bank but then weakens it. By raising that amount, we are going to give
confidence to community banks, midsize banks, and others.
The banks pay for that insurance, incidentally. It is not exactly a
gift from the Government. The insurance is paid for.
Every day approximately 10,000 more homes are going into foreclosure;
5 million homeowners, 1 in 11 homes are either in default or
foreclosure. It is the highest level since 1979. And this legislation
we are going to pass tonight is going to help keep the mortgage credit
flowing to keep people in their homes on a readjusted basis, something
many of us have been fighting for some period of time.
In addition, it is going to help families get student loans so they
can continue to help their kids get through college and build the
economy in the future.
Let me emphasize, this is not the original plan that was sent to us
by the administration.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. KERRY. Can I get 1 additional minute?
Mr. DODD. I yield 1 additional minute.
Mr. KERRY. We have strengthened this so significantly through the
efforts of Senator Dodd and others. There is an executive compensation
limitation, contrary to what the Senator from Florida said. Executives
are not going to walk away with millions of dollars. There is an effort
to help homeowners. There is accountability with an inspector general.
There is judicial review. Significantly in this effort the American
taxpayer is going to take ownership of these assets at a lower cost.
And when the economy comes back, which it will, those assets are going
to rise in value, and the American taxpayers are going to recoup this.
[[Page 23562]]
I was on the Banking Committee back when we did the 1990 RTC. We saw
this happen when we took good loans, separated them from bad loans, and
restored confidence in the banking system.
Once again I say to my colleagues, this is not about party, this is
not about politics. This is a vote--we don't always get them here--that
is absolutely strictly about our country and our future. I hope the
Senate is resoundingly going to pass this legislation tonight.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Madam President, I thank my colleague from Massachusetts
for an eloquent statement and a strong one.
The PRESIDING OFFICER. The Senator from Florida.
Mr. MARTINEZ. Madam President, I begin by expressing my thanks to
Chairman Dodd, for his leadership in this effort, his tireless work,
and my colleague Senator Judd Gregg who has done a tremendous job
stepping in and also providing a tremendous amount of leadership. I
thank both of them for the work they have done to bring us to the
point.
I also thank Secretary Paulson. I heard recently people expressing
perhaps this is some sort of a power grab by the Secretary of the
Treasury. This man will be out of office in 3 months or so after the
next President is sworn into office. That is the last thing, I know, on
his mind. He has worked tirelessly. He deserves our thanks for his
patience, for explaining to some of us at all hours what it is he
thinks is necessary we do.
This is important to all Americans, but I also understand their anger
and frustration. While I was in Florida over the last 24 hours, I was
speaking with an old friend, a schoolteacher. He is not someone who is
involved in banking and finance. He said: This bothers me. I pay my
bills. All my life, if I borrow money from a bank, nobody bails me out.
What is going on? What are we going to do?
We talked about it. I explained to him the difficulties of our
financial markets at this point in time. His last words to me were: Go
up there and do something. Get something done. He understood, as I hope
all Americans will come to understand, this is a very difficult moment,
but it is a moment from which we cannot shrink.
How we got here, we could talk about that for hours, and we will.
When we come back in January, we have to pick the bones. We have to go
over how we got to this position and what we can do to revamp the
regulatory scheme to make sure we don't get into a situation such as
this again, and do what we can to revamp the regulatory situation which
dates back to almost now a century. It needs to be reanalyzed and put
in place in a different way.
There is something important this bill mentions too, which is mark to
market. I spoke with many local bankers in Florida, small bankers, guys
lending money to keep small businesses in business. They were very
concerned about the mark-to-market accounting rules. We know that is in
the purview of the SEC. Here it is talked about and encouraged to
reassert the authority of the SEC to look into it. I know it will be a
big difference to small banks struggling in Florida with liquidity to
have the capital that every-day Floridians need to make their lives
work.
I am also encouraged that we have strong oversight over the Secretary
of the Treasury. There is an oversight board. I also understand and
agree with Chairman Dodd that, in fact, there are strong provisions in
this bill that are going to prevent executive compensation abuses that
none of us want to see happen as a result of what we are doing today.
The fact is, whether it is floor plans for car dealers, whether it is
the car loans for those who would buy the cars, whether it is someone
who is there to purchase a house but cannot get the money, we cannot
get the housing market going again if there is no liquidity, if there
is no credit; whether it is a line of credit for a small business.
I have another anecdote. A small businessman said: I always paid my
bills. I was never late with a payment. I go to the bank to exercise my
line of credit, and they tell me I can't. He now has to stop his plans.
He can't do what he was planning to do in his business to expand it,
grow it, buy new equipment, simply because the bank said you have done
everything right; we just can't lend you the money because we don't
have it ourselves. That is the situation with which we are dealing,
providing the safeguards the American people expect us to do.
We have to come back in January to do regulatory reform, to do
oversight of what we are doing now, which needs to be done repeatedly,
congressional oversight over how this is being implemented, to make
sure we provide the American people the confidence and the comfort of
knowing that while we got into a real mess and while Wall Street got us
into this mess, the fact is this is impacting every-day Americans, this
is impacting Floridians of every walk of life.
To fulfill our responsibilities every now and then, a tough vote has
to be taken. This is a tough vote. It isn't easy. A lot of people have
great angst about it. I understand their angst, and I share their
anger. At the same time, we are here to solve problems and get business
done, working in a bipartisan manner, coming together.
This is a great country. We are going to come through this crisis,
through this moment, and we will be stronger for it. In the meantime,
we have to do the right thing. The bill may not be perfect, but the
times will not wait for tomorrow. The times will not wait for us to
have a perfect bill. We have no choice but to act, and we need to act
now.
I encourage my colleagues to support this bill. We need a strong
bipartisan vote to send a message to the House of Representatives, to
send a message to America, that the Senate is going to stand strong and
do the right thing for the American people.
I yield back my time.
The PRESIDING OFFICER. Who seeks time?
Mr. DODD. Madam President, I yield to my distinguished friend and
colleague from California 5 minutes.
Mrs. BOXER. Madam President, I say thank you to the Americans whose
outrage at the administration's original blank check bailout stopped
that arrogant proposal in its tracks. We were all stunned. They and
their allies were telling us the fundamentals of our economy were
strong 2 weeks before we heard it was crashing. They had failed to use
the powers Congress had given them to stop bad mortgages. Where was the
oversight in their proposal? Where was the taxpayer equity? Where was
the control over CEO pay? The answer back from Mr. Paulson on a phone
call with dozens of Senators was: There would be no restrictions on
this bailout. Well, count me out.
A far better plan then emerged from the Banking Committees, but for
me it did not do enough.
I wrote to Mr. Paulson urging smaller installments; reforms. I pushed
for direct investments or loans rather than toxic acid purchases. We
didn't get it. But in this Senate legislation, we did get more FDIC
protection for bank depositors, which is crucial to deterring an
epidemic of bank closures, something that was at the heart of the Great
Depression.
Broader FDIC protection will help small businesses that need
certainty in meeting their payrolls. That is where working families
come in. Most working families today can't miss even one paycheck,
given our high cost of living. We need to retain and create jobs, which
is why I support another change in this legislation--$16 billion in
incentives for job-producing renewable energy businesses. Plus, there
are billions more in tax relief for businesses and individuals. We lost
84,000 jobs in August alone. We must act.
Another provision, originally written by Senators Wellstone and
Domenici, will keep many families from going bankrupt by ensuring that
mental health illness will be covered fairly. So this legislation
before us is much improved, and I hope it will pass.
I wish to share what California treasurer Bill Lockyer says will
happen if we do not act, but, first, Madam President, I ask unanimous
consent to have
[[Page 23563]]
printed in the Record a letter from Governor Schwarzenegger.
There being no objection, the material was ordered to be printed in
the Record, as follows:
October 1, 2008.
Dear Members of the California Congressional Delegation:
It's now very clear that the financial crisis on Wall Street
is affecting California--its businesses, its citizens' daily
lives and its state government's ability to obtain financing
to pay for critical services.
This is how serious the situation is: our State Treasurer
warns that the credit market has already frozen up to the
point that it chills even the State of California's ability
to meet its short-term cash flow needs. Additionally, without
immediate action from you and your colleagues in Congress,
California will be unable to sell voter-approved bonds for
the highway, school, housing and water construction projects
that our state is relying on to help carry us through this
difficult economy. The state of our already-slow economy
makes the financial situation even more urgent.
It is daunting that California, the eighth-largest economy
in the world, cannot obtain financing in the normal course of
its business to bridge our annual lag between expenditures
and revenues. This means California may soon be forced to
delay payments for critical services, such as teachers, law
enforcement and nursing homes. The same thing would happen to
California's counties and cities. That is, unless Congress
acts quickly to restore confidence in our financial system.
I am writing to urge you to vote in favor of the Emergency
Economic Stabilization Act. This plan is critical to the
well-being of every community in California, and across the
nation. Swift action in Congress is needed to restore
confidence in our financial system.
Let's be clear, this plan is not a ``bailout'' for Wall
Street. To the contrary, the plan is about protecting Main
Street.
We are currently witnessing the initial consequences of
depositors and investors withdrawing assets from a financial
system in which they have lost confidence and putting them in
FDIC-insured accounts and federal obligations. That means
there's little money for normal commerce and what money is
available is too costly. This dramatically reduces economic
activity, translating into fewer jobs, lower wages, reduced
savings and threatened pensions. If the stabilization plan
fails, these outcomes will materialize in scale.
California's businesses, both large and small, also face
the prospect that banks will not be able to renew loans. It
goes without saying that, when people and companies can't get
the money to buy cars, inventory goods, plant crops, expand
business and go to school, economic activity slows down,
leading, to job losses, wage reductions, savings declines and
pension failures all along Main Street, California.
The situation is urgent. The crisis we face demands swift
action and bipartisan leadership. Congress must pass this
economic stability plan without further delay.
Sincerely,
Arnold Schwarzenegger.
Mrs. BOXER. Madam President, our treasurer says we would not be able
to sell voter-approved highway, school, and water bonds that are
desperately needed for California's economy and for the creation of
good-paying new jobs. He says they would not be able to get the credit.
California also desperately needs access to short-term borrowing from
banks to finance our budget.
Now, how did we get here? There are a lot of people saying don't
point fingers and don't talk about it. I am going to talk about it. It
was deregulation fever. That is my opinion. It started in the 1980s,
with lawmakers interfering with Federal regulators over the savings and
loan crisis. It continued in 1995, when the Republicans took over and
they wanted to place a moratorium on all new regulations.
That effort failed, but their success came in 1999, when Senator Phil
Gramm and his allies tore down the firewalls that separated various
financial institutions. And then the deregulation of the energy
business. You all remember Enron and those traders--that is T-R-A-D-E-
R-S--saying: Well, grandma can't pay the bill, isn't it funny?
Phil Gramm recently said we are a nation of whiners. I say his legacy
is a disaster.
I believe, and I hope, this package will do what is needed to restore
trust in the short term. For the long term, we need regulatory reform
and change that will bring us job-producing investments in America, not
in foreign lands. Remember, $10 billion a month is going to Iraq. We
need those dollars here at home.
So I look forward to that work on behalf of my great State of
California and this great Nation.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Hampshire.
Mr. GREGG. If I could engage the chairman in a colloquy, as I
understand it, we have about 15 minutes left on our side under the
bill.
The PRESIDING OFFICER. There is 14 minutes remaining on the minority
side.
Mr. GREGG. Fourteen minutes. How much time remains on the majority
side?
The PRESIDING OFFICER. Seven minutes on the majority side.
Mr. GREGG. Then I understand we are going to Amtrak for half an hour?
The PRESIDING OFFICER. The Senator is correct.
Mr. DODD. If I may inquire of my good friend and colleague who has
been very generous, I may ask for a little generosity in terms of time.
I am running into a crunch, and I have a couple Members who may wish to
speak for a couple minutes. But let me get to that point.
Mr. GREGG. I thank the chair.
The PRESIDING OFFICER (Mr. Casey). The Senator from New Hampshire is
recognized.
Mr. GREGG. Mr. President, we are here at a very significant time
relative to the Congress's responsibility to act and try to avoid a
significant crisis for our Nation. I listened to Ranking Member Shelby,
former Chairman Shelby, whom I have the most tremendous respect for.
And you know, when you think about how we got here, had this Nation
listened to Richard Shelby, we probably wouldn't be here. If there had
been adequate capital formation of these institutions, if there had
been adequate oversight, if there had been proper underwriting, we
wouldn't be here.
Unfortunately, we are here, and the hand we have been dealt is a
pretty bad hand, and the options are few. Our situation as a Congress
is this: If we fail to act, we will fail the Nation. We will fail our
constituents, we will fail the people on Main Street, and we will fail
future generations.
The problem has been outlined here eloquently by a number of
speakers. The Senator from Massachusetts, the Senator from South
Carolina, and the Senator from Florida, since I have been on the floor.
I know earlier today a number of Members spoke brilliantly about the
problem. But let me simply restate it because we need to understand it
clearly.
This isn't so much about the problem of Wall Street. This is about
the problem that is coming at Main Street. America runs on credit--
credit that is easily available and reasonably priced. There are very
few Americans who haven't borrowed money to buy their car, to send
their children to college or to expand their home. There are very few
small businesses in this Nation--whether it is a restaurant on Main
Street or a shoe store on Main Street or the local person who is taking
a risk in the software industry--very few businesses in this Nation,
small, medium or large but especially small that don't depend on their
line of credit from the bank which finances them through difficult
times and allows them to buy the things they use to resell. What we are
seeing today is a closing down of that credit so the person on Main
Street would not be able to buy a car, would not be able to send their
child to college, and the people who pay them would not be able to
finance their payroll, would not be able to buy the inventory they need
in order to be financially successful, and the contraction feeds on
itself and grows and expands.
It has been described here a number of times by the example of a
four- or eight-lane highway--in New Hampshire, it would be a four-lane
highway--where you had a crash that blocked the highway. And behind
that crash you had trucks carrying the checks that pay the people who
work in town; you have trucks carrying the checks that maintain the
hospitals, maintain the school system, allow the kids in the town to go
to college, and
[[Page 23564]]
allow the city to pick up the garbage, pave the streets, patrol the
streets, and protect the people against fire. Those trucks are all
stuck in that traffic jam and they can't move. What the Federal
Government is suggesting we do, what the Treasury Department has
suggested we do, and what we have worked out as a program to do is to
come in, as a government, and take that crash off the highway so
commerce can occur again in a reasonable manner.
Now, we have heard a lot about the cost of this program. There has
been an immense amount of misrepresentation and theater and hyperbole
and I am afraid some people in our society have decided to demagogue
this issue for their own personal aggrandizement and benefit. They say
it is $700 billion thrown at Wall Street to protect the fat cats of
Wall Street. Well, that simply is inaccurate. We are going to put $700
billion into the process, but with that $700 billion we are going to
buy assets, assets that have real value.
We are not throwing it out the window. What we are going to do is
take nonperforming loans, mortgage-backed securities off the books of
banks and allow those banks to replace those loans with assets they can
lend against. What does that do? It creates credit. It allows those
banks to start lending again. They can't lend today because they have,
as their base, nonperforming assets. They can't lend against those
assets. Their capital isn't adequate.
So we are going to take those assets, and we are going to hold them
as a Federal government. We are going to take them at a fairly big
discount from their face value. If it is a mortgage note, we might take
it at 20 or 30 percent below what the original note was issued at. Then
we are going to work with the people who have those mortgages, those
people in homes who have those mortgages, if they are the principal
residents of those homes and they have a job, and we are going to try
to make it so there is no foreclosure against them, so they can stay in
their home and so they can pay that mortgage. By doing that, we are
going to make those mortgages valuable again. As the economy starts to
recover, we are going to take those mortgages and we will resell them
into the market or hold them until they are paid off. In either
instance, it is very likely the taxpayers' dollars will be recovered;
that there will be no loss to the taxpayer.
So when we hear these people in the public market, these talking
heads, so to say, claim we are about to spend $700 billion to benefit
Wall Street, they are totally inaccurate. Actually, what we are doing
is we are trying to spend money to free up credit on Main Street so
people can keep their jobs and at the same time do it in a way that
protects the taxpayers of America by getting value back.
Now, after the original proposal came up here from the Treasury, at
the request of the Congress, through the negotiation process with House
and Senate Democrats and House and Senate Republicans at the table, we
also did a few other things which I think were very good.
No. 1, we said any revenues we get from this--and we are going to get
a lot of revenues. If we spend $700 billion, we may get $600 billion
back, maybe $700 billion or we may get $800 billion back. All those
revenues will go to reduce the Federal debt. It is not going to go to
new programs. It goes to reduce the Federal debt. We intend to protect
the taxpayer.
In addition, we said that if somebody participates in this program,
we are not going to allow them to get a windfall. We are going to put a
strict limit on their ability to get excess compensation if they are
senior members of the company that participates. We are going to limit
golden parachutes. We are going to make it clear that there can't be
that type of gaming of the system.
In addition, we are going to take something called warrants on behalf
of the American taxpayer. That says if there is an upside--beyond just
getting the money back from the notes we take--if there is an upside to
that company, we may benefit in it. If we buy the nonperforming debt
off the books of the company at too high a price and there is a
downside, the company will have to give us some equity to cover that.
So the taxpayer, again, is protected, and we don't have excessive
compensation.
As I mentioned earlier, we put in language, under the leadership of
the chairman of the committee, Senator Dodd, which we said that for
people in their homes the stress will be to keep them in their homes.
The prejudice will be to keep them in their homes. We don't want
foreclosures.
Equally importantly, we put in place tremendous regulatory oversight
so there will be absolute transparency and so the American people can
look at what is happening and know what is happening and know what is
being done. It will be reviewed. We have an oversight board headed up
by the Federal Reserve Chairman, we have an oversight board for the
Congress, and we have a special prosecutor and a special GAO team. In
addition, we have a number of reports which are necessary to go
forward.
Now, if we do all this, will it solve the problem? Is the economy
suddenly going to turn around? No. No, it is not. We are in a very
difficult economic time. There will be other failures, there is no
question about it. There will be financial failures, and the economy
will probably continue to slow. But if we fail to do this, we will
confront catastrophic events which will affect every American in the
area of their income and their savings. People will lose their jobs if
we don't do this, literally hundreds of thousands of people,
potentially. Tens of thousands anyway. Their assets will be reduced and
their ability to have a normal commercial life on Main Street, to have
a normal activity, will be dramatically harmed.
We saw a little glimmer of what is out there if we fail to act on
Monday, when the stock market fell 777 points, which represented losing
$1.2 trillion of American assets. That meant pension funds, 401(k)s,
IRAs, and things people depend on were dramatically reduced. People
close to retirement were shocked by that, and all of us were stunned.
It was a statement by the markets of what they think would happen if we
do not act and act aggressively and boldly, as this proposal is both
aggressive and bold.
Some will say: Well, the markets have come back so it doesn't matter.
Look at that. The markets have come back because they presume the
Congress will act in a commonsense way and that we will actually pass
this piece of legislation.
There is no question but that this is a time that tries the political
soul of this institution. A ``yes'' vote here, as the Senator from
Connecticut has mentioned a number of times, doesn't get you a whole
lot of accolades anywhere. But there are times when, as Members of this
body, we have a responsibility to act in a mature, thoughtful, and
appropriate way, with our fundamental purpose being to avert a clear
and present crisis that is going to confront this Nation. This is one
of those times. To do nothing would neither be logical nor responsible.
So we need to act. We need to pass this proposal.
I wish I could say that when we pass this the Nation will suddenly
fire up and be reenergized and we will not see a further slowdown. That
is not going to happen. But if we fail to pass this bill, I am fairly
confident, as has been said by a number of people, including both
Presidential candidates, the results will be a great period of trauma
for our Nation, especially for everyday Americans who do not deserve
it. They don't deserve it. That is why it is our responsibility to act
at this time.
This is the vehicle before us. This is the opportunity that presents
itself, to take action to try to mitigate what will be an
overwhelmingly damaging event. Therefore, we should be voting for this
piece of legislation.
I reserve the remainder of my time.
Mr. DODD. I yield 5 minutes to the Senator from Washington.
The PRESIDING OFFICER. The Senator from Washington is recognized.
Ms. CANTWELL. Mr. President, I don't think 5 minutes would possibly
be enough time for me to explain all the things I would like to say. I
am
[[Page 23565]]
sure I could spend an hour talking about credit default swaps. I am
sure I could spend 2 days talking about the lack of transparency in the
financial markets. I am sure I could spend a lot of time explaining
what I think is the right thing we should do to put as much liquidity
into the markets as possible. So I will try to be succinct.
I came to the Senate knowing what it is like to take a tough vote. To
make a decision that is right for the American public. It's most
important to do the right thing. I also know what it is like to see
millions of dollars in the stock market go away and watch a stock
bubble burst. I also know what it is like to stand on the Senate floor,
as I did 3 years ago, when someone tried to cram legislation in the
Defense authorization bill to open up drilling in the Arctic Wildlife
Refuge, and I said then that it was the equivalent to legislative
blackmail.
I am not going to vote for this legislation tonight based on whether
someone crams in tax credits, for which I actually have fought so hard.
I am going to render my decision based on what I think is important for
the American people.
I think there is something that is missing in our discussion. I
applaud Chairman Dodd who has worked hard on the Banking Committee. I
applaud my colleague who just spoke, who spoke eloquently about the
need to do something. But the problem with the legislation before us is
that it is choosing winners and losers in corporate America. It is
inserting the Federal Government in a role in which they decide, along
with the private sector, exactly how funds should be allocated.
I am for the full faith and credit of the U.S. Government backing
these institutions. What I am not for is turning the keys to the
Treasury over to the private sector.
There is much we could agree on tonight. We could agree on the new
changes to the FDIC rule. We could agree on mark to market accounting
changes and to bringing better marketing and accountability to the
system. We could agree on the uptick rule and other predictability
measures that help the market understand that there is a broad
commitment by this institution to do something to help stabilize the
markets.
But I am very concerned about the ``pick here, pick there'' approach
that has transpired in the last several weeks. I ask you to just think
of one institution, in my State, Washington Mutual--which I would not
necessarily applaud for its subprime lending rates or for its use and
backing of credit default swaps, but I would ask you to consider the
fact that as that institution was forced into sale by this Government,
who were the winners and losers in that? J.P. Morgan got the assets of
that institution and benefitted from that. In fact, J.P. Morgan
predicted on a conference call the night they acquired Washington
Mutual that after 1 year with their investment, they would have an over
$500 million return on that investment. That is 27-percent returned in
1 year.
The FDIC got some money out of that, too. And then to say nothing
about the over 60,000 shareholders who were wiped out.
My complaint is: where is J.P. Morgan who should be standing up for
the retirement plans, the deferred compensation plans, and other
packages that the employees at that company were due?
It is very convenient for us to now choose that we are going to add
to J.P. Morgan's bottom line. In fact, if we would instead do what I am
suggesting, we could have an equity proposal instead of having TARP,
the Troubled Asset Relief Program, as the roof over America. Instead,
we could have an equity program where the United States would leverage
our capital and spur 10 to 12 times the private sector investment at
the same time, our Nation would be better funded, better prepared, for
the onslaught of trouble that is still going to remain after we pass
this legislation.
I could not even get my amendment to be considered. So, so much for
the transparency of the Senate.
I am going to continue to work for this idea, for equity, for a more
leveraged position, and that we do the traditional role that Government
has done time and time again: to use our equity to leverage the private
sector to secure our economy.
I yield the floor.
The PRESIDING OFFICER. Who yields time?
Mr. DODD. Mr. President, the Senator from Illinois wishes to speak. I
ask for 5 minutes.
The PRESIDING OFFICER. The assistant majority leader is recognized.
Mr. DURBIN. Mr. President, 13 days ago I sat in on a meeting just a
few feet away from this Chamber. At this meeting was the Chairman of
the Federal Reserve and the Secretary of the Treasury. There were about
12 of us in the room: the leadership from the House and Senate,
Democrats and Republicans. I listened as they told us in very serious
tones that unless we did something, there would be a meltdown of the
American economy and the global economy. And unless we acted quickly,
we could face a collapse of our economy, businesses would fail, people
would lose their jobs, they would lose their savings if we did not act.
That was a story told to 12 of us at the table who had heard a lot of
things as politicians, but we never heard anything like that before. Of
course, it was not told to us in the context of something we had never
heard or considered. With all of the problems of Fannie Mae and Freddie
Mac and Lehman Brothers and Bear Stearns and AIG, we knew there was a
problem with the economy. We didn't know it was that bad.
Obviously, the first question is, How did we reach this point, this
terrible crisis? I think it is very clear how we reached it. We reached
it with reckless deregulation of the credit industry. We stepped aside
and allowed these institutions to operate without oversight, without
transparency, without accountability, and greed took over. People were
making millions of dollars overnight, and they pushed the Government
aside and said: Don't get in our way. There is money to be made.
Of course, we have this because of the reckless behavior of those on
Wall Street who took advantage of the situation and a lot of innocent
people. I can recall offering amendments on this floor to stop
predatory lending practices like the subprime mortgage market
generated. I can recall debating the high priest of deregulation, Phil
Gramm of Texas, who warned that if Durbin's amendment would pass it
would destroy the subprime mortgage market. The year was 2001.
Wouldn't it have been better for America had my amendment passed and
that mortgage market come to an end? I lost that amendment on the floor
of the Senate by a vote of 50 to 49. The subprime mortgage market went
forward, bringing us to this crisis today.
The bill produced by this administration, by Treasury Secretary
Paulson, a three-page bill, easily read, was a stunning grab at power.
It said there would be no accountability, that the actions of the
Treasury Secretary in allocating $700 billion of taxpayer money could
not be held accountable in any court in this land or by any
administrative agency, and that any rules that were drawn up for his
conduct would not be subject to the normal public approval process. It
was an incredible grab for power.
We knew there was a crisis, but this was not the answer. Chris Dodd
of Connecticut and Judd Gregg of New Hampshire went to work with their
counterparts in the House, Democrats and Republicans, and made
significant changes in this bill, changes that protect taxpayers on the
upside so when the companies get well, the money will come back to us
as it should; to protect, as well, that taxpayers will not pay for the
million-dollar bonuses and golden parachutes of the CEOs who created
this mess.
If we have to buy their mistakes, for goodness' sake, do we have to
buy them a gold watch when they leave? No. In this bill we will not. We
provide the oversight to make sure that taxpayer dollars are watched
closely. We don't want any single-bid, Halliburton operations. We want
to make sure this
[[Page 23566]]
money is well spent by professionals who are held accountable.
I wish I didn't have to vote for this proposal. I can think of where
$700 billion could be better spent in America today for families across
Illinois and across this Nation. I would certainly be coming to the aid
of those who are facing foreclosure, 10,000 families a day who were
lured into the tricks and traps of these rotten mortgages and now stand
to lose their homes and everything they ever saved. There is not a
penny in this bill for the kind of help they need.
We talked about it, but when it came to the bankruptcy provision that
could have provided it, guess who overwhelmed us. The banks and the
mortgage lenders. They had the last word and took out that bankruptcy
provision.
I thank Chairman Dodd for his efforts in including it, and for a lot
of others, as well, on the House side. We didn't include it.
I wish I didn't have to vote for this bill, but if we fail to act and
this economy clearly does go into a meltdown, we cannot say that in
Congress we have met our responsibility by going home empty-handed.
I urge my colleagues to support this legislation.
The PRESIDING OFFICER. The Senator from Texas.
Mrs. HUTCHISON. How much time is remaining on our side?
The PRESIDING OFFICER. There remains 1 minute 16 seconds.
Mrs. HUTCHISON. Mr. President, I would like to reserve that time and
put it into the next bill coming forward, the Amtrak bill, so we would
then have 16 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered. The
majority has 4 minutes remaining.
Mr. DODD. Mr. President, I yield 3 minutes to my colleague and friend
from California.
The PRESIDING OFFICER. The Senator from California is recognized.
Mrs. FEINSTEIN. Mr. President, I understand I have 3 minutes.
The PRESIDING OFFICER. That is correct.
Mrs. FEINSTEIN. Mr. President, they say Senators have 6-year terms so
they can take tough votes when tough votes are called for, so that they
can vote for the best interests of their country even sometimes when
their constituents do not understand it or may be opposed to it.
I have received 91,000 phone calls and e-mails from California,
85,000 of them opposed to this measure. There is a great deal of
confusion out there. People don't understand. What was printed most
prominently was the original Paulson proposal, a proposal which gave
one man control over $700 billion to dispense as he chose, above the
law, with no administrative view or legislative oversight.
This is not that proposal. I thank the chairman of the Banking
Committee, both sides of the Banking Committee. It would be one thing
if we had a choice, but I do not believe we have a choice. Let me give
you an example.
In my State, we have 3.5 million small businesses. We have over 20
million people employed in those small businesses.
Now, some businesses function on cash. Most function on credit. When
credit is frozen, they cannot make payroll. And when they cannot make a
payroll, they give out pink slips. So you will see, through electrical
and plumbing contractors, retail establishments, even grocery stores,
computer stores, automobile sales, we are now hearing from people who
say they want to buy a home, they cannot get a mortgage; they want to
get a car, they cannot get a loan. This is what is beginning to happen.
This is not a give-away. This essentially is a strategic plan to buy
assets, both good and bad, to pump liquidity into the market, to be
able to free up credit, so that once again the economy can function.
The Government will hold these assets. Over time we believe they will
make money, and the Government will be the first paid back.
So I think if we do care about the livelihood of our constituents,
there is only one vote and it is yes.
This bill is not the bill that was put forward by Secretary Paulson
on September 20. His bill was essentially a nonstarter--startling in
its unbridled allocation of power to one man: the Secretary of Treasury
whom we know now, and to a Secretary of Treasury after January whom we
do not know.
It placed this man above the law, above administrative oversight and
above congressional action, and essentially gave him $700 billion to do
with what he thought best.
This bill didn't fly with virtually anyone who looked at it,
particularly constituents, who have called in the tens of thousands of
phone calls all across this land.
My office has received over 91,000 calls and e-mails with over 86,000
opposed. The bill before us is not Paulson's 3-page proposal. Rather,
it is a bipartisan effort that adds oversight, accountability,
assistance to homeowners, executive compensation limits, and other
measures to protect taxpayers.
But there still is a lot of misinformation on this bill.
This is not a $700 billion gift for Wall Street.
Rather, the--Federal Government will buy equity in certain assets,
both good and bad to pump liquidity into the marketplace and unfreeze
credit which is increasingly freezing and unavailable.
Over time, these assets will be sold and the Federal Government will
be the first paid back on the investment. The belief is that by doing
this the Federal Government will clear much of the bad debt on the
books of certain strategic financial institutions, restoring stability,
adding liquidity, and unfreezing credit.
Recently, we have seen major U.S. institutions fail: Bear Stearns,
Fannie Mae and Freddie Mac, Lehman Brothers, Merrill Lynch, and AIG.
And, two retail banks, not investment banks: Washington Mutual and
Wachovia. If we do nothing, more institutions will fail.
Now, you may say: What does this mean to me? I work hard, I pay my
bills, I pay cash.
Here's what it will mean to you: It will be harder for most Americans
to get any credit. Therefore, jobs will be lost.
And we may well face a deep recession.
California has 3.75 million small businesses with an average of 5.6
employees. That adds up to over 20 million jobs.
Some of these businesses are funded with cash, but most are funded
with credit. When credit freezes, payrolls cannot be met. And when
payrolls cannot be met, pink slips are sent out.
And this will happen to retailers, grocery stores, restaurants,
electrical and plumbing contractors, apparel manufacturers, computer
and electronics stores, and auto dealerships.
Sales at auto dealerships have fallen dramatically in the past year.
Ford sales are down 34 percent, Chrysler sales are down 33 percent,
Toyota sales are down 29 percent, and GM sales are down 16 percent.
The list will go on and on.
Importantly, there have now been several improvements to this bill.
First, The FDIC insurance rate covering bank deposits has been
increased from $100,000 to $250,000. Americans will know that their
deposits are secure up to $250,000.
The legislation will provide tax relief to working families.
One example: the Alternative Minimum Tax is a real problem. It was
meant to apply only to 200 wealthy people, but it was never adjusted
for inflation and it has crept down the income scale to the point where
more than 25 million taxpayers today may well have to pay an
Alternative Minimum Tax.
In California, 700,000 people paid this tax last year. But 4 million
Californians will pay that tax this year unless we take action.
This bill takes that action. For 1 year it will prevent this tax
increase.
The Congressional Budget Office has reviewed this bill and concluded
that the net cost to taxpayers is ``likely to be substantially less
than $700 billion.''
Again, these investments are first in line to be paid back.
[[Page 23567]]
It must be remembered that there was a great deal of criticism when
the U.S. Government bailed out Mexico in 1996 with $20 billion. The
fact is, the money was paid back ahead of time and $600 million in
profit was made.
Let me give you the following points. This bill mandates that the
Government provide loan modifications for the subprime mortgages it
acquires. This will help keep families in homes rather than foreclosing
and putting the house on a deteriorating housing market where property
values drop and homes are looted. The bill limits executive
compensation. It provides strong oversight and accountability,
including a financial stability oversight board, a five-member
congressional oversight panel, an inspector general, and a constant
presence at Treasury by the Government Accountability Office.
This is the only choice Congress can make.
One can rail against it and vote ``no'' on it, but that is not going
to solve the problem. We have one chance, and one chance only, to solve
the problem, and it is this bill.
I wish I could write it differently. Others wish they could write it
differently, but the fact is that we are faced with this. Again, there
is no question this is a tough vote.
But there is no question that this is a vote that I believe has to be
made.
CONTRACTING PROCESS
Mr. MENENDEZ. Chairman Dodd, with the scale of this undertaking and
the volume of assets that will be managed, I want to ensure that the
contracting provisions for asset managers under the package lead to the
engagement of financially sound institutions that have the best and
brightest financial minds.
The package gives the Treasury Secretary broad authority, including
the explicit authority to waive certain portions of Federal acquisition
regulations when retaining asset managers. Along those lines, I want to
ensure that, despite the safeguards that have been provided, the
Secretary does not take a narrow approach but, rather, seeks the
broadest collection of asset management experts to assist him.
Therefore, I ask my colleague from Connecticut, the chairman of the
Banking Committee, do you believe that it is the intent of Congress
that the contracting process must be as full and open as possible and
that the Secretary should consider a broad range of asset managers,
including broker-dealers, insurers, and other experts?
Mr. DODD. I absolutely agree with the gentleman from New Jersey. The
scale of this undertaking is vast, and the exposure to the taxpayer
must be well managed. Therefore, I urge the Secretary to look broadly
for the best expertise in assisting him in managing this program.
Mr. MENENDEZ. I thank the Senator.
BIOMASS
Mr. NELSON of Florida. Mr. President, I have been working with
Chairman Baucus and his staff for the past year on an amendment to the
section 45 production tax credit. My amendment modifies the definitions
of qualified open-loop and closed-loop biomass facilities to clarify
that additional power generation units placed in service at existing
qualified facilities are eligible for the production tax credit.
This clarification was necessary to remove an ambiguity as to whether
such additional units of power qualify for credit. This ambiguity was
inadvertently created by language in the Energy Policy Act of 2005
relating to additional units of power appended to municipal sold waste
facilities.
As you know, my concern has been that the failure to clarify that
additional units of power do qualify for the credit will discourage
taxpayers from expanding existing biomass electricity production
facilities and, thus, from producing more renewable biomass
electricity.
However, it appears that the language that was adopted by the Senate
on September 23 does not achieve the goal of eliminating this ambiguity
in all circumstances. Is that your understanding as well?
Mr. BAUCUS. Yes, it is. I understand your concern that the language
in the bill we adopted on September 23 could still leave some taxpayers
in an ambiguous position with respect to additional units of power
added to biomass facilities qualifying for the credit. Let me assure
you that my staff and I will continue to work with you to address this
matter.
Ms. SNOWE: I want to thank the chairman of the Finance Committee as
well as Senator Bill Nelson for their work on addressing the
incremental biomass production ambiguity. Clearly, at a time when our
Nation's manufacturing industry is besieged by historic energy costs,
we must provide the incentives for expanded biomass production. The
production tax credit was intended to be provided for companies that
expand their production in and beyond 2005, and I believe we must have
concise and clear language that these facilities should receive the
credit for producing renewable energy in their operations. I look
forward to working with Chairman Baucus, Ranking Member Grassley, and
Senator Nelson to reconcile this inadvertent confusion.
basis reporting
Mr. BAUCUS. Mr. President, the energy policy in the pending
legislation is partially paid for by a proposal that requires brokers
to report to their clients and to the IRS the basis of securities that
are sold during the year. This provision expands existing information
reporting requirements that require brokers to report the sales
proceeds of securities that are sold. The IRS estimates that in 2001
the tax gap associated with all capital gains was about $11 billion.
Providing this information will reduce burden on axpayers and increase
the accuracy of tax returns that are filed.
Mr. GRASSLEY. Senator Baucus and I asked the Government
Accountability Office to review the accuracy of tax returns that are
filed reporting capital gains. The GAO found that as many as 7 million
individual taxpayers, or 36 percent, who sold securities in 2001 may
have misreported capital gains or losses, and around half of those
taxpayers did so because they misreported their basis. This information
reporting proposal will reduce errors and help taxpayers to file their
returns more accurately.
Mr. BAUCUS. Congress intends that the Treasury Department issue
guidance and regulations that will help brokers implement this
reporting requirement, including the issue of year-end
reclassifications. The existing regulatory authority under Internal
Revenue Code section 6045 fully applies to the new basis reporting
rules proposed in this legislation.
Mr. GRASSLEY. The Congress further intends that the IRS will exercise
its administrative authority to revise forms and take other actions as
appropriate to help brokers and taxpayers understand and comply with
this new law so that burden is reduced, errors decrease, and compliance
is enhanced.
VEHICLE TAX CREDIT
Mr. BAYH. Mr. President, I rise today to seek clarification of an
important provision that was included in the tax extenders package that
the Senate approved on September 23.
As my good friend knows, the Senate amendment to H.R. 6049
establishes in section 205 a new tax credit for plug-in electric drive
vehicles. The credit is for passenger vehicles and light trucks and
varies in amount depending on the vehicle's weight and battery
capacity. Your leadership has been critical to securing this credit,
which I strongly support because it will help reduce America's
dependence on foreign oil by giving people incentives to build and
purchase advanced, fuel-efficient vehicles.
Indiana has consistently been a key contributor to innovation in
vehicle manufacturing. We are proud that our auto manufacturers and
suppliers are focused on building the next generation of fuel-efficient
vehicles and components. This plug-in electric drive motor vehicle tax
credit is essential to help consumers overcome any hesitation to
purchase these vehicles and to provide investors with confidence that
the Government is committed to the electrification of our Nation's
transportation sector.
Section 205 of the Senate-passed amendment to H.R. 6049 describes the
vehicles that would qualify for the tax
[[Page 23568]]
credit. Eligible vehicles include, in part, motor vehicles with at
least a 4 kilowatt hour battery used for propulsion, an offboard energy
source to recharge the battery, and in the case of passenger vehicles
or light trucks of no more than 8,500 pounds, a certificate of
conformity under the Clean Air Act.
The bill language does not expressly state whether a van would
qualify, but many commercial and government fleets use vans.
The relevant Environmental Protection Agency regulations referred to
by the bill, such as 40 C.F.R. 86.082-2, define a van as a ``light-duty
truck.'' It would appear that the committee intends that a plug-in
electric drive van, meeting the appropriate weight and emission
standards, would qualify for the new tax credit for plug-in electric
drive motor vehicles. Mr. Chairman, is this analysis of the committee's
intent correct?
Mr. BAUCUS. To my good friend from Indiana, the answer is yes. The
new tax credit for plug-in electric drive motor vehicles was intended
to be, within weight and emission limits, vehicle design neutral. Vans
are clearly a subset of light trucks and would be eligible if they meet
the weight, energy, and emission criteria under the provision.
administrative procedures act review
Mr. LEAHY. As the Senate considers extraordinary legislation to
address the current economic crisis, I believe it is imperative for the
Record to reflect the intent behind the provisions I worked with
Senator Dodd to include in this legislation. In an effort to ensure
that there is no doubt about what we intended, I would ask the Banking
Committee chairman, Senator Dodd, whether it is his understanding that
our efforts to ensure that any actions taken by the Treasury Secretary,
under the authority of this legislation, be reviewable under the
Administrative Procedures Act.
Mr. DODD. I would say to the distinguished chairman of the Judiciary
Committee that is what we intend.
M. LEAHY. And the provision we have included in section 119 of the
Senate's legislation, to ensure that this review is available, the word
``law,'' as it is used, means any State or Federal law, or common law
interpreting such State and Federal laws?
Mr. DODD. Yes. The Senator from Vermont is correct. My understanding
and intent is that this section would allow for review in the event any
action by the Treasury Secretary was in violation of any State or
Federal statute, or common law interpreting a statute.
Mr. LEAHY: I thank the Senator. It is not our intent to permit the
Treasury Secretary to quash or alter any private right of action on the
part of shareholders of entities from which the Secretary purchases
assets, nor allow the Secretary to confer immunity from suit any
participating financial institution.
Mr. DODD. I would say to the Senator from Vermont that is correct as
well.
Mr. LEAHY. And with the savings clause we have added to the
legislation, we also intend to prohibit the Treasury Secretary from
interfering with or impairing in any way the claims or defenses
available to any other person. For example, no person's claims in
relation to any assets purchased by the Treasury Secretary under the
Truth in Lending Act should be impaired, and no person who has been
harmed by the conduct of a financial institution should have their
claims affected in any way. Is this the understanding of the Senator
from Connecticut as well?
Mr. DODD. It is. That is what we intend.
Mr. LEAHY. And by agreeing with the administration's request to
automatically stay on appeal injunctions issued against the Treasury
Secretary for actions taken under the authority of this legislation, we
have assured that existing waivers of sovereign immunity under the
Tucker Act, the Contracts Dispute Act, the Little Tucker Act, the
Federal Tort Claims Act, and relevant civil rights laws would apply to
the Treasury Department's new responsibilities, just as these laws have
applied to the Treasury Department's actions prior to the bailout
measure. Is that correct?
Mr. DODD. I say to the chairman of the Judiciary Committee that is
what we intend with the savings clause.
Mr. LEAHY. We also included a provision to make sure that mortgagers
whose mortgages are purchased by the Treasury maintain all of the
claims and defenses they have in relation to those loans, whether
pursuant to their contracts, or under State or Federal consumer
protection law. It is not our intent to deprive homeowners any recourse
they may have against lenders who committed fraud or other violations
of law in inducing any homeowner into taking a mortgage. Does the
Chairman of the Banking Committee agree with me on this point?
Mr. DODD. I do.
Mr. LEAHY. And finally, I ask as a general matter whether the Senator
from Connecticut agrees with me that civil litigation brought by
shareholders, or by or on behalf of financial institutions that
purchased troubled assets, against officers, directors, and in some
cases counterparties whose alleged misconduct caused or contributed to
their losses, are matters for the justice system to resolve?
Mr. DODD. I agree with the chairman of the Judiciary Committee.
Mr. LEAHY. I thank the distinguished, chairman of the Banking
Committee, Senator Dodd, for engaging in this colloquy. And I thank him
for consulting me early in this process to ensure that any legislation
the Senate considers contains appropriate safeguards to ensure that the
extraordinary authority given to the Treasury Secretary is reviewable,
and that the rights of American citizens are preserved.
auto financing company loans
Mr. LEVIN. As Treasury implements this new program, it is clear to me
from reading the definition of financial institution that auto
financing companies would be among the many financial institutions that
would be eligible sellers to the government. Do you agree?
Mr. DODD. Yes, for purposes of this act, I agree that financial
institution may encompass auto financing companies.
Mr. LEVIN. I thank the Senator. It also seems clear from the
definition of troubled assets that, should the Treasury Secretary,
after consulting with the Chairman of the Federal Reserve, determine
that purchasing auto loans would promote financial market stability by
opening up the market for car sales, that Treasury has the authority to
make such purchases, so long as it transmits that determination to
Congress.
Mr. DODD. Yes, should the Treasury Secretary, after consulting with
the Chairman of the Federal Reserve System, determine that purchasing
auto loans is necessary to promote financial market stability and
transmits such determination in writing to the Congress, then the
Treasury Secretary could engage in such purchases.
I am keenly aware of these issues as Chairman of the Banking
Committee, which has jurisdiction over financial aid to commerce and
industry and which wrote the Chrysler Corporation Loan Guarantee Act of
1979.
Ms. STABENOW. First, I want to commend Chairman Dodd for his
leadership on this bill. The credit crisis is having a significant
impact on the hard-working men and women at GM in Michigan and
throughout the country who proudly build American-made cars and trucks;
the men and women who sell and finance Chrysler vehicles; and the
individuals who service Ford vehicles in dealerships throughout the
country.
With the credit markets having largely frozen up, domestic automobile
manufacturers and finance companies face the most difficult conditions
they have faced in decades. They have been hit with a double whammy:
high gasoline and diesel prices, coupled with evaporating credit.
Considering the importance of the auto industry to our country I
wanted to reiterate the points raised by my colleague, by clarifying
that the Treasury has the authority to purchase auto loans and that
auto financing companies could participate in the program if
[[Page 23569]]
determined necessary by the Treasury, after consulting with the
Chairman of the Federal Reserve System, to promote market stability.
Mr. DODD. This is correct. As previously stated, an auto financing
company could be included in the definition of financial institution
and auto debt could be included in the definition of troubled assets
after the appropriate steps are taken.
Ms. STABENOW. I thank the Chairman. By getting credit back into the
hands of our motor vehicle industry, we can help Main Street survive
the credit crunch. We can get people back to work. And we can get cars
and trucks moving again throughout the country.
definition of a financial institution
Mr. REED. Mr. President, I would like to ask of the Committee on
Banking, Housing, and Urban Development a question.
Is it Chairman Dodd's understanding that the definition of a
financial institution in section 3(5) of the Emergency Economic
Stabilization Act includes the holding companies of such institutions
described as ``any bank, savings association, credit union, security
broker or dealer or insurance company''?
Mr. DODD. Yes, I completely agree that this would include holding
companies of such companies listed and other companies that the
Secretary may determine are eligible for this program.
Mr. REED. Section 113(d) of the Emergency Economic Stabilization Act
states that warrants should be issued for companies that sell their
assets to the Secretary, under the requirements of the section. Is it
Chairman Dodd's understanding that if a company selling such assets is
a subsidiary that is not traded on an exchange but that has a holding
company or parent that is traded on an exchange, that the stock of such
holding or parent company would be referenced in the warrant?
Mr. DODD. Yes, it is the intent of the committee and of the Congress
that this section intends that the securities of the parent or holding
company of such a subsidiary would be used in the warrant. Nothing in
this language is intended to exclude holding companies of subsidiaries
and warrants should be exercised to the greatest extent possible for
the benefit of the taxpayer.
Mr. REED. If I could ask one more question of the chairman, certain
off-balance sheet entities or affiliates may sell troubled assets to
the Government, to include but not limited to structured investment
vehicles, qualified special purpose entities, special purpose entities,
conduits, shell companies, and other legal entities. Is it the case
that such entities or their holding or parent company would be required
to enter into warrants with the Government?
Mr. DODD. Yes, I agree that this is the case and that it was the
original intent of the committee and of the Congress to ensure that
warrants are exercised to the greatest extent for the benefit of the
taxpayer, to include recovery of losses and administrative expenses
along with a premium set by Treasury.
tax credit investments
Mr. CARDIN. Mr. President, I want to commend the senior Senator from
Connecticut, who chairs the Committee on Banking, Housing and Urban
Affairs, for the extraordinary effort he and his staff have put in over
the past several days to bring us to the point where we are preparing
to vote on an economic stabilization package. While we all regret being
in this situation, I think there is widespread recognition that we need
to act to get our financial and credit markets operating again.
I have one particular concern I would like to address to the
chairman, if I may. One of the problems created by the turmoil in the
financial and credit markets is that many of the institutions needing
liquidity, or those which normally would provide liquidity to the
marketplace, hold illiquid low-income housing tax credit investments,
many of which require further funding. These tax credit investments
exist at the expense of the Federal Government since the holders of
these investments achieve their return by taking credits against their
taxes in the form of the section 42 low-income housing tax credit,
LIHTC. Among the institutions with substantial holdings and which have
historically provided liquidity to this market, but which can and no
longer do so, are Fannie Mae and Freddie Mac, as well as several of the
banking institutions which have been most adversely affected by the
crisis in the markets. The ability of these institutions to use the
credits has been severely impaired, and I am deeply concerned that, as
with so many other financial assets, the holders will dump them into
the market at distressed prices. The buyers at these distressed prices
will be the very institutions that would have bought new credits at
nondistressed prices. The result will be that instead of investing new
money in new affordable housing, these buyers will instead use that
money to buy existing credits at distressed prices and much less money
will flow into the production of new affordable housing in the next few
years. In fact, the turmoil in the capital markets has already severely
restricted the flow of new funds into new affordable housing and this
market has taken a serious downturn at a time when adding to the stock
of affordable housing is critically important.
I would like to ask Chairman Dodd if he believes that his amendment
to H.R. 1424--specifically, section 3(9)(A) of division A--gives the
Federal Government authority under the Troubled Asset Relief Program,
TARP, to purchase existing low-income housing tax credit investments
from the holders of those investments. Unlike many of the other assets
the Government may purchase in other sectors, these investments can be
purchased at little or no cost to the Treasury because the Government
is already paying for them in the form of tax credits.
Mr. DODD. Mr. President, I want to assure my colleague from Maryland
that I read that language as allowing such purchases, if necessary, to
maintain liquidity in this particular market. I want to commend him for
bringing this important matter to my attention as soon as we received
the original Treasury proposal. My staff informed Senator Cardin's
staff that Treasury officials believed the proposal they sent to
Congress authorized the purchase of such credits, and we concurred.
Mr. CARDIN. I thank the chairman for reassuring me. I think Treasury
would bolster the market tremendously if it purchases such credits
where necessary to: (1) create liquidity for those financial
institutions currently holding these credits; and (2) stimulate the
production of affordable housing in a market which has deteriorated
substantially--all at little cost to the Government.
Mr. DODD. Mr. President, my colleague from Maryland has made an
excellent suggestion for how Treasury ought to maintain liquidity with
regard to the LIHTC. I thank him for his concern. The housing crisis in
this country affects nearly everyone in some respect, including lower
income individuals and families who cannot afford to buy homes and
depend on the steady supply of affordable rental housing. My amendment
to H.R. 1424 gives Treasury the authority, flexibility, and resources
it needs to address this critical issue.
Mr. CARDIN. Mr. President, I thank the chairman for his assistance on
this matter. We are being reminded, in the most painful way, that not
all Americans can afford or want to own a home. Therefore, it is
imperative that we maintain and add to the stock of affordable rental
housing in this country during these difficult times. The LIHTC is the
mechanism for doing that.
section 101(c)(1)
Mr. AKAKA. Mr. President, I would like to ask the chairman of the
Senate Banking Committee, the Senator from Connecticut, a question
about the intent of section 101(c)(1) of the substitute amendment to
H.R. 1424.
Section 101(c)(1) of the bill provides the Secretary with direct
hiring authority, which is a useful tool to allow a Federal agency to
make an immediate employment offer to an applicant. It is my
understanding that this
[[Page 23570]]
provision merely waives the normal approval process of direct hiring
authority by the Office of Personnel Management and that section 101(c)
does not otherwise waive application of title 5. Does the chairman
agree with my interpretation?
Mr. DODD. Mr. President, I agree with the Senator from Hawaii's
interpretation of that provision.
Mr. AKAKA. I thank the Senator very much for that clarification.
carbon dioxide sequestration
Mrs. BOXER. Mr. President, I rise to enter into a colloquy with my
good friend Senator Baucus, the distinguished chairman of the Committee
on Finance. I wish to address section 115 of the bill, which provides a
tax credit for carbon dioxide sequestration. Specifically, in section
115 of the bill, new section 45Q(d)(2) of the code provides that the
Secretary of the Treasury, in consultation with the Administrator of
the Environmental Protection Agency, shall establish regulations for
determining adequate security measures for the geological storage of
carbon dioxide to qualify for the $20 per ton credit, such that the
carbon dioxide does not escape into the atmosphere or affect
underground sources of drinking water. Carbon dioxide sequestration in
this provision includes storage at deep saline formations and unminable
coal seems under such conditions as the Secretary may determine under
these regulations. Is my understanding correct that the legislation is
intended to require that EPA, in consultation with the Secretary of the
Treasury regarding the carbon sequestration tax credit under this
provision, will establish the specific substantive environmental
criteria and requirements for security and other measures for the
geologic storage of carbon dioxide such that it does not escape into
the atmosphere or affect underground sources of drinking water, and
that the Secretary of the Treasury will then apply such criteria and
requirements in establishing the requirements to qualify for the tax
credit under this section?
Mr. BAUCUS. Mr. President, the distinguished chairman of the
Committee on Environment and Public Works is correct. The legislation
is intended to leave the substantive environmental criteria and
requirements for carbon sequestration to EPA, including security-
related issues, and as was done with respect to carbon sequestration in
section 706 of the Energy Independence and Security Act of 2007, this
provision is not intended to limit the legal requirements and
authorities of EPA. EPA's criteria and requirements for carbon
sequestration will be applied by the Secretary of the Treasury after
consultation.
foreclosure prevention provisions
Mr. REID. I would like to ask the chairman of the Committee, Senator
Dodd, a question about the elements of this bill that deal with
foreclosure prevention. I know this has been a priority for the Senator
from Connecticut. I wonder if he could review the provisions of the
legislation that will help more Americans keep their homes.
Mr. DODD. I thank the leader for his question and for his leadership
in helping guide us through this crisis. He is exactly right. I have
been saying throughout this process that foreclosure prevention has
been one of the key reasons we need to move forward with the Emergency
Economic Stabilization Act.
The legislation has a number of key provisions dealing with
foreclosure prevention:
First, it requires that the Secretary of the Treasury ``implement a
plan that seeks to maximize assistance for homeowners'' in keeping
their homes. This means Congress has rejected an ad hoc approach by the
Treasury in favor of a programwide system to keep families in homes.
In the case where the Secretary owns whole loans, we expect him to
modify those loans to ensure long-term affordability for American
families. The legislation outlines that this should be done by a
reduction in principal, a reduction in the interest rate, a refinance
through the HOPE for Homeowners Program, or any equivalent method that
ensures that these hard working Americans are restored to sustainable
home ownership.
I want to remind my colleagues that millions of Americans were sold
loans that the mortgage brokers and lenders knew or should have known
the borrowers could never afford. These ``exploding'' adjustable rate
mortgages, ARMs, interest-only loans, and payment-option ARMs were
designed to entice borrowers with low initial payments. Yet, after a
couple of years, the payments would explode, increasing by 20 percent,
30 percent, or more. This is driving delinquency and foreclosure rates
to historically high levels and driving home prices down, creating the
economic downturn we are now facing.
Second, all other Federal agencies that own or control mortgages,
including the FDIC, the Federal Housing Finance Agency, FHFA, and the
Federal Reserve Board, must also implement plans to maximize assistance
to homeowners. The FDIC, under the leadership of Chairman Sheila Bair,
has already started down this road with the assets it has taken from
IndyMac Bank, and we expect the other agencies to work with the FDIC in
developing their own programs. The FHFA, which is the conservator for
Fannie Mae and Freddie Mac, now oversees hundreds of billions of
dollars of mortgages and mortgage-backed securities, MBS, which they
will now be obligated to aggressively modify as a result of this
legislation.
Third, one of the serious complications the modern mortgage market
has created is the difficulty of doing modifications for loans that
have been pooled and securitized into a host of MBS. It is often
difficult to get the various investors in the numerous MBS backed by a
particular pool of mortgages to all agree to do a modification.
This legislation, however, mandates that the Treasury and the other
Federal agencies that own or control MBS must aggressively pursue loan
modifications with other investors and must consent to all requests
from servicers for reasonable modifications. In fact, it is our hope
that the Federal Government will gain control of sufficient percentages
of these pools that their ongoing pursuit of modifications and
reasonableness in their willingness to accept offers that ensure
families can keep their homes will tip the balance and lead to more
modifications.
Finally, this bill includes three new provisions for the HOPE for
Homeowners that should expand its reach and allow us to help many more
homeowners avoid foreclosure and get into affordable, stable, FHA-
insured mortgages.
As I have been saying for well over a year, the epicenter of the
current financial and economic crisis is the housing crisis and the
heart of the housing crisis is the foreclosure crisis. I understand the
need to move to stabilize the financial system as a whole--that is why
I have devoted countless hours over the past weeks to negotiate this
final package.
But I would not support this bill, nor ask my colleagues to do so, if
I was not convinced that it adds important new tools to address the
core problem--rising delinquencies and foreclosures. Obviously, this
bill does not include everything I would want but it is an important
step forward.
Mr. REID. I want to thank my colleague for laying out these important
points. The Senator has been one of the earliest and strongest voices
raising the alarm about the danger of increased foreclosures. I thank
him for his leadership.
Mr. BAUCUS. Mr. President, I ask unanimous consent to have printed in
the Record the attached technical explanation of the tax provisions of
the Emergency Economic Stabilization Act of 2008.
There being no objection, the material was ordered to be printed in
the Record, as follows:
TECHNICAL EXPLANATION OF TITLE III (TAX PROVISIONS) OF DIVISION A OF
H.R. 1424, THE ``EMERGENCY ECONOMIC STABILIZATION ACT OF 2008''
Introduction
This document, prepared by the staff of the Joint Committee
on Taxation, provides a technical explanation of Title III
(Tax Provisions) of Division A of H.R. 1424, the ``Emergency
Economic Stabilization Act of 2008,'' scheduled for
consideration by the Senate on October 1, 2008.
[[Page 23571]]
A. Treat Gain or Loss from Sale or Exchange of Certain Preferred Stock
by Applicable Financial Institutions as Ordinary Income or Loss (sec.
301 of the bill)
Present Law
Under section 582(c)(1), the sale or exchange of a bond,
debenture, note, or certificate or other evidence of
indebtedness by a financial institution described in section
582(c)(2) is not considered a sale or exchange of a capital
asset. The financial institutions described in section
582(c)(2) are (i) any bank (including any corporation which
would be a bank except for the fact that it is a foreign
corporation), (ii) any financial institution referred to in
section 591, which includes mutual savings banks, cooperative
banks, domestic building and loan associations, and other
savings institutions chartered and supervised as savings and
loan or similar associations under Federal or State law,
(iii) any small business investment company operating under
the Small Business Investment Act of 1958, and (iv) any
business development corporation, defined as a corporation
which was created by or pursuant to an act of a State
legislature for purposes of promoting, maintaining, and
assisting the economy and industry within such State on a
regional or statewide basis by making loans to be used in
trades and businesses which would generally not be made by
banks within such region or State in the ordinary course of
their business (except on the basis of a partial
participation) and which is operated primarily for such
purposes. In the case of a foreign corporation, section
582(c)(1) applies only with respect to gains or losses that
are effectively connected with the conduct of a banking
business in the United States.
Preferred stock issued by the Federal National Mortgage
Corporation (``Fannie Mae'') or the Federal Home Loan
Mortgage Corporation (``Freddie Mac'') is not treated as
indebtedness for Federal income tax purposes, and therefore
is not treated as an asset to which section 582(c)(1)
applies. Accordingly, a financial institution described in
section 582(c)(2) that holds Fannie Mae or Freddie Mac
preferred stock as a capital asset generally will recognize
capital gain or loss upon the sale or taxable exchange of
that stock. Section 1211 provides that, in the case of a
corporation, losses from sales or exchanges of capital assets
are allowed only to the extent of gains from such sales or
exchanges. Thus, in taxable years in which a corporation does
not recognize gain from the sale of capital assets, its
capital losses do not reduce its income.
Explanation of Provision
Under the provision, gain or loss recognized by an
``applicable financial institution'' from the sale or
exchange of ``applicable preferred stock'' is treated as
ordinary income or loss. An applicable financial institution
is a financial institution referred to in section 582(c)(2)
or a depository institution holding company (as defined in
section 3(w)(1) of the Federal Deposit Insurance Act (12
U.S.C. 1813(w)(1)). Applicable preferred stock is preferred
stock of Fannie Mae or Freddie Mac that was (i) held by the
applicable financial institution on September 6, 2008, or
(ii) was sold or exchanged by the applicable financial
institution on or after January 1, 2008, and before September
7, 2008.
In the case of a sale or exchange of applicable preferred
stock on or after January 1, 2008, and before September 7,
2008, the provision applies only to taxpayers that were
applicable financial institutions at the time of such sale or
exchange. In the case of a sale or exchange of applicable
preferred stock after September 6, 2008, by a taxpayer that
held such preferred stock on September 6, 2008, the provision
applies only where the taxpayer was an applicable financial
institution at all times .during the period beginning on
September 6, 2008, and ending on the date of the sale or
exchange of the applicable preferred stock. Thus, the
provision is generally inapplicable to any Fannie Mae or
Freddie Mac preferred stock held by a taxpayer that was not
an applicable financial institution on September 6, 2008
(even if such taxpayer subsequently became an applicable
financial institution).
The provision grants the Secretary authority to extend the
provision to cases in which gain or loss is recognized on the
sale or exchange of applicable preferred stock acquired in a
carryover basis transaction by an applicable financial
institution after September 6, 2008. For example, if after
September 6, 2008, Bank A, an entity that was an applicable
financial institution at all times during the period
beginning on September 6, 2008, acquired assets of Bank T, an
entity that also was an applicable financial institution at
all times during the period beginning on September 6, 2008,
in a transaction in which no gain or loss was recognized
under section 368(a)(1), regulations could provide that
Fannie Mae and Freddie Mac stock that was applicable
preferred stock in the hands of Bank T will continue to be
applicable preferred stock in the hands of Bank A.
In addition, the Secretary may, through regulations, extend
the provision to cases in which the applicable financial
institution is a partner in a partnership that (i) held
preferred stock of Fannie Mae or Freddie Mac on September 6,
2008, and later sold or exchanged such stock, or (ii) sold or
exchanged such preferred stock on or after January 1, 2008,
and before September 7, 2008. It is intended that Treasury
guidance will provide that loss (or gain) attributable to
Fannie Mae or Freddie Mac preferred stock of a partnership is
characterized as ordinary in the hands of a partner only if
the partner is an applicable financial institution, and only
if the institution would have been eligible for ordinary
treatment under section 301 of the bill had the institution
held the underlying preferred stock directly for the time
period during which both (i) the partnership holds the
preferred stock and (ii) the institution holds substantially
the same partnership interest.
In particular, substantial amounts of the preferred stock
of Fannie Mae and Freddie Mac are held through ``pass-through
trusts'' analyzed as partnerships for Federal income tax
purposes. Substantially all the assets of such a pass-through
trust comprise Fannie Mae or Freddie Mac preferred stock, and
the trust in turn passes through dividends received on such
stock to its two outstanding classes of certificates
(partnership interests): an auction-rate class, where the
share of the underlying preferred stock dividend is
determined by periodic auctions, and a residual class, which
receives the remainder of any dividends received on the
underlying stock. The bill's delegation of authority to the
Secretary anticipates that regulations will promptly be
issued confirming in general that losses recognized by such a
trust on or after January 1, 2008, in respect of the
preferred stock of Fannie Mae or Freddie Mac that it acquired
before September 6, 2008, will be characterized as ordinary
loss in the hands of a certificate holder that is an
applicable financial institution and that would be eligible
for the relief contemplated by this provision if the
applicable financial institution had held the underlying
preferred stock directly for the same period that it held the
pass-through certificate. In light of the substantial amount
of such pass-through certificates in the marketplace, and the
importance of the prompt resolution of the character of any
resulting losses allocated to certificate holders that are
applicable financial institutions for purposes of their
regulatory and investor financial statement filings,
unnecessary disruptions to the marketplace could best be
avoided if the Secretary were to exercise the regulatory
authority granted under the provision to address this case as
soon as possible and, in any event, by October 31, 2008.
Effective Date
This provision applies to sales or exchanges occurring
after December 31, 2007, in taxable years ending after such
date.
B. Special Rules for Tax Treatment of Executive Compensation of
Employers Participating in the Troubled Assets Relief Program (sec. 302
of the bill and secs. 162(m) and 280G of the Code)
Present Law
In general
An employer generally may deduct reasonable compensation
for personal services as an ordinary and necessary business
expense. Sections 162(m) and 280G provide explicit
limitations on the deductibility of compensation expenses in
the case of corporate employers.
Section 162(m)
In general
The otherwise allowable deduction for compensation paid or
accrued with respect to a covered employee of a publicly held
corporation is limited to no more than $1 million per year.
The deduction limitation applies when the deduction would
otherwise be taken. Thus, for example, in the case of
compensation resulting from a transfer of property in
connection with the performance of services, such
compensation is taken into account in applying the deduction
limitation for the year for which the compensation is
deductible under section 83 (i.e., generally the year in
which the employee's right to the property is no longer
subject to a substantial risk of forfeiture).
Covered employees
Section 162(m) defines a covered employee as (1) the chief
executive officer of the corporation (or an individual acting
in such capacity) as of the close of the taxable year and (2)
the four most highly compensated officers for the taxable
year (other than the chief executive officer). Treasury
regulations under section 162(m) provide that whether an
employee is the chief executive officer or among the four
most highly compensated officers should be determined
pursuant to the executive compensation disclosure rules
promulgated under the Securities Exchange Act of 1934
(``Exchange Act'').
In 2006, the Securities and Exchange Commission amended
certain rules relating to executive compensation, including
which executive officers' compensation must be disclosed
under the Exchange Act. Under the new rules, such officers
consist of (1) the principal executive officer (or an
individual acting in such capacity), (2) the principal
financial officer (or an individual acting in such capacity),
and (3) the three most highly compensated executive officers,
other than the principal executive officer or financial
officer.
[[Page 23572]]
In response to the Securities and Exchange Commission's new
disclosure rules, the Internal Revenue Service issued updated
guidance on identifying which employees are covered by
section 162(m). The new guidance provides that ``covered
employee'' means any employee who is (1) the principal
executive officer (or an individual acting in such capacity)
defined in reference to the Exchange Act, or (2) among the
three most highly compensated officers for the taxable year
(other than the principal executive officer), again defined
by reference to the Exchange Act. Thus, under current
guidance, only four employees are covered under section
162(m) for any taxable year. Under Treasury regulations, the
requirement that the individual meet the criteria as of the
last day of the taxable year applies to both the principal
executive officer and the three highest compensated officers.
Compensation subject to the deduction limitation
In general.--Unless specifically excluded, the deduction
limitation applies to all remuneration for services,
including cash and the cash value of all remuneration
(including benefits) paid in a medium other than cash. If an
individual is a covered employee for a taxable year, the
deduction limitation applies to all compensation not
explicitly excluded from the deduction limitation, regardless
of whether the compensation is for services as a covered
employee and regardless of when the compensation was earned.
The $1 million cap is reduced by excess parachute payments
(as defined in sec. 280G, discussed below) that are not
deductible by the corporation.
Certain types of compensation are not subject to the
deduction limit and are not taken into account in determining
whether other compensation exceeds $1 million. The following
types of compensation are not taken into account: (1)
remuneration payable on a commission basis; (2) remuneration
payable solely on account of the attainment of one or more
performance goals if certain outside director and shareholder
approval requirements are met (``performance-based
compensation''); (3) payments to a tax-qualified retirement
plan (including salary reduction contributions); (4) amounts
that are excludable from the executive's gross income (such
as employer-provided health benefits and miscellaneous fringe
benefits (sec. 132)); and (5) any remuneration payable under
a written binding contract which was in effect on February
17, 1993. In addition, remuneration does not include
compensation for which a deduction is allowable after a
covered employee ceases to be a covered employee. Thus, the
deduction limitation often does not apply to deferred
compensation that is otherwise subject to the deduction
limitation (e.g., is not performance-based compensation)
because the payment of compensation is deferred until after
termination of employment.
Performance-based compensation.--Compensation qualifies for
the exception for performance-based compensation only if (1)
it is paid solely on account of the attainment of one or more
performance goals, (2) the performance goals are established
by a compensation committee consisting solely of two or more
outside directors, (3) the material terms under which the
compensation is to be paid, including the performance goals,
are disclosed to and approved by the shareholders in a
separate vote prior to payment, and (4) prior to payment, the
compensation committee certifies that the performance goals
and any other material terms were in fact satisfied.
Compensation (other than stock options or other stock
appreciation rights) is not treated as paid solely on account
of the attainment of one or more performance goals unless the
compensation is paid to the particular executive pursuant to
a pre-established objective performance formula or standard
that precludes discretion. Stock options or other stock
appreciation rights generally are treated as meeting the
exception for performance-based compensation, provided that
the requirements for outside director and shareholder
approval are met (without the need for certification that the
performance standards have been met), because the amount of
compensation attributable to the options or other rights
received by the executive would be based solely on an
increase in the corporation's stock price. Stock-based
compensation is not treated as performance-based if it is
dependent on factors other than corporate performance. For
example, if a stock option is granted to an executive with an
exercise price that is less than the current fair market
value of the stock at the time of grant, then the executive
would have the right to receive compensation on the exercise
of the option even if the stock price decreases or stays the
same. In contrast to options or other stock appreciation
rights, grants of restricted stock are not inherently
performance-based because the executive may receive
compensation even if the stock price decreases or stays the
same. Thus, a grant of restricted stock does not satisfy the
definition of performance-based compensation unless the grant
or vesting of the restricted stock is based upon the
attainment of a performance goal and otherwise satisfies the
standards for performance-based compensation.
Section 280G
In general
In some cases, a compensation agreement for a corporate
executive may provide for payments to be made if there is a
change in control of the executive's employer, even if the
executive does not lose his or her job as part of the change
in control. Such payments are sometimes referred to as
``golden parachute payments.'' The Code contains limits on
the amount of certain types of such payments, referred to as
``excess parachute payments.'' Excess parachute payments are
not deductible by a corporation. In addition, an excise tax
is imposed on the recipient of any excess parachute payment
equal to 20 percent of the amount of such payment.
Definition of parachute payment
A ``parachute payment'' is any payment in the nature of
compensation to (or for the benefit of) a disqualified
individual which is contingent on a change in the ownership
or effective control of a corporation or on a change in the
ownership of a substantial portion of the assets of a
corporation (``acquired corporation''), if the aggregate
present value of all such payments made or to be made to the
disqualified individual equals or exceeds three times the
individual's ``base amount.''
The individual's base amount is the average annual
compensation payable by the acquired corporation and
includible in the individual's gross income over the five-
taxable years of such individual preceding the individual's
taxable year in which the change in ownership or control
occurs.
The term parachute payment also includes any payment in the
nature of compensation to a disqualified individual if the
payment is made pursuant to an agreement which violates any
generally enforced securities laws or regulations.
Certain amounts are not considered parachute payments,
including payments under a qualified retirement plan, and
payments that are reasonable compensation for services
rendered on or after the date of the change in control. In
addition, the term parachute payment does not include any
payment to a disqualified individual with respect to a small
business corporation or a corporation no stock of which was
readily tradable, if certain shareholder approval
requirements are satisfied.
Disqualified individual
A disqualified individual is any individual who is an
employee, independent contractor, or other person specified
in Treasury regulations who performs personal services for
the corporation and who is an officer, shareholder, or highly
compensated individual of the corporation. Personal service
corporations and similar entities generally are treated as
individuals for this purpose. A highly compensated individual
is defined for this purpose as an employee (or a former
employee) who is among the highest-paid one percent of
individuals performing services for the corporation (or an
affiliated corporation) or the 250 highest paid individuals
who perform services for a corporation (or affiliated group).
Excess parachute payments
In general, excess parachute payments are any parachute
payments in excess of the base amount allocated to the
payment. The amount treated as an excess parachute payment is
reduced by the portion of the payment that the taxpayer
establishes by clear and convincing evidence is reasonable
compensation for personal services actually rendered before
the change in control.
Explanation of Provision
Section 162(m)
In general
Under the provision, the section 162(m) limit is reduced to
$500,000 in the case of otherwise deductible compensation of
a covered executive for any applicable taxable year of an
applicable employer.
An applicable employer means any employer from which one or
more troubled assets are acquired under the ``troubled assets
relief program'' (``TARP'') established by the bill if the
aggregate amount of the assets so acquired for all taxable
years (including assets acquired through a direct purchase by
the Treasury Department, within the meaning of section 113(c)
of Title I of the bill) exceeds $300,000,000. However, such
term does not include any employer from which troubled assets
are acquired by the Treasury Department solely through direct
purchases (within the meaning of section 113(c) of Title I of
the bill). For example, if a firm sells $250,000,000 in
assets through an auction system managed by the Treasury
Department, and $100,000,000 to the Treasury Department in
direct purchases, then the firm is an applicable employer.
Conversely, if all $350,000,000 in sales take the form of
direct purchases, then the firm would not be an applicable
employer.
Unlike section 162(m), an applicable employer under this
provision is not limited to publicly held corporations (or
even limited to corporations). For example, an applicable
employer could be a partnership if the partnership is an
employer from which a troubled asset is acquired. The
aggregation rules of Code section 414(b) and (c) apply in
determining whether an employer is an applicable employer.
However, these rules are applied
[[Page 23573]]
disregarding the rules for brother-sister controlled groups
and combined groups in sections 1563(a)(2) and (3). Thus,
this aggregation rule only applies to parent-subsidiary
controlled groups. A similar controlled group rule applies
for trades and businesses under common control.
The result of this aggregation rule is that all
corporations in the same controlled group are treated as a
single employer for purposes of identifying the covered
executives of that employer and all compensation from all
members of the controlled group are taken into account for
purposes of applying the $500,000 deduction limit. Further,
all sales of assets under the TARP from all members of the
controlled group are considered in determining whether such
sales exceed $300,000,000.
An applicable taxable year with respect to an applicable
employer means the first taxable year which includes any
portion of the period during which the authorities for the
TARP established under the bill are in effect (the
``authorities period'') if the aggregate amount of troubled
assets acquired from the employer under that authority during
the taxable year (when added to the aggregate amount so
acquired for all preceding taxable years) exceeds
$300,000,000, and includes any subsequent taxable year which
includes any portion of the authorities period.
A special rule applies in the case of compensation that
relates to services that a covered executive performs during
an applicable taxable year but that is not deductible until a
later year (``deferred deduction executive remuneration''),
such as nonqualified deferred compensation. Under the special
rule, the unused portion (if any) of the $500,000 limit for
the applicable tax year is carried forward until the year in
which the compensation is otherwise deductible, and the
remaining unused limit is then applied to the compensation.
For example, assume a covered executive is paid $400,000 in
cash salary by an applicable employer in 2008 (assuming 2008
is an applicable taxable year) and the covered executive
earns $100,000 in nonqualified deferred compensation (along
with the right to future earnings credits) payable in 2020.
Assume further that the $100,000 has grown to $300,000 in
2020. The full $400,000 in cash salary is deductible under
the $500,000 limit in 2008. In 2020, the applicable
employer's deduction with respect to the $300,000 will be
limited to $100,000 (the lesser of the $300,000 in deductible
compensation before considering the special limitation, and
$500,000 less $400,000, which represents the unused portion
of the $500,000 limit from 2008).
Deferred deduction executive remuneration that is properly
deductible in an applicable taxable year (before application
of the limitation under the provision) but is attributable to
services performed in a prior applicable taxable year is
subject to the special rule described above and is not
double-counted. For example, assume the same facts as above,
except that the nonqualified deferred compensation is
deferred until 2009 and that 2009 is an applicable taxable
year. The employer's deduction for the nonqualified deferred
compensation for 2009 would be limited to $100,000 (as in the
example above). The limit that would apply under the
provision for executive remuneration that is in a form other
than deferred deduction executive remuneration and that is
otherwise deductible for 2009 is $500,000. For example, if
the covered executive is paid $500,000 in cash compensation
for 2009, all $500,000 of that cash compensation would be
deductible in 2009 under the provision.
Covered executive
The term covered executive means any individual who is the
chief executive officer or the chief financial officer of an
applicable employer, or an individual acting in that
capacity, at any time during a portion of the taxable year
that includes the authorities period. It also includes any
employee who is one of the three highest compensated officers
of the applicable employer for the applicable taxable year
(other than the chief executive officer or the chief
financial officer and only taking into account employees
employed during any portion of the taxable year that includes
the authorities period).
The determination of the three highest compensated officers
is made on the basis of the shareholder disclosure rules for
compensation under the Exchange Act, except to the extent
that the shareholder disclosure rules are inconsistent with
the provision. Such shareholder disclosure rules are applied
without regard to whether those rules actually apply to the
employer under the Exchange Act. If an employee is a covered
executive with respect to an applicable employer for any
applicable taxable year, the employee will be treated as a
covered executive for all subsequent applicable taxable years
(and will be treated as a covered executive for purposes of
any subsequent taxable year for purposes of the special rule
for deferred deduction executive remuneration).
Executive remuneration
The provision generally incorporates the present law
definition of applicable employee remuneration. However, the
present law exceptions for remuneration payable on commission
and performance-based compensation do not apply for purposes
of the new $500,000 limit. In addition, the new $500,000
limit only applies to executive remuneration which is
attributable to services performed by a covered executive
during an applicable taxable year. For example, assume the
same facts as in the example above, except that the covered
executive also receives in 2008 a payment of $300,000 in
nonqualified deferred compensation that was attributable to
services performed in 2006. Such payment is not treated as
executive remuneration for purposes of the new $500,000
limit.
Other rules
The modification to section 162(m) provides the same
coordination rules with disallowed parachute payment and
stock compensation of insiders in expatriated corporations as
exist under present law section 162(m). Thus, the $500,000
deduction limit under this section is reduced (but not below
zero) by any parachute payments (including parachute payments
under the expanded definition under this provision) paid
during the authorities period and any payment of the excise
tax under section 4985 for stock compensation of insiders in
expatriated corporations.
The modification authorizes the Secretary of the Treasury
to prescribe such guidance, rules, or regulations as are
necessary to carry out the purposes of the $500,000 deduction
limit, including the application of the limit in the case of
any acquisition, merger, or reorganization of an applicable
employer.
Section 280G
The provision also modifies section 280G by expanding the
definition of parachute payment in the case of a covered
executive of an applicable employer. For this purpose, the
terms ``covered executive,'' ``applicable taxable year,'' and
``applicable employer'' have the same meaning as under the
modifications to section 162(m) (described above).
Under the modification, a parachute payment means any
payments in the nature of compensation to (or for the benefit
of) a covered executive made during an applicable taxable
year on account of an applicable severance from employment
during the authorities period if the aggregate present value
of such payments equals or exceeds an amount equal to three
times the covered executive's base amount. An applicable
severance from employment is any severance from employment of
a covered executive (1) by reason of an involuntary
termination of the executive by the employer or (2) in
connection with a bankruptcy, liquidation, or receivership of
the employer.
Whether a payment is on account of the employee's severance
from employment is generally determined in the same manner as
under present law. Thus, a payment is on account of the
employee's severance from employment if the payment would not
have been made at that time if the severance from employment
had not occurred. Such payments include amounts that are
payable upon severance from employment (or separation from
service), vest or are no longer subject to a substantial risk
of forfeiture on account of such a separation, or are
accelerated on account of severance from employment. As under
present law, the modified definition of parachute payment
does not include amounts paid to a covered executive from
certain tax qualified retirement plans.
A parachute payment during an applicable taxable year that
is paid on account of a covered executive's applicable
severance from employment is nondeductible on the part of the
employer (and the covered executive is subject to the section
4999 excise tax) to the extent of the amount of the payment
that is equal to the excess over the employee's base amount
that is allocable to such payment. For example, assume that a
covered executive's annualized includible compensation is $1
million and the covered executive's only parachute payment
under the provision is a lump sum payment of $5 million. The
covered executive's base amount is $1 million and the excess
parachute payment is $4 million.
The modifications to section 280G do not apply in the case
of a payment that is treated as a parachute payment under
present law. The modifications further authorize the
Secretary of Treasury to issue regulations to carry out the
purposes of the provision, including the application of the
provision in the case of a covered executive who receives
payments some of which are treated as parachute payments
under present law section 280G and others of which are
treated as parachute payments on account of this provision,
and the application of the provision in the event of any
acquisition, merger, or reorganization of an applicable
employer. The regulations shall also prevent the avoidance of
the application of the provision through the
mischaracterization of a severance from employment as other
than an applicable severance from employment. It is intended
that the regulations prevent the avoidance of the provision
through the acceleration, delay, or other modification of
payment dates with respect to existing compensation
arrangements.
Effective Date
The provision is effective for taxable years ending on or
after date of enactment, except that the modifications to
section 280G are effective for payments with respect to
severances occurring during the authorities period.
[[Page 23574]]
C. Exclude Discharges of Acquisition Indebtedness on Principal
Residences From Gross Income (sec. 303 of the bill and sec. 108 of the
Code)
Present Law
In general
Gross income includes income that is realized by a debtor
from the discharge of indebtedness, subject to certain
exceptions for debtors in Title 11 bankruptcy cases,
insolvent debtors, certain student loans, certain farm
indebtedness, and certain real property business indebtedness
(secs. 61(a)(12) and 108). In cases involving discharges of
indebtedness that are excluded from gross income under the
exceptions to the general rule, taxpayers generally reduce
certain tax attributes, including basis in property, by the
amount of the discharge of indebtedness.
The amount of discharge of indebtedness excluded from
income by an insolvent debtor not in a Title 11 bankruptcy
case cannot exceed the amount by which the debtor is
insolvent. In the case of a discharge in bankruptcy or where
the debtor is insolvent, any reduction in basis may not
exceed the excess of the aggregate bases of properties held
by the taxpayer immediately after the discharge over the
aggregate of the liabilities of the taxpayer immediately
after the discharge (sec. 1017).
For all taxpayers, the amount of discharge of indebtedness
generally is equal to the difference between the adjusted
issue price of the debt being cancelled and the amount used
to satisfy the debt. These rules generally apply to the
exchange of an old obligation for a new obligation, including
a modification of indebtedness that is treated as an exchange
(a debt-for-debt exchange).
Qualified principal residence indebtedness
An exclusion from gross income is provided for any
discharge of indebtedness income by reason of a discharge (in
whole or in part) of qualified principal residence
indebtedness. Qualified principal residence indebtedness
means acquisition indebtedness (within the meaning of section
163(h)(3)(B), except that the dollar limitation is
$2,000,000) with respect to the taxpayer's principal
residence. Acquisition indebtedness with respect to a
principal residence generally means indebtedness which is
incurred in the acquisition, construction, or substantial
improvement of the principal residence of the individual and
is secured by the residence. It also includes refinancing of
such indebtedness to the extent the amount of the
indebtedness resulting from such refinancing does not exceed
the amount of the refinanced indebtedness. For these
purposes, the term ``principal residence'' has the same
meaning as under section 121 of the Code.
If, immediately before the discharge, only a portion of a
discharged indebtedness is qualified principal residence
indebtedness, the exclusion applies only to so much of the
amount discharged as exceeds the portion of the debt which is
not qualified principal residence indebtedness. Thus, assume
that a principal residence is secured by an indebtedness of
$1 million, of which $800,000 is qualified principal
residence indebtedness. If the residence is sold for $700,000
and $300,000 debt is discharged, then only $100,000 of the
amount discharged may be excluded from gross income under the
qualified principal residence indebtedness exclusion.
The basis of the individual's principal residence is
reduced by the amount excluded from income under the
provision.
The qualified principal residence indebtedness exclusion
does not apply to a taxpayer in a Title 11 case; instead the
general exclusion rules apply. In the case of an insolvent
taxpayer not in a Title 11 case, the qualified principal
residence indebtedness exclusion applies unless the taxpayer
elects to have the general exclusion rules apply instead.
The exclusion does not apply to the discharge of a loan if
the discharge is on account of services performed for the
lender or any other factor not directly related to a decline
in the value of the residence or to the financial condition
of the taxpayer.
The exclusion for qualified principal residence
indebtedness is effective for discharges of indebtedness
before January 1, 2010.
Explanation of Provision
The provision extends for three additional years the
exclusion from gross income for discharges of qualified
principal residence indebtedness.
Effective Date
The provision is effective for discharges of indebtedness
on or after January 1, 2010, and before January 1, 2013.
Mr. BYRD. Mr. President, this is an enormous package--$700 billion.
That ain't chicken feed! That is 17 times what we spend annually on
health care for our Nation's veterans. That is 14 times what we spend
annually on highways and mass transportation. That is more than the
annual defense budget, which supplies our troops and fuels our planes
and naval vessels around the globe. That is more than the total amount
the Federal Government will spend on homeland security over the next 17
years. And that number actually hides the real potential cost because
the Treasury Secretary would be authorized to buy and sell an unlimited
amount of these troubled assets in the next 2 years.
It is an enormous amount of money. And it involves granting an
enormous amount of authority to the Secretary of the Treasury. I
believe many Americans, and that includes this Senator, would not
pretend to understand all of the nuances of the financial mess that we
are told is creeping into our Main Street communities and threatens to
jeopardize the security of millions of Americans. But we all understand
that, when working families were suffering because of the economic
policies of these past 8 years, nobody in the Treasury Department or
the Federal Reserve told us about the dangerous course we were on. When
the Senate tried to pass an economic stimulus bill just last week,
which included unemployment benefits and financial assistance for these
same working families struggling with rising energy and food prices,
those efforts were met with filibusters and fierce opposition from the
White House that now wants a bailout of Wall Street. Apparently Wall
Street institutions are too big and too important to be allowed to
fail, but the same isn't true when it comes to working families.
West Virginia has always had its share of economic troubles. But, it
has been further battered by the Bush administration's feckless fiscal
policies. The annual budget cuts imposed by the Bush administration and
its allies in the Congress have punished the people of my State and
many other States. Everything from health care, to law enforcement, to
programs for children have been put on the chopping block.
I grew up in the Great Depression. That economic collapse followed a
decade of business prosperity. Three Republican administrations had
pursued policies that brought the country to the brink of economic
ruin. Those administrations pushed to get the government off the backs
of business, a ``return to normalcy,'' President Harding called it.
They had pushed through enormous tax cuts, including the largest tax
cut in American history to that point all the while proclaiming the
virtues of big business: ``The business of America, is business,''
thundered President Coolidge.
For the past 8 years, we have again heard the same slogans reflecting
the same philosophy and seen another Republican administration follow
the same reckless path. ``Unleash capitalism'', has been the cry for
the past 8 years. ``Get the Government off our backs.'' The government
is the problem, not the solution. We have heard it all before.
Well, the financial oversight agencies have had an 8 year holiday.
For 8 years, Wall Street has run wild, as they loaned money they did
not have, to people who could not afford these loans, to buy houses and
other real estate that were enormously overpriced. Now, faced with
financial troubles, the Wall Street barons look to the very Government
that they had been resisting to save them to the tune of $700 billion.
As the fear spreads and confidence erodes, now the turmoil on Wall
Street threatens to wash over Main Street as banks refuse credit, old
loans default, and investments that fund the pensions of the average
American plummet in value.
Republicans espouse the theory of trickle down economics--that the
benefits of economic growth will trickle down to the working family.
What hogwash. This crisis proves that the only thing that trickles down
to the working family is the losses that come from Wall Street run
wild. I fear the enormity of the potential crisis that looms over our
entire economy. The scope and the cost of the bill speak to the
severity of the challenge that our financial leaders believe our
country is confronting. This is legislation I do not want to support,
yet I fear the consequences of its failure in this body. I fear
opposing this legislation because I fear even more what might happen to
our States, our workers, their pensions, and their jobs if this turmoil
on Wall Street spreads further into our economy.
I am somewhat comforted by the improvements Congress has made in an
[[Page 23575]]
otherwise total giveaway of funds and authority to the executive
branch. The EESA bill is 113 pages compared to the 3-page proposal
requested by the administration. Much of the new language includes
checks on the new authority:
No. 1 sunsets the legislation on December 31, 2009--15 months from
now--but the Treasury may extend the program until 2 years after the
date of enactment;
No. 2 releases $700 billion to the Treasury in parts--the first $250
billion is available immediately, the next $100 billion is available
after Presidential certification, and the next $350 billion is
available unless a joint resolution of disapproval, subject to
expedited procedures, is passed within 15 days of the Treasury request;
No. 3 includes the Appropriations Committees in the list of
congressional committees that will receive regular reports;
No. 4 creates a new Congressional Oversight Panel in the legislative
branch, which would be required to report to the Congress 30 days after
the Treasury Secretary first exercises his authorities and every 30
days thereafter. The members of the panel would be appointed by the
House Speaker, the Senate majority leader, the House and Senate
minority leaders;
No. 5 requires the Comptroller General to report to the Congress
every 60 days;
No. 6 creates a special inspector general, which would be subject to
Presidential appointment and Senate confirmation, and would be required
to report to the Congress within 60 days of confirmation and quarterly
thereafter;
No. 7 creates a Financial Stability Oversight Board in the executive
branch. The board would consist of the chairman of the Federal Reserve,
Treasury Secretary, Chairman of the Securities and Exchange Commission,
Secretary of Housing and Urban Development, the Director of the Federal
Housing Finance Agency, the overseer for Fannie Mae and Freddie Mac,
and would be required to report to the Congress quarterly. In addition,
60 days after the Treasury Secretary first exercises his authorities
and every month thereafter, and 7 days after the purchasing authority
reaches each $50 billion tranche, the Secretary would be required to
report to the Congress;
No. 8 within 2 days of the Secretary exercising his authority under
the act or within 45 days of enactment, the Secretary would be required
to publish program guidelines explaining how troubled assets would be
selected, priced, and purchased.
I believe that our duty is clear. We must pass this legislation or
further destabilize our country's economic situation. But after we pass
it, if we do, we must then go after all of those who so cavalierly put
the rest of us at such incredible risk.
Mr. DORGAN. Mr. President, providing a $700 billion financial rescue
plan without requiring reform and regulation of the financial markets
is a serious mistake. That is exactly what this legislation does.
I believe that we are in an economic crisis that does require a
response by Congress.
But it cannot be a response that commits the American taxpayers to a
large rescue fund for many of America's biggest financial institutions
while still leaving in place unregulated financial markets that allowed
this financial crisis to happen.
Despite my best efforts there is nothing in this legislation that
will require the regulation of the very financial markets that have, in
recent years, helped create a casinolike atmosphere with large
financial institutions exhibiting unprecedented greed in search of
short-term profits and big bonuses that knew no bounds.
I will not vote for a plan that I believe fails to address the
central cause of this crisis: unregulated financial markets that hide
the unbelievable speculation and reckless investments by some major
financial institutions whose losses are now being loaded on the backs
of the American taxpayers. Those financial markets must be regulated
now!
In 1999 when Congress debated a large deregulation bill titled the
Financial Modernization Act, I was one of only eight Senators who voted
no and I warned then in Senate debate that ``this bill will also raise
the likelihood of future massive taxpayer bailouts.'' I wish I had been
wrong.
Nine years later we are considering a ``massive taxpayer bailout''
plan that provides no regulation of the hedge funds and derivative
trading that has caused much of the financial wreckage in our economy.
The plan also fails to restore the protections that were removed in
the Financial Modernization Act to separate FDIC insured bank
operations from the risky speculative investments in real estate and
securities.
Under this plan the creation of exotic securities that are traded in
financial darkness by unregulated hedge funds and other institutions
can continue. It is estimated that there is a notional value of more
than $60 trillion of credit default swaps in our economy. No one knows
where they are, whose balance sheets they may threaten, or how much
additional risk they pose to financial firms. Yet, I was told this plan
could not require regulation and transparency of these financial
markets because there was opposition in Congress and the White House.
That is not a satisfactory answer for me. And I don't believe it is
satisfactory to the taxpayers.
The legislation contains some provisions that I strongly support. I
believe we should increase the FDIC insurance to $250,000 per account.
I also strongly support the tax extenders and the tax incentives for
renewable energy.
But in the end, if this plan is about restoring confidence, the
failure to include reform and regulatory measures along with the money
is a fatal flaw that I believe will end up hurting our country.
The following are the six steps I called for including in the
financial rescue plan. While there was some improvement in the plan
along the way, it fails to do what I think is necessary to protect both
the economy and taxpayers.
1. Restoring the stability and safety of the banking system by re-
creating protections of the Glass-Steagall Act, which prohibited the
merging of banking businesses with riskier investments. That post-
Depression Era protection served us well for seven decades before its
repeal.
2. Addressing the wildly excessive compensation on Wall Street, which
has incentivized reckless behavior. In recent years, Wall Street has
doled out more than $100 billion in bonuses to the very people who have
steered us into this mess, including more than $33 billion in each of
2007 and 2006.
3. Developing a system of regulation that would require
accountability for the speculative investment activities of hedge funds
and investment banks that create and sell complex securities.
4. Providing for a period of forbearance on mortgages where
homeowners could continue to pay mortgages at a set rate.
5. Creating a Taxpayer Protection Task Force that would investigate
and claw back ill-gotten gains. This would be targeted at individuals
and firms that profited from creating and selling worthless securities
and toxic products. Despite the fact that this practice caused the
current economic crisis, many of these individuals and firms now seek
to benefit from a Government bailout.
6. Making sure that U.S. taxpayers get to share in the increased
values, not just the burden of risk, of the firms they are bailing out.
Mr. LEVIN. Mr. President, our Nation's economy is in crisis, the
likes of which we have not seen since the 1930s. For years, we have
traveled a disturbing path: foreclosures and unemployment are up while
median income and purchasing power are down. CEO pay has skyrocketed
while regular Americans are suffering. Economic growth has slowed
because tight credit has forced businesses large and small to put
investments for the future on hold while they focus on making sure they
have capital to buy inventory or even make payroll.
But in just the last few weeks, we have seen something even more
startling appear on the horizon: our current path ends at a cliff, and
if we do
[[Page 23576]]
not take quick action to change the course of our economy, we could go
over the edge. The reasons we are at this cliff are many. The path we
have traveled has been marked by an appalling lack of oversight by the
regulators of the marketplace. Wall Street has run amok with greed
while the Bush administration and others urged them on in the name of
deregulation. As in the runup to the Great Depression, our free markets
are running wild. We have reduced capital requirements, removed the
authority of the Securities and Exchange Commission to regulate swaps,
and speculators took over the majority of some commodity trading, like
oil. Still, echoing Roosevelt's opponents in the 1930s, some opponents
of government stabilization actions argue that the kind of rescue plan
before us today--and regulation of the practices that brought us here--
threatens the freedom of our markets and our people.
The opposite is true. In a free country, we need to have stoplights
and cops to maintain order, keep everyone safe, and give everyone fair
treatment and fair opportunity. The same is true of a free economy:
when stoplights and cops are replaced by a drive to achieve total
deregulation, the country is left with an absolute mess--and that is
what we face today. Cops have been taken off the beat in our financial
markets; stoplights to put a hold on free markets running wild have
been dismantled; and now, regular Americans are suffering, and face
even more dire consequences.
There is plenty of blame to go around, and the excesses that continue
to surface as this unfolds will no doubt be shocking. In the immediate
term, however, the most pressing issue is how we turn our unstable
economic situation around to avoid an even more dire result.
If we fail to take action, pensions and savings could quickly be
decimated by a wrecked stock market, and Americans could suffer with
significant job losses and less ability to buy everything from
groceries to a new car or house. Small businesses and even large ones
are likely to see their access to capital further reduced, home
mortgages could become even more difficult to acquire or refinance,
foreclosures could further skyrocket, and auto and student loans could
be much more difficult to get. Construction jobs would likely
disappear, automakers would cut back even further on production and lay
off workers, and retail and service jobs would be cut. Retirees who are
counting on a 401(k) or other type of pension would see their nest eggs
shattered. If the stock market crashes, investments--even those made
years or decades ago in supposedly ``safe'' assets--would be drowned.
It is clear to me that we cannot allow our Nation's economy to fall
off this cliff. We need to take action before it is too late. Doing
nothing is not an option. But it is with reluctance that I will vote
for this rescue plan because it is not entirely clear that it will
unlock enough credit and stop enough foreclosures to turn things
around. It is also evident that this plan only includes the first steps
towards getting regulatory cops back on the beat to make sure our
markets are not allowed to continue running wild. But there also is no
better alternative at this time, so I will vote for this plan with the
hope that allowing the Government to buy up a significant portion of
the troubled assets that are weighing down banks and other financial
institutions will unlock enough capital to restore flexibility and
credit to businesses and consumers, before Americans suffer even
greater consequences of our current course. In addition, if done right,
the Government can use this plan to purchase, modify, refinance, and
resell mortgages that are based on accurate home values, have fair,
longer-term repayment terms that homeowners can meet, and will return
mortgage repayment rates to their historic high levels of dependability
and profitability. If that is how this program is carried out, it can
avert a disaster. Unlocking credit and restructuring mortgages will
also help soothe investor concerns and, therefore, protect pensions,
savings and investments.
I could not have supported the original plan sent to Congress by the
Bush administration. It did nothing to protect taxpayers or provide any
oversight. It also did nothing to address the core of the problem,
which is the foreclosure crisis. I think, however, that we in Congress
have decided that if taxpayer dollars are used to clean up the
financial mess, the administration is going to have to accept taxpayer
safeguards and taxpayer oversight.
Congress has done significant work to add in some of the needed
taxpayer protections, and to make sure that this plan is grounded in
helping regular Americans. Among other safeguards, this rescue bill
provides the government, and thus the taxpayers, with options to
acquire an equity stake in companies that take advantage of the
program. By doing so, the government is providing some financial
protection to taxpayers.
The bill also includes limits on executive compensation for entities
that take advantage of government assistance, though, like other
provisions, the effectiveness of these provisions will depend upon how
well they are implemented. The bill also imposes needed internal
controls and oversight provisions to make sure this unprecedented power
and amount of money is used responsibly. These controls include
immediate public reporting of the assets purchased, including the price
paid; GAO audits of those financial reports; and Inspector General
oversight to prevent fraud, favoritism, waste of taxpayer dollars, and
abuse of power. In addition, a special House-Senate oversight panel
will be established to track this program and ensure that taxpayer
interests are protected. These protections are important. Still more
important is that Congress revamp oversight and regulation of our
financial markets to prevent future financial disasters like this one.
There are other provisions in the bill that are particularly
important that I want to mention.
I am pleased that this bill, in sections 109 and 110, requires the
Treasury Department to maximize assistance for homeowners and encourage
mortgage service providers to minimize foreclosures so as to keep
families in their homes. Rampant foreclosures are at the core of this
economic crisis, and a recovery can only come when the housing market
turns around. This effort to limit foreclosures will be bolstered when
the Federal government holds, owns or controls mortgages or mortgage
backed securities. As the owner of loans that are at risk to be
foreclosed upon, the government can consent to modifications, and can
rework mortgages so that the homeowner can continue to make payments.
Homeowners, communities and taxpayers generally will be better off than
if these mortgages go into foreclosure.
It should be noted that foreclosure mitigation measures will become
much more difficult to enforce when the government buys mortgages that
have been securitized and divided up into smaller parts. In these
cases, section 109 requires Treasury to coordinate with the Federal
Deposit Insurance Corporation, the Federal Reserve, Fannie Mae, Freddie
Mac, the Department of Housing and Urban Development and other Federal
entities that hold troubled assets to attempt to identify opportunities
for the acquisition of classes of troubled assets. This will enable
Treasury to improve the loan modification and restructuring process.
All of the homeowner assistance and foreclosure mitigation programs
included in this bill set worthy goals, but they could be stronger.
Rather than encouraging servicers to modify unaffordable loans, the
United States should undertake a systematic effort to minimize
foreclosures, and the Treasury's efforts should be built around that
principle. I would also like to have seen a similar requirement in any
mortgage-related asset that the United States resold to the private
sector. Unfortunately, such a carry-forward provision is not included
in the final bill.
I also support the bill provisions in section 108 that require
Treasury to issue regulations or guidelines to
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``manage or prohibit'' conflicts of interest. One conflict of interest
that deserves special attention involves companies that service
residential mortgages. These companies make a stream of revenue from
servicing the loans. They may not specialize in loan modifications or
refinancing. If a mortgage loan is refinanced through FHA or otherwise,
the loan servicer may lose the business. For that reason, some loan
servicers may have a conflict of interest when it comes to implementing
the bill's policies promoting loan modifications and the HOPE for
Homeowners Program. Therefore, in addition to companies that service
loans, the Treasury Department should consider hiring companies who
have the experience and technology to modify and refinance loans with
and without FHA insurance. These companies need to be committed to
working with borrowers to develop a loan that they can pay, and the
companies need not be worried about servicing the modified or
restructured loan. I am assured that the Treasury Department has the
authority to accomplish this.
Another important bill provision limits purchases of troubled assets
to ``financial institutions'' which are ``established and regulated
under the laws of the United States.'' We cannot afford to bail out
offshore hedge funds, foreign banks, and sovereign wealth funds that
purchased high risk mortgage-backed securities and other high risk
investments to obtain high returns. I am relieved that we are focusing
our efforts on U.S. institutions subject to U.S. regulation.
I am also pleased that many state and regional banks, auto finance
companies and other off-Wall Street entities will be eligible for
participation in the troubled asset relief program. These entities are
hurting, and their financial stability has a direct impact on American
consumers; they should have access to this new market for otherwise
illiquid assets. Furthermore, under this bill, the Treasury Secretary
has the authority to purchase troubled assets that are not mortgage-
related, so long as, after consulting with the Chairman of the Federal
Reserve, he or she determines that doing so would promote financial
market stability.
While this final bill is miles ahead of the Bush administration
proposal sent to Congress, I am disappointed that it does not contain a
number of additional taxpayer protections I advocated. Those missing
protections included limits on the types of assets that could be
purchased, requirements for contract competition, policies to minimize
foreclosures, and regulation of credit default swaps.
One of the taxpayer safeguards I advocated, for example, was to limit
the bail out to purchasing troubled mortgages on ``real estate located
in the United States.'' That limitation was not, however, included in
the final bill. Its absence means that, as currently written, Treasury
is able to purchase troubled mortgages on real estate located in
Germany, Japan, China, anywhere in the world where U.S. financial
institutions bought mortgages. That doesn't make sense, and I don't
know why this basic limitation was left out of the bill. We can't
afford to bail out mortgages or mortgage-backed securities on real
estate in other countries, and I hope we won't.
Another problem is that the bill does not require that competition be
used to select the contractors who will manage the hundreds of billions
of dollars in troubled assets that will be purchased under this act. A
prior draft version of the bill stated that the Secretary ``shall
solicit proposals from a broad range of qualified vendors interested in
performing the work.'' That language disappeared from the final bill.
The American taxpayer is left hoping that the Bush administration or
the next administration will not continue the Bush administration's
prior record of awarding huge, no-bid contracts to a favored few.
Finally, I am disappointed that the bailout bill does not restore the
authority of the United States to regulate one of the prime culprits
responsible for this financial disaster, credit default swaps.
Credit default swaps are a type of financial derivative typically
used to insure payment of a debt obligation. Some companies, such as
AIG, issued them to the debt holder in place of insurance policies to
assure payment, while others used them like short sales, betting on
whether an unrelated company will fail to pay its debts. These bets,
called credit default swaps, are primarily responsible for the Federal
bailout of AIG, they are the focus of an ongoing SEC investigation into
market manipulation, and they continue to threaten U.S. financial
market stability because so many financial firms have credit default
swaps on their books.
Eight years ago, the Commodity Futures Modernization Act of 2000
prohibited the Securities and Exchange Commission from regulating all
types of swap agreements, including credit default swaps. As a result,
a completely unregulated $60 trillion credit default swap market has
developed with no capital requirements like insurance companies have,
no disclosures, no safeguards, and no oversight by any federal agency.
The statutory bar against regulating swaps is a prime example of the
deregulatory policies that landed American taxpayers in this $700
billion mess. It is a prime reason why financial institutions are
afraid to lend to each other--no one knows who has how many credit
default swaps outstanding, with which counterparties, involving how
much money. Yet this bill fails to address this problem.
At a Senate hearing on September 23, SEC Chairman Christopher Cox
testified that the credit default swap market ``is completely lacking
in transparency,'' ``is regulated by no one,'' and ``is ripe for fraud
and manipulation.'' He stated that the SEC's lack of regulatory
authority over swaps is a ``regulatory hole that must be immediately
addressed,'' warning that otherwise ``we will have another crisis on
our hands.'' Chairman Cox stated: ``I urge you to provide in statute
the authority to regulate [credit default swap] products to enhance
investor protection and ensure the operation of fair and orderly
markets.''
Three days later, on Friday, September 26, SEC Chairman Cox repeated
his warning and the need for SEC regulation: ``[I]t is critical that
Congress ensure there are no similar major gaps in our regulatory
framework. Unfortunately, as I reported to Congress this week, a
massive hole remains: the approximately $60 trillion credit default
swap market, which is regulated by no agency of government. Neither the
SEC nor any regulator has authority even to require minimum disclosure.
I urge Congress to take swift action to address this.''
Congress should have heeded that call and addressed the problem in
this bill. This bill should have repealed the existing statutory
prohibition and given the SEC general authority to regulate swap
agreements. Such a provision would have closed the swaps regulatory
loophole, while giving regulators and Congress additional time to
determine what specific regulation might be appropriate. But neither
this nor any other provision to regulate credit default swaps, or swaps
in general, was included. It is a missed opportunity that we can only
hope does not come back to haunt us. I hope the next Congress will
address this issue as part of an effort to strengthen regulation.
A final provision in the bill that was added at the last minute may
also come back to haunt the American public. Section 132 authorizes the
SEC to suspend the generally accepted accounting rule that requires
publicly traded corporations to report the fair value of their assets
in their financial statements.
If it were to suspend this accounting rule, the SEC would strike a
blow against honest accounting. Such suspension could essentially allow
corporations to inflate their asset values by reporting something other
than their fair market value--presumably allowing them to use instead
historical data, mathematical models, best estimates--who knows? In a
blink of an eye, corporations would have stronger balance sheets than
they do now, essentially cooking their books with the approval of the
SEC. It is an approach
[[Page 23578]]
that echoes the excesses of the Enron debacle.
The bill seems to prompt the SEC to allow this fantasy accounting at
the very time that financial institutions are leery of lending money to
each other, under the mistaken impression that artificially inflated
balance sheets will encourage lending. But allowing inaccurate
financial reporting, with inflated asset values, will not increase
confidence in the markets and it will not unlock credit.
As far as I know the SEC has never reached into the generally
accepted accounting principles to suspend a particular rule, and I hope
it doesn't start now. It would be a terrible precedent. And to the
extent that including this provision in this economic stabilization
bill was an effort to convey Congressional approval of that approach, I
would like to make it clear that I oppose suspension of Financial
Accounting Standards Board Rule 157. Honest accounting, using fair
market values, is essential to resolving the financial disaster that
now threatens our markets.
The financial mess we are in is the result of 8 years of inadequate
regulation of U.S. financial markets by the Bush administration. It is
long past time to strengthen market oversight. The regulatory gaps are
everywhere. Unfortunately, due to the urgency of adopting this
legislation, many much-needed reforms were simply not included in the
rescue plan.
In 2004, the SEC voluntarily weakened the net capital rule that
establishes capital reserves for securities firms. We need to restore
the net capital rule that was weakened in 2004, and resulted in
securities firms over-borrowing. Another glaring problem is the absence
of regulation of the more than 8,000 hedge funds that use American
markets. They don't even have to register with the SEC. Still another
problem is the weak regulation of credit rating agencies, including the
failure to resolve the conflicts of interest inherent in these
agencies' rating the securities of the firms that hire them. Weak
accounting rules that allow companies to hide their liabilities and
over-value their assets continue to undermine investor confidence. We
must also take action, as I have already mentioned, to regulate credit
default swaps and other derivatives that financial institutions have
loaded up on with little or no disclosure, regulation, or oversight.
The collapse of credit card securities is another crisis waiting to
happen due to abusive practices, excessive interest rates, growing
debt, and the lack of credit card reform. There was talk early on of
this bill setting an expedited schedule for addressing these and other
financial regulatory issues, but nothing was included in the bill.
I am pleased that the Senate has chosen to include in this
legislation its tax extenders bill, which the Senate passed separately
last week. With regard to tax incentives for advanced and alternative
energy technologies, the extension of many critical existing tax
incentives--including those for wind, solar, biomass, and alternative
fuels production and infrastructure--will facilitate the development
and commercialization of all of these technologies. I am particularly
pleased about the inclusion of a new tax credit for plug-in hybrid and
all-electric vehicles, which is essential not only to the development
of these technologies but also to consumer acceptance and widespread
use of these vehicles. In addition to the energy tax provisions, tax
extenders, and the adjustment to the alternative minimum tax, the
legislation before us now also includes the important provisions of the
Paul Wellstone and Pete Domenici Mental Health Parity and Addiction
Equity Act. Mental health parity is about basic fairness and equity.
Individuals suffering from mental health illnesses deserve access to
adequate and appropriate health care. I have spoken previously about
the significance of addressing this issue, and I am glad that Congress
is righting this wrong. I hope the House will accept this package.
In conclusion, I will vote for this rescue package with many qualms
but with the hope that it will prevent even greater harm to our economy
and hard working American families. It is clear that a financial
regulatory overhaul should be one of the first priorities of the next
President and the new Congress.
Mr. WARNER. Mr. President, I rise today to share my views on the
economic stabilization plan, as now amended by the Senate, and the
precarious state of our economy.
The instability in the housing market, the soaring energy prices,
and, more recently, the institutional failures within our credit and
financial markets have all been serious blows to our economy.
We must decide between the risks of doing nothing, thereby subjecting
the free market to the extraordinary level of unknowns of this critical
situation, or the value of seeking legislation in the hopes to reduce
the severity of serious consequences to almost every single aspect of
our economy.
The bill before us contains several improvements to the House bill,
improvements that have strengthened the measure. And, in my view,
without some form of Congressional action now, the credit markets could
freeze up. Without money flowing through our economy, car loans,
student loans, mortgage lines of credit, could become inadequate. Job
losses could follow and with it an increase in the number of Americans
without health insurance. I could go on and on.
My careful deliberations on this legislation and my understanding of
the economic problems facing our Nation lead me to believe that the
consequences of not taking this action poses an ever greater threat to
our economy and to all Americans.
For this reason, Mr. President, I intend to vote aye in support of
the bill, as amended.
Mr. FEINGOLD. Mr. President, I will oppose the Wall Street bailout
plan. Though well intentioned, and certainly much improved over the
original Treasury proposal, it is deeply flawed and in effect asks the
taxpayer to bear the burden of serious lapses of judgment by private
financial institutions, their regulators, and the enablers in
Washington who paved the way for this catastrophe by enacting measures
removing the safeguards that had protected consumers and the economy
since the Great Depression.
I regret Senate leadership has opted to add a number of unrelated
measures to this package. Whether this was done as a sweetener to make
the bailout pill go down a bit more easily or as a way to dispose of
remaining legislation in one giant package, the end result is a package
that is less straightforward and much more likely to spur doubts among
voters about the bailout portion of the package. The bailout package
was already a big enough question mark in the public's mind before this
dubious maneuver was concocted.
I strongly support some of the unrelated measures being added to the
bailout package. The mental health parity provisions are long overdue.
And I was pleased to support the tax extenders, disaster tax relief,
and mental health parity package when it was considered by the Senate
just a few days ago. But that legislation could have proceeded on its
own, without being attached to the emergency bailout bill.
There is one new provision being added to the bailout proposal that
is not only relevant but makes good sense, and that is the language
raising the cap on the size of an account that can be insured by the
FDIC. I have supported raising FDIC insurance limits for many years. It
should go a long way toward helping our community banks continue to
attract and retain the deposits so critical to their ability to provide
credit to consumers and Main Street businesses.
That brings me to the rest of the bailout measure. Though it is
lacking in several areas, I will focus my attention on three critical
defects in the legislation. First, it places the financial burden
squarely on the average taxpayer. In fact, because it is funded through
increased debt, the burden is actually placed on future taxpayers.
Regrettably, no offset was seriously considered, and as a result, our
debt is at risk of rising by another $700 billion. That is $700 billion
more that must be paid off by our children and grandchildren in the
form of increased taxes or fewer government services.
[[Page 23579]]
A second defect of the bailout bill is its failure to adequately
address the housing crisis which underlies much of the financial market
collapse. It does not include meaningful provisions to help individual
homeowners stay in their homes. As foreclosures continue to increase
throughout the country, including in Wisconsin, we need to ensure that
any legislation actually helps actual homeowners, not just Wall Street
banks and investment firms. This is not just a matter of fairness,
though it is surely that. It is also common sense. It is the housing
crisis that underlies the collapse of the credit markets. Without
addressing those root causes, any bailout is less likely to succeed.
This does not mean that we should reward homeowners who took out
bigger mortgages than they could afford to repay or who sought to flip
homes for investments. But for the homeowners who were misled or who
fell prey to predatory lending, Congress should do something to ensure
that those homeowners have the ability to work with their servicers to
modify their home loans. Unfortunately, this bailout bill is too skimpy
on protections for the individual homeowner.
I am also disappointed that this bill does not include language that
would allow bankruptcy judges to alter the mortgage terms of a
homeowner's primary residence when that homeowner has declared
bankruptcy. These sorts of loan modifications already can take place
for vacation homes and other types of personal debt. It is troubling
that the Bankruptcy Code would allow these modifications to take place
on different types of debt but not a family's primary residence.
Congress should address this issue and pass legislation to reform the
Bankruptcy Code to permit loan modifications to owner-occupied primary
residences.
It is true this bailout bill contains provisions directing the
Secretary of the Treasury to implement a plan to ``encourage''
servicers to take advantage of various programs to minimize
foreclosures. But unfortunately, the legislation seems to lack real
teeth to ensure that these servicers actually modify the terms of
nonfederally owned mortgages in order to prevent foreclosures. As we
have seen with the Bush Administration's Hope Now Alliance, voluntary
encouragement of loan modifications is not enough. While there are a
number of factors contributing to the high rates of home foreclosures
around this country, I am worried that unless Congress passes stronger
legislation to do more than encourage servicers to modify the terms of
these mortgages, we will continue to see high foreclosure rates plague
our communities.
Finally, and perhaps most importantly, this legislation fails to
include steps to reform the financial markets to ensure that we will
not need another bailout in the future.
If the taxpayers are being asked to bail out Wall Street, the least
we can do, the very least, is to ensure it will not happen again.
Nothing in this legislation does that. Indeed, the administration has
pushed hard to keep the bill free of the kinds of regulatory reforms we
need to prevent this kind of financial crisis from occurring again. We
are told that such reforms should be the focus of future legislation.
This is an old tactic. In my days in the Wisconsin State senate, we
used to call that the ``trailer bill'' promise. Of course, after
promising all would be made well in some future ``trailer bill,'' that
mythical legislation never materialized, or if it did, it failed to
accomplish what it was promised to do.
If anyone fell for the ``trailer bill'' maneuver once, I can tell you
that they didn't fall for it a second time, and no one should fall for
it now.
The bottom line is this, Mr. President. Any regulatory reform
legislation considered separately will almost certainly be inadequate,
and it might even do further damage, because of the influence of the
financial industry. The last two decades have seen a string of almost
uninterrupted victories by that industry in these halls. We have seen
sound laws and regulations that protected consumers and the stability
of the financial system repealed or weakened. Just 9 years ago, the
icing was put on that deregulatory cake with the enactment of the
Gramm-Leach-Bliley Act, a law which tore down what was left of the
protective firewalls in our financial system. Little surprise, then,
that without those firewalls the fire has indeed spread across the
financial landscape.
We are paying the price for years of regulatory neglect, and the
responsibility for that neglect is truly bipartisan. Both parties
rushed to enact those measures; both parties have worked to ensure that
financial derivatives--what Warren Buffett has called financial weapons
of mass destruction--remained largely unregulated. Both parties worked
to prevent the inclusion of even the most modest reforms in this
bailout package. And I am concerned that any separate reform package we
might consider in the next Congress will also be bipartisan in its
inadequacies.
There is a chance that Members will have learned a costly lesson, and
that meaningful reform may yet be enacted. But I am skeptical. The
leverage for meaningful reform was this bailout package. Once that
passes, the financial interests that have had their way in this
building for the last two decades will be free to lobby against
anything that may inconvenience them.
Mr. AKAKA. Mr. President, I support the Emergency Economic
Stabilization Act of 2008. While this compromise does not include all
of what I wanted, we must enact this legislation in an attempt to
protect our credit markets and our economy.
The administration has not effectively informed the public on why
this action is needed. The Bush administration has so little trust and
has been such a bad example of governance, I understand why so many
people are skeptical. However, this is a time, where due to instability
and deterioration of the credit markets, we must act. In addition, I
value the expertise of the Federal Reserve Chairman Ben Bernanke. I
have enjoyed working with the Chairman during his tenure. I agree with
his assessment that the situation is as dire as he believes.
Banks and investment banks have failed. Credit has become harder to
get. Uncertainty and anxiety are high. When Chairman Bernanke and
Treasury Secretary Paulson came to us and explained how tenuous the
credit markets are, I understood that we must avert further
deterioration. It is clear that we must try and prevent the absolute
collapse of the financial services industry, which would likely lead to
an even more severe economic downturn, by enacting this bill quickly.
Access to credit is becoming much harder to obtain. Fewer car loans
are being approved. Small businesses are finding credit to be much more
expensive and harder to obtain. The State of Hawaii recently delayed
the sale of bonds due to the poor market conditions.
Our economy cannot function without access to affordable credit.
Credit helps families buy homes or pay for their child's college
education. Businesses rely on credit for operations and investments.
State governments utilize credit to make much needed infrastructure
improvements.
Without access to affordable credit, businesses will fail, more
people will become unemployed, and our aging infrastructure will
continue to deteriorate. We must enact this legislation to improve the
likelihood of a swift economic recovery and try to avert a severe
economic contraction.
The original Treasury proposal included no oversight and was not a
well thought out proposal. It was offensive due to its lack of
accountability and oversight provisions. The purchase and sale of
assets has great potential to be abused and lead to corruption. We must
make sure that this situation, which has been caused partially by
greed, will not be exploited to further enrich the individuals or
corporations that caused this situation.
By working together with the Chairman, we have included more
oversight and accountably provisions to prevent abuse, ensure proper
management, and reduce conflicts of interest. The legislation includes
additional reporting requirements to Congress, mandated audits of the
program by the Government Accountability Office, GAO, and the
[[Page 23580]]
creation of a special treasury Inspector General to oversee the
Troubled Assets Relief Program, TARP.
We will have to closely monitor this program through aggressive
oversight by the Banking Committee and other relevant committees. The
legislation establishes a financial stability oversight board to review
and make recommendations regarding the exercise of authority by the
Secretary of Treasury under this act.
Although the Secretary is able to waive provisions of the Federal
Acquisition Regulation, FAR, the Secretary would need to provide
Congress justification for the determination that there are urgent and
compelling circumstances that make such waiver necessary. This
justification must be reported to the Committees on Oversight and
Government Reform and Financial Services of the House of
Representatives and the Committees on Homeland Security and
Governmental Affairs and Banking, Housing, and Urban Affairs of the
Senate within 7 days of the request. Furthermore, if the Secretary
waives any provisions of the FAR pertaining to minority contracting,
the Secretary shall develop and implement standards and procedures to
ensure the inclusion of minority contractors.
Furthermore, under this act, the Secretary will be required, within 2
business days of exercising his authority, to publicly disclose the
details of any transaction. It also requires the Comptroller General of
the United States to conduct ongoing oversight of the activities and
performance of TARP, report every 60 days to Congress, and conduct an
annual audit of TARP. It would also establish the Office of the Special
Inspector General for TARP. This office would be required to conduct,
supervise, and coordinate audits and investigations of the actions
undertaken by the Secretary and would report quarterly to Congress.
This is very important, as we have found with the Special Inspector
General for Iraq Reconstruction, SIGIR, the SIGIR has been instrumental
in ensuring oversight of our efforts in Iraq. Establishing a similar
office to oversee TARP is a critical component to monitor the actions
approved by this act.
Another important aspect of this proposal is that the authorization
for TARP is graduated. The Secretary will be able to immediately access
up to $250 billion. However, for an additional $100 billion, a
Presidential certification would be needed. The final $350 billion
could only be accessed if the President transmits a written report to
Congress requesting such authority. However, should Congress pass a
joint resolution of disapproval within 15 days of this additional
authority, the additional authority given to the Secretary may not be
used.
The Act also requires the Secretary of the Treasury to implement a
plan to mitigate foreclosures and to encourage servicers of mortgages
to modify loans through HOPE for Homeowners and other programs. The
Secretary would also be required to coordinate with other Federal
entities that hold troubled assets to identify opportunities to modify
loans. I will continue to advocate for additional relief for homeowners
so that people can stay in their homes.
Finally, we must reform the financial regulatory system to prevent
future credit crises from occurring. A lack of effective regulation has
contributed significantly to the current crisis. This legislation
establishes a congressional oversight panel to review the state of the
financial markets, the regulatory system, and the use of authority
under TARP. The panel is required to report to Congress every 30 days
and to submit a special report on regulatory reform prior to January
20, 2009. A comprehensive set of hearings will need to be conducted by
the Banking Committee during the next session to determine what
regulator reforms will be necessary to ensure that future Federal
intervention of this magnitude will not be necessary.
In closing, this is not a perfect bill, but a necessary one to
protect access to credit and ensure that working families can access
mortgages and student loans. It is needed so that businesses can access
credit to pay their expenses and fund expansion. This act is needed to
help ensure that State governments can afford to finance necessary
infrastructure improvements.
I thank Senator Dodd for his leadership in helping craft this
proposal. I also greatly appreciate the efforts made by Senators Reid,
Schumer, and Reed. I look forward to continuing to work with them and
the other members of the Banking Committee to oversee and improve the
troubled asset program.
Mr. JOHNSON. Mr. President, it is no exaggeration to say that our
economy is currently undergoing a period of extraordinary stress and
volatility.
South Dakota has not seen the highs and lows of the housing market in
the same way as other areas of the country, and South Dakotans
exercised strong personal responsibility when it came to buying their
homes, which is why this mess is all so frustrating.
It is very unfortunate that greedy, Wall Street investors brought us
to this point, and that the regulators were asleep at the switch when
we needed them most.
There is no question that something must be done to address this
situation. But, throughout this process, I have made clear that while
this may be a necessary evil, it cannot be a gift that puts undue
burden on the American taxpayer.
I have struggled with this decision, as has the entire Congress.
There is no question that there are reasonable people on both sides of
this issue, and that the package before the Senate tonight is an
improved version of the proposal the administration sent to Congress 2
weeks ago. However, despite the fact that this proposal has merits, I
continue to have concerns that it lacks the necessary protections to
fix the abuses that caused this problem, provides little direct
assistance to American families, does not go far enough to cut the
golden parachutes of irresponsible CEOs, and does not do enough to
address American tax dollars benefiting foreign banks.
The inclusion of the tax extenders package, a bill which I wholly
support, and increases in Federal deposit insurance are important
additions, but they do not address the underlying risk the $700 billion
package is to our taxpayers.
If we are to ask the American people to shoulder such a large and
enduring burden because of the irresponsible and greedy actions of Wall
Street then it is important that we get it right. This is closer, but
it is not close enough. Consequently, I will vote against this bill
tonight.
Mr. HATCH. Mr. President, I rise today to express my great concern
about our economy. Time is of the essence. We must usurp the
opportunity to be proactive, instead of reactive to our financial
situation.
On Monday, my colleagues on the other side of the Capitol voiced the
opinion of their constituents and many Americans. If we are going to
spend up to $700 billion in taxpayer dollars, we need to reach out
beyond Wall Street and into Main Street. Many people fear that the
economy is facing a perfect storm. While this fear may be justified, we
need to make sure that the next step we take, is a step in the right
direction.
There have been several proposals discussed since the House rescue
bill failed to pass. While there have been disagreements as to the type
of plan, everyone agrees that something must be done immediately.
Economists, professors, and government officials all are in concert
that the consequences of inaction far outweigh the cost of a plan to
stabilize the economy.
The Economist magazine pointed out that the current situation
``cannot last long without causing immense damage. Companies will be
unable to raise new money, and more importantly, refinance old loans.
Corporate bankruptcies will soar. Consumers will also find it
difficult, or expensive, to borrow. The result will be a sharp downturn
in demand that will push the economy into a deep recession.''
Scott Schaefer, a professor of finance at the University of Utah's
School of Business, agrees that the ``idea of `do nothing' isn't
feasible--when banks fail they necessarily fall in the lap of the
[[Page 23581]]
FDIC. So the losses from failed banks fall on taxpayers.''
Kristin Forbes, an MIT professor and former member of the President
Bush Economic Counsel, has stated that while this may not be a perfect
bill, ``the risks of not passing it are greater than passing it. If we
wait too long, it might cost us much more.''
Hussan Ally, an economics professor at Ohio State University, sees
the failure to act as resulting in ``the whole economy being in a
depressed state for a long time. We're talking about the Great
Depression all over again.''
I believe that one reason why the financial rescue legislation failed
to pass in the House was because the American people are not convinced
that this bill would help Main Street America or them personally. Along
with this, I believe that many Americans fail to see the connection
with the current crisis with our financial markets and their own future
economic well being. To better illustrate how our failure to address
this situation could affect everyday Utahns, and Americans everywhere,
I want to discuss three hypothetical families.
First is Anne Wilson, a single mother of two high schoolers whom she
hopes will be college-bound in a few years. Anne earns $55,000 per year
as an executive assistant. Through hard work and sacrifice, she
purchased her own home a few years ago. However, she recently
refinanced with an adjustable rate loan. With the savings on her
monthly mortgage payment, Anne set up a 529 college savings plan to
begin saving for her children's education. Even though Anne knows the
cost of education is rising rapidly, she has a plan to see that her
children can go to college. With decent returns on her investment in
her 529 account, combined with student loans and possibly scholarship
money, she believes it will be possible.
However, our failure to provide a financial rescue plan could put
Anne's dream of college for those kids in jeopardy. First, we can
expect the securities in which she has invested through the 529 plan
will be growing much slower or possibly not at all. In fact, there is a
good chance that she will lose some of the money she now has invested.
Second, education loans may not be available because of the credit
crunch, which could grow far worse without the actions of the federal
government.
Until the housing crisis, Anne had some equity in her home that she
might have tapped to help with the college costs. But that equity has
evaporated, and even if it had not, it might be very difficult to get a
loan. Anne will certainly have to readjust her plan, or even abandon
the hope of providing college for her kids altogether. Moreover, if
interest rates continue to increase, which is likely in the absence of
action on a rescue plan, her mortgage payments will go up, adding to
her anxiety.
Next, let us consider, John Baker, a 64-year-old sheet metal shop
supervisor, who hopes to retire in 2 years. For the past 25 years, John
has put the maximum amount of money in his company's 401(k) plan. Over
the years, this nest egg has grown into a tidy sum. In fact, combined
with the Social Security he plans to receive and the earnings from a
part-time job, John thought he was all set. Now, however, things have
changed drastically. His investment portfolio in his 401(k) took a
nosedive and is not likely to recover anytime soon.
Moreover, with rising unemployment, he is not as sure as he used to
be that he can get the good part-time job he was planning on. All in
all, John is having serious second thoughts about retiring and is
wondering if he needs to keep working to age 70 or maybe beyond. Now a
new worry is crossing John's mind. He heard his company's CEO say the
other day that if business does not pick up, there will have to be some
layoffs in his shop. Given his age and relatively high pay, John is
nervous that he might be one of the first to be let go.
Finally, we have Amanda and Derek Peterson, who five years ago
started a small flower shop. With Amanda's business background and
Derek's artistic imagination, the business soon took off and they now
have three locations and a total of 15 employees. The Peterson's had
been talking of expanding the business to two more locations in a
nearby city, but such a move would take an investment of at least
$500,000. Based on their track record so far, getting a business
expansion loan would not have been a problem before the financial
crisis.
Now, however, Amanda cannot find a single bank that will extend them
a loan. Moreover, they recently have had to rely on credit card
financing for running the day-to-day operations of the business. Their
new worry is that their credit card limit will not be reduced or that
the interest rate does not increase. Tragically, instead of making
plans to expand their business, the Petersons are now talking about
which employees they will have to let go if business does not soon
improve.
The families in these scenarios, as well as all Utah and American
families, have a great deal to lose if we do not act to build
confidence and ease the credit crisis. Jobs and livelihoods are at
stake.
This financial rescue is not a question of bailing out wealthy Wall
Street bank managers who made bad investment decisions. It is about
staving off a financial crisis on Main Street that threatens every one
of us and our plans for our families, our hopes for the future, and the
growth we all depend on to keep American what it is.
While the failed bill would have saved the banking industry, we could
be more proactive in jumpstarting the economy. The failed plan was only
a remedy to a crisis and not a cure for the economy. In order to cure
the economy, we must spur job growth and investment. The most obvious
and substantial way to achieve this is by providing tax relief to
Americans. Let's put money back into the pockets of taxpayers.
That is why I have proposed including the tax extenders legislation
for several reasons. First, it is long overdue. Businesses and
individuals depend on these tax incentives in order to invest.
Businesses invest in research and technology which in turn creates
jobs. Individuals invest in retirement savings, college tuition, and
health care costs.
Adding the AMT patch would protect 23 million additional American
families from the clutches of the alternative minimum tax for this
year. The research credit, which is vital to U.S. economic growth and
job creation, and the energy tax incentives, which will also add many
new jobs and help us move to energy independence. It is estimated that
the solar and wind tax credits alone are predicted to create more than
116,000 jobs. I have also proposed other tax incentives aimed at
encouraging private investment of troubled mortgage-backed security
instruments.
In order to build more confidence in our banking system, I have
suggested increasing the FDIC insurance limit. This insurance limit has
not been adjusted since 1980 and increasing it will give individuals
much-needed assurance that their deposited savings are secure.
We can do more to improve the economic situation. I do not believe
the answer is providing one bailout over another bailout. I do not
believe we should be handing out rebate check after rebate check. I
believe we need to assist in slowing the inevitable route our economy
is heading and providing incentives for investment and job growth. That
is why I have proposed including the tax extenders, providing
incentives to invest in mortgage-backed securities, and raising the
FDIC insurance limit.
Instead of stabilizing the economy by only injecting cash into the
system, we should reverse the direction the economy is headed by laying
the groundwork for a strong economic future. Extending these tax
credits will provide for more growth, innovation and job demand into
the future.
I would like to now spend some time and drill-down into some of the
finer points in this legislation and address some of the broader
concerns raised by our current economic situation.
As I noted before, we should move ahead with the package to support
the
[[Page 23582]]
consumers of the financial sector's services--depositors, check-
writers, credit card users and the merchants who rely on them, people
who need to transfer cash or who need to borrow working capital for
their businesses--not the shareholders or managers of the institutions
in trouble. We must unfreeze the credit markets in a manner that lets
depositors have the full use of their money, and that allows the check-
writing and payments mechanisms to function. Otherwise, perfectly
solvent individuals and businesses will not be able to pay bills or pay
their employees, even though they have cash.
Toward that end, the Federal Reserve should be willing to let banks
use the impaired securities as collateral at the discount window, at
some fraction of their face value that represents a reasonable first
guess at the real value of the assets. The banks will be responsible
for repaying the Federal Reserve the amount they borrowed, whether the
bonds turn out to be worth more or less than this amount later on. This
will tide the financial system over until the Treasury purchase of the
distressed assets gets under way.
The proposal before us would have the Treasury arrange for the
evaluation and unbundling of the mortgage-backed bonds. The process
will have to determine which of the loans are performing, and which are
not. As the content and status of the mortgages' underlying assets
becomes known, people will know what the securities are worth, and the
market can then attract private capital to take them over.
Ultimately, banks that do not have enough capital to be able to
function will either have to raise additional funds in the market, or
the FDIC must step in to close them or arrange a sale or merger to a
stronger bank.
I support the increase in the amount of deposits covered by the FDIC.
While the uncertainty over the health of the banking system continues,
I would like to go further and extend deposit insurance temporarily to
all checkable deposits, including money market funds. All institutions
so protected should be charged a fee, such as the banks pay now, to
replace any losses the FDIC incurs.
The FDIC is allowed to borrow from the Treasury. That borrowing
facility should be reaffirmed and enlarged as needed. The limit on the
national debt will be increased under this bill, to enable the Treasury
to purchase assets. If further increases are needed to allow for
additional borrowing by the FDIC, they should be forthcoming. However,
expansion of FDIC coverage might well discourage withdrawals from bank
and money market accounts, and render the additional assistance
unnecessary.
Other steps need to be taken in the short and long run. Urgent
regulatory changes must be made to support this program. More broadly,
Congress must insist that there be better coordination between
regulatory, monetary, and tax policy in this country in the future.
We still need to come to grips with Fannie Mae, Freddie Mac, and the
rest of the Federal agencies that intervene in the housing sector.
Relying on the institutions that contributed to the financial chaos to
clean it up does not strike me as the best approach.
Part of the current problem stems from the unfortunate interaction of
two regulatory excesses: minimum capital requirements for financial
institutions, coupled with a blind, rigid mark-to-market rule for
valuing assets on a bank's books. The SEC and the Financial Accounting
Standards Board, the latter a private entity, are discussing changes in
these areas. In my view, they need to move at once to suspend mark-to-
market rules and to ease capital requirements.
When markets malfunction, and trading in a class of securities simply
stops, it is wrong to force institutions to pretend that assets have no
value, when, in the longer term, they are clearly worth something close
to their face amount. This is especially damaging when the forced
write-downs cause the institution to fall below minimum capital
requirements. They must then be closed or merged, often at fire sale
prices. This further shakes confidence in the financial system,
discouraging lending among banks, lowering asset prices further, and
making more institutions run afoul of the regulations.
Down the road, Congress needs to hold hearings to review the damage
that mark-to-market rules and capital requirements have done in the
present situation, and what changes would be advisable. We also need to
consider the process that generated these rules. We need to examine why
these difficulties were not foreseen when the regulations were written,
and whether some alternative arrangements for input by the Treasury and
the Federal Reserve, as well as the business community, might produce
better results in the future.
The rest of the economy is in urgent need of attention too. This
package fails to address broader economic problems. The long economic
expansion is aging, as the stimulus to investment and hiring enacted in
2003 has run its course. Investment spending is slowing, which would
lower productivity gains and wage growth. We need to keep business
fixed investment in new plant and equipment and commercial construction
moving forward. That would help keep employment, productivity, and
wages growing, and keep the rest of the economy healthy.
The 2008 stimulus package contained one progrowth investment
incentive. That was bonus expensing, immediate write-off of one half of
investment in equipment undertaken by the end of 2008. We should extend
that provision through 2010. Ideally, this reduction in the tax burden
on creating and operating capital in the United States should be made
permanent, as should the 15 percent tax rates on dividends and capital
gains. These steps would raise real returns to people doing business
fixed investment, leading to stronger growth. It would raise returns to
savers and lending institutions as well, aiding in the financial
recovery.
Congress has paid too little attention to the impact of taxation and
regulation on economy activity and expansion. We have been content in
recent years to dump responsibility for economic growth on the Federal
Reserve, while we have let fiscal policy run amok, letting taxes rise
and spending the proceeds several times over. Those few recent tax
changes that were aimed at promoting saving, investment, and hiring are
scheduled to expire. We need to remember that it is Federal tax and
regulatory policies that primarily affect real economic activity.
Lowering the tax and regulatory barriers to growth helps to expand the
private sector. Government spending largely displaces private activity,
and forces higher taxes that retard growth.
We have tasked the Federal Reserve with maintaining stable prices and
low unemployment. In fact, an overly simulative monetary policy that
generates inflation and weakens the dollar ultimately raises tax rates
on investment, destroys growth and jobs, and injures people on fixed
incomes. Any initial expansion of real output quickly decays into
speculative bubbles in commodities, housing, or an inflation of the
general price level. The Federal Reserve can hit both targets only by
focusing on the goal of stable prices and a sound currency.
Unfortunately, beginning in the late 1990s, the Federal Reserve
abandoned a decade of reasonably steady monetary policy, and indulged
in a policy of go-stop-go. It eased excessively after financial
disturbances and the Y2K panic of the late 1990s, contributing to the
dot.com bubble. It tightened too much in 2000, contributing to the
recession. It eased too much, and held short term interest rates too
low too long, following the recession, contributing to the commodity
and housing bubble, and the weak dollar. Now, we have seen the
resulting imbalances force the economy to a stop.
We need to have a reconsideration of the Humphrey Hawkins Act, which
gives the Federal Reserve a congressional mandate to pursue apparently
conflicting goals. At least, they conflict if the conventional wisdom
of the 1930-1980 period is applied, in which printing more money and
encouraging a little inflation is considered beneficial, rather that
counterproductive. We need to have a heart-to-heart discussion with the
Federal Reserve about
[[Page 23583]]
keeping to a stable policy, and keeping its eye on the long-term prize.
The country would have been better served if the 2003 tax changes had
been enacted in 2001 in place of the Federal Reserve's aggressive
easing in the 2002-2005 period. The correct policy mix, then, now, and
always, is sound money, low tax rates at the margin on work, saving,
and investment, and a sensible regulatory scheme in which the pieces do
not conflict and the costs are kept to a minimum. That policy mix
rescued us from the stagflation of the 1970s. It can do the same today.
Unfortunately, Congress deals with these issues on a piecemeal basis.
The executive branch is divided into many departments and agencies that
have their own narrow focus and push different agendas. Differing views
on how the economy works add to the confusion. Somehow, we need to get
some coordination and oversight of this whole process, and make certain
that all the players understand the broad objective and the role that
each must play to make it work. I intend to push for that in the year
ahead.
Mr. BINGAMAN. Mr. President, I rise today in support of H.R. 1424, a
bill whose two components represent an important investment in
America's economy and whose passage is critical for ensuring our
Nation's long-term prosperity. First, the bill includes the Emergency
Economic Stabilization Act of 2008, which will ``provide authority and
facilities that the Secretary of the Treasury can use to restore
liquidity and stability to the financial system of the United States.''
Second, the bill incorporates the Senate substitute to H.R. 6049, which
extends tax incentives addressing our country's most pressing
challenges.
I have previously come to the floor, on several occasions, to explain
why we must commit to passing the ``tax extenders'' legislation. And I
was glad that on September 23, this Chamber approved H.R. 6049 on a 93
to 2 vote. In particular, the bill contains a robust package of tax
incentives for clean, renewable energy and energy efficiency incentives
that I, and many of my colleagues, have worked for since the beginning
of this Congress. These incentives will enable us to become a more
energy efficient nation, wean us off our dependence on fossil fuels,
and reduce our greenhouse gas emissions. I continue to support the
extenders bill, and I hope that including the extenders bill in the
package that will soon come before us will increase the likelihood that
the extenders will become law. But I will focus my remarks today on the
Emergency Economic Stabilization Act.
While we can dispute the causes, there is no denying that our country
is facing a credit crisis. Paralyzed by illiquid loans on their books,
banks of all sizes and in all corners of our country have demonstrated
reluctance to make loans to businesses, individuals, and other
financial institutions. The fallout has been especially apparent on
Wall Street, where we have witnessed the collapse or near-collapse of 3
of the 5 independent U.S. investment banks, alongside the failure or
near-failure of many additional institutions that play a central role
in our Nation's financial services infrastructure. But let's be clear:
The pain extends far beyond Wall Street.
With lending frozen, Americans are challenged in obtaining financing
for the most important transactions they undertake. The so-called TED
spread, which reflects lending willingness among banks, has reached its
highest level in 25 years. When banks charge one another high premiums,
those costs are ultimately borne by those who seek to borrow. And as
mortgage lending remains tight, fewer Americans are able to purchase
homes. Similarly, the approval rate for auto loans has fallen from 83
percent last year to a mere 63 percent this year. More than 25 major
lenders have either cut back in private lending to students or have cut
off student lending altogether. And nearly 3 in 4 small business owners
say they are having trouble finding loans. Without loans, many of these
businesses will be unable to expand; others will fail.
So, too, are our States, counties, and cities feeling the impact, as
they face skyrocketing costs to issue the bonds that pay for day-to-day
operations and capital projects. And I note with great concern the
credit crunch's impact on the Nation's utility infrastructure. Our
public and private utility companies rely heavily on debt to finance
infrastructure enhancements, but the volume of bond issuances by
utilities fell 50 percent in the last quarter and 25 percent year-over-
year. Being unable to obtain financing inhibits U.S. utility companies
from providing low-cost and reliable electricity, water, and gas to the
Nation's businesses and households.
Like my colleagues, I have heard from many who are concerned by the
prospect of a Government intervention in the credit markets. But I have
also heard from people across New Mexico about the tremendous pressures
they are facing because of this crisis. In Ruidoso, a rural community
more than 2,000 miles from Wall Street, the credit crunch left the
municipal school district with just one bidder for a $3 million bond
issue. Unable to delay the school repairs and expansions that these
bonds will finance, the school board was forced last month to sell the
bonds at far less than it would have received just weeks earlier. In
Carlsbad, the Community Foundation's endowment has declined
significantly with the stock market, prompting the Foundation to
announce that it may scale back grant awards and scholarships. In
northwestern New Mexico, along our States border with Arizona, the
Navajo Nation's Budget and Finance Committee is now meeting to identify
which projects to cut because of financial losses directly tied to the
credit crisis. And in the capital city of Santa Fe, Lehman Brothers'
failure has forced the Transportation Department to refinance bonds for
highway construction. The refinanced terms will cost our State an
additional $78,000 annually in debt service payments.
Failing to address the lack of available credit threatens to create a
downward spiral that will cripple our Nation's economy. Without access
to credit, businesses cannot stay afloat and grow. As Federal Reserve
Chairman Ben Bernanke testified last week, without a rescue plan, the
country stands to lose an additional 3.5 million jobs over the next 6
months. And if we do not pass this legislation, we are sure to see
further declines in our Nation's capital markets, impacting everything
from families' college savings plans to workers' 401(k)s and pensions
to university and hospital endowments. Finally, we need to act to
prevent our entire financial services sector from suffering major
disruption. The sector's gross liabilities have climbed from 21 percent
of GDP in 1980 to 116 percent last year, much of which is owed from one
bank to another. This, says the Financial Times' Martin Wolf, means
that absent swift action to restore liquidity, ``collapse will
follow.''
These challenges come at a time when America is hardly in the
position to weather a storm. To take just a few indicators: One in
eleven mortgages is delinquent or in foreclosure; credit card defaults
have increased by 15 percent from 2001; the Nation has lost more than
600,000 jobs this year; and more than half of our States have moved to
cut spending, use reserves, or raise revenues to address funding
shortfalls.
Based on this evidence, I have concluded that Congress faces an
imperative to act. Of course, in doing so, we must be responsive and
politically realistic. The plan before us today does not represent the
best possible solution--but it is a responsive and politically
realistic one.
I did not feel the same about Secretary Paulson's initial plan, which
he released on September 21. I had read his 3-page proposal to suggest
that the Secretary was asking for what amounted to a $700 billion blank
check, and I would have voted against that proposal. Fortunately,
Congressional leaders have significantly enhanced the Secretary's 3-
page proposal. I applaud the Chairmen of the Senate Banking and House
Financial Services Committee for stepping in to move us in the
direction of greater transparency,
[[Page 23584]]
oversight, and protection for the American taxpayer. And I appreciate
my colleagues who led the negotiations--particularly Senators Dodd and
Gregg--for developing a bipartisan compromise that I could support.
First, the plan minimizes risks to taxpayers, a critical priority
given our dangerously high national debt of nearly $10 trillion. As CBO
Director Peter Orszag has testified, the ultimate cost of the plan will
be far less than $700 billion, for the simple reason that the
Government will be able to sell the assets it acquires. But we cannot
be sure the cost is zero, and that is why I have conditioned my support
on ensuring that the Treasury receive equity in firms that benefit from
an infusion of public funds. I applaud the inclusion of such a
provision in this bill, as well as a requirement that the President
propose legislation to recover any anticipated losses.
Second, we have added significant oversight and reporting
requirements, including a Congressional oversight panel; audits by the
comptroller general; and the appointment of an inspector general for
the program. I have great respect for the Treasury Secretary, but feel
that no single individual should ever be entrusted with such a
herculean undertaking without oversight.
Third, participating companies would be required to limit executive
compensation. Like so many Americans, I am troubled by reports of
executives who walk away from failed financial service firms with
stratospheric paychecks. This bill begins to address that justifiable
concern.
We cannot afford to sit by idly and let this crisis take a further
toll on the economy. But we also must be realistic about the
limitations of this legislation: It is a band-aid intended to stop the
bleeding. It will not address the inadequate regulatory framework that
allowed this crisis to develop, and Congress must commit to enacting
comprehensive reforms that will ensure we never again find ourselves in
such a precarious position.
Ms. MIKULSKI. Mr. President, regrettably a rescue plan is needed.
Greed on Wall Street and lax regulatory practices from this
administration got us into this mess. Taxpayers are angry and so am I.
Americans who played by the rules are being asked to pay the bills for
those that didn't. Now, Congress must take steps to protect taxpayers,
protect the economy, protect the middle class, and protect our way of
life. I stand ready to do my part.
But if I am going to vote for this rescue plan I want reform and a
real commitment: regulation, oversight, and strong enforcement to
what's on the books not a blind eye to those who cooked the books.
Heart and soul I am a regulator and a reformer. Time and time again
we've seen the consequences of a lax regulatory culture and wimpy
enforcement. Well I've voted over and over for more teeth and better
regulation--to strengthen the Consumer Product Safety Commission, to
get rid of lead paint in toys and lead in the bureaucracy, to make sure
the FDA doesn't approve dangerous drugs and stop predatory lending and
flipping.
The bill that got us into this mess in the first place was Graham-
Leach-Biley. It got rid of the distinction between investment banks and
commercial banks. That lowered the bar on regulation and allowed for
casino economics. I was one of nine Senators to vote against it. I said
we were going to create an environment where we were creating whales
and sharks and the minnows would be eaten alive. Regrettably, my
prediction proved right.
I was told I was old fashioned. I was told ``Get with it Barb, we're
in a global market.'' Yes, I do believe in old fashioned values:
honesty and integrity.
We need to get back to basics. It is not only about this bill. From
tainted dog food to toxic securities Wall Street acted like they were
masters of the universe but now they took us into a black hole.
The U.S. is in a credit crisis and that crisis affects everyone. As
Tom Friedman said today in the New York Times,
We're all connected . . . you can't save Main Street and
punish Wall Street anymore than you can be in a rowboat with
someone you hate and think that the leak in the bottom of the
boat at his end is not going to sink you too.
The credit crisis affects jobs, and what's going on in our economy.
Someone who wants a car to get to work can't get a loan to buy the car
and that means the car dealer won't get the money to restock inventory
and that car factories might shut down. And it means that person might
not be able to get to their job.
It is a chain reaction.
Even if you don't think you own stocks your pension does. Towns and
cities use credit to build and improve schools. Local governments use
credit to fix intersections, and build highways and bridges.
That single mother who wants to go to community college uses credit
to invest in herself. She won't be able to get help unless we act.
We need rescue, reform, and retribution. No blank checks and no
checks without balances. We also need a 21st century regulatory
structure to protect taxpayers, help homeowners and guarantee no golden
parachutes for the people who got us into this mess.
Senators Dodd and Gregg and my other colleagues did a good job of
improving the Bush plan. This bill is much better than the Bush plan
and goes to my principles. It protects taxpayers, has oversight and
transparency, makes sure taxpayers benefit when economy improves, and
it says no to golden parachutes.
However, I am disappointed in what is in here for homeowners. This
was an opportunity to help homeowners, and show them whose side we were
on.
There is some help but not enough. More people will get out of
subprime mortgages and into FHA's. This bill should have said that
families could have a work out plan to save their home. But
unfortunately bill goes all out to help Wall Street and only halfway to
help homeowners.
Many of these homeowners were hurt by predatory lending and deceptive
advertising. These fraudulent lenders said let the good times roll.
Well the good times are over and it's time for heads to roll.
That is why I went to work getting money in the Federal checkbook for
the FBI to do mortgage fraud retribution.
The FBI's mortgage fraud workload increased 200 percent in 3 years.
At April 16, 2008, at my CJS hearing, I asked FBI Director Mueller,
``How have cases increased? What do you need?'' He answered that he
needed more funding for agents dedicated to mortgage fraud
investigations.
So I provided $10 million to hire at least 25 additional FBI agents
dedicated to investigation of mortgage fraud. So I'm coming after the
scam artists and predatory lenders and won't stop until they get what
they deserve.
I have great reservations about this legislation but I will vote for
this bill. I don't think it goes far enough. I wanted more help for
homeowners and more teeth in the oversight.
Is this a good bill? It is a lifeboat bill. We have no guarantees but
it's a step we have to take. It's an immediate crisis and we have to
restore confidence and restore stability so we save jobs and save our
economy.
It will deal with the credit crisis. If we do not deal with the
credit crisis, I believe that the Main Street economy will have to pay
the bill for the bailout and pay the bill again in lost jobs, the
ability to get along and in shrinking retirement and pension. So I will
vote for this bill. But I heard the taxpayers loud and clear.
Mr. BURR. Mr. President, I rise today to speak on the financial
crisis threatening our Nation. Like my fellow North Carolinians, I am
very concerned and angry about the circumstances that have brought our
country's economy to the brink and that now necessitate the Congress to
act. While pointing fingers is easy, the grave fact remains that we are
facing one of the most significant economic challenges we have ever
confronted--one that threatens our very way of life.
I have heard from thousands of hard-working citizens who have spent
their
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entire lives acting responsibly, only buying a home that they could
afford, working hard to put food on the table, saving money to send
their kids to college, and only borrowing responsibly when necessary.
They are angry, and they have every right to be. I am angry, too. It is
wrong and it is disgraceful that responsible, hard working people of
this country are now being asked to step in to fix a mess caused by the
irresponsible and greedy behavior of others. Much of what got us to
this point was not only reckless behavior on Wall Street but also the
fact that many people took out risky mortgages that they simply could
never afford. A boom of easy money has led to a bust, which has now
resulted in a collapse of housing markets all over the country and a
potential collapse of our system of credit--the very lifeblood of our
economy.
Let me be clear--this crisis threatens the financial security of each
and every one of us--whether you have a retirement savings account or a
pension, own a home, want to buy a home or a car, or have a savings
account for your child's education or want to borrow for college. The
current financial instability, if left unchecked, threatens the ability
of small businesses and family farms to meet their payrolls, purchase
fuel, and pay for their day-to-day business operations as their credit
lines dry up and disappear. While many believe that this action is a
bailout of Wall Street, the fundamental reason the Senate is compelled
to act today is to stop an economic collapse of Main Street. Every day
that goes by, our financial system grinds closer to a complete halt. We
must act to get to the roots of this financial turmoil and get our
financial system moving again.
As the health of our financial system has rapidly deteriorated, many
banks have restricted or stopped lending altogether. Families,
businesses, and local governments have found it harder to borrow money,
money that is needed just to keep daily operations going. Without
access to credit, businesses can't borrow money to buy equipment needed
to produce their products. Cities and towns can't borrow money for
water and sewer systems, roads, or other critically important community
projects.
Over the past 2 weeks, I have heard from small businesses, cities,
and towns in North Carolina that have been stranded by this economic
crisis--businesses that can't get their standard lines of credit to
operate and whose loans have been called. I have heard from counties
throughout my State recounting how this national financial crisis is
making it impossible to borrow from banks to pay for their schools and
other critical projects. These businesses and local governments aren't
folks with poor credit ratings or folks who have been late on or missed
their loan payments. These are folks with strong credit histories who
are the innocent victims currently caught up by our current financial
crisis, and these are the honest, hard-working folks this legislation
before us is meant to help by getting credit, the necessary lifeblood
of our economy, flowing again.
Whether we like it or not, we now face a financial crisis that is
unprecedented in scope, with repercussions so far-reaching that no
American would be immune. So we now face a choice. We could do nothing
and just let our entire country--which depends on credit to function
every day--seize up and come to a halt. We could do that, but history
has painfully shown us what happens when you do nothing and credit
dries up. America felt this during the Great Depression. The result was
a 40-percent foreclosure rate, massive unemployment, and years of
economic hardship for millions.
Like many of my Republican colleagues in Congress, I cannot stand the
notion of supporting something that violates my fundamental belief in
free enterprise, the freedom to succeed, and the freedom to fail. That
we have to consider this legislation at all marks a sad day in our
Nation's history. But as a public servant, and as an elected
representative of the Great State of North Carolina, I do not believe I
can sit by and let this country fall into the worst economic state that
it has ever faced. The risks of just rolling the dice, doing nothing,
and letting the chips fall where they may are, in my opinion, too high.
A working credit system is core to a strong economy. The bipartisan
bill before us is our best chance, and perhaps our last chance, to
avert this looming crisis.
While the need for this legislation is regrettable, I am heartened
that the plan before the Senate includes very important protections for
taxpayers, limits on executive compensation for Wall Street, and strong
measures to ensure proper oversight and accountability. Under the
legislation:
Those companies that sell their bad assets to the Federal
Government must also provide warrants--a type of ownership
stake--so that taxpayers will benefit from any future
profits. If the program ends up making money for taxpayers,
that money must go toward paying down the national debt. If
the program loses money for taxpayers, then the President
will be required to submit a proposal to Congress for
recouping those losses from the financial institutions.
Corporate executives will have their golden parachutes
clipped and any unearned corporate bonuses must be returned.
In addition, companies will pay taxes on executive pay and,
in many cases, must limit executive pay.
The FBI has already begun preliminary investigations into
criminal wrongdoing by the management of 26 financial
institutions, including Fannie Mae, Freddie Mac, AIG, and
Lehman Brothers. The FBI is also pursuing over 1,400 mortgage
fraud cases nationwide. This legislation will beef up that
enforcement.
Savings deposits will be insured up to $250,000 by the
Federal Deposit Insurance Corporation, FDIC, up from the
$100,000 limit currently in place. This additional protection
is very important for retirees, near retirees, and small
businesses so that they know their savings and basic business
operation accounts are indeed safe.
An oversight board will be established to monitor the
Treasury's activities. In addition, a new inspector general
will be appointed to protect taxpayers against fraud, waste,
and abuse.
Rather than giving the Treasury all the funds at once, the
legislation gives the Treasury $250 billion immediately and
then requires the President to certify that additional funds
are needed. Congress will have the power to deny those funds.
After we weather this crisis, and I am confident we can, I look
forward to working with my colleagues in the Congress to improve the
regulatory structures that govern our financial system. As this crisis
makes abundantly clear, many of our regulations to deal with financial
markets are outdated. It is also important that we prosecute any
corporation or individual who broke the law and contributed to this
mess to the full extent possible. We must never find ourselves in this
situation again and never again place American taxpayers and their
livelihoods at risk.
Ms. COLLINS. Mr. President, I rise to discuss the energy tax
provisions of Senator Dodd's amendment to the Emergency Economic
Stabilization Act. These provisions were included in the tax extenders,
H.R. 6049, passed by the Senate last week. I strongly support these
provisions, and I am pleased that they are included in the financial
rescue plan we are voting on today.
The United States needs a balanced, comprehensive national energy
policy that addresses our immediate problems and future needs without
compromising the health of the environment. In fact, I believe we must
embark on a national effort to achieve energy independence by 2020.
This effort will require a stronger commitment to renewable energy
sources and energy efficiency and conservation.
Some of the best ideas about what we need to do now and over the next
5 years to address our Nation's energy crisis are coming from people in
my State of Maine. A professor at the University of Maine has a plan
for clean, renewable offshore wind power to supply as much as 40
percent of the Nation's energy. Offshore wind production that is out of
sight from land could provide an affordable source of renewable energy
directly to population centers on each coast while supplying thousands
of new jobs. In addition, it would expand Maine's electricity supply so
that people could transition away from using oil.
Maine is also well positioned to take a leading role in the
development of this tidal power. The U.S. wave and tidal energy
resource potential that
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reasonably could be harnessed is about 10 percent of national energy
demand. In Maine, a consortium of the University of Maine, Maine
Maritime Academy, and industry is poised to become a key test bed site
for tidal energy devices.
Maine also has a large supply of wood that could be used as an energy
source. These stoves dramatically reduce both indoor and outdoor air
pollution, use up to 50 percent less wood for the same amount of heat
and utilize one of Maine's renewable resources. I am pleased that the
energy tax bill includes a provision I authored to provide a $300 tax
credit for replacing an old, inefficient wood stove with a cleanburning
wood or wood pellet stove.
This credit will be an important tool to help people in my home State
and throughout the Nation find affordable ways to heat their homes this
winter. This legislation provides a credit for home heating systems
which have thermal efficiencies greater than 75 percent and which use
renewable, biomass fuels. Efficient, clean-burning biomass equipment
currently is available that can achieve this thermal efficiency, and I
believe that equipment should and would be eligible for tax incentives
in this amendment.
Mr. President, again I am pleased that we are discussing renewable
energy and energy efficiency tax credits today. I look forward to
seeing these credits signed into law soon.
Mr. BUNNING. Mr. President, I rise to say a few words in response to
what I have heard on the floor of the Senate today. Many Senators have
stood up and spoken in favor of the Wall Street bailout bill we will be
voting on later tonight. That is their right, but they are only telling
one side of the story.
I have heard a lot about changes made to this bill in the last few
days, but make no mistake about it, this is the same bailout that the
House of Representatives rejected Monday afternoon. The only thing that
is different is the packaging. The failed House bill has been attached
to a tax bill which the Senate has already passed overwhelmingly, a
mental health parity bill which is broadly supported in the Senate, and
an increase in FDIC insurance limits. In other words, a few sweeteners
have been added to buy off a few more votes. But the bailout remains
the same.
Now, let me say a few words about some of that lipstick. Though the
tax extenders bill does not have everything I hoped for in it, I
strongly support it and voted for it just a few weeks ago. I also have
cosponsored the Senate version of the mental health parity bill. I
still support both and want to see them become law. I am disappointed
that I am being put in a position of having to vote against those
bills.
I have been clear since Secretary Paulson proposed his plan that I
thought it was a bad idea and would not work. I still think so, and
apparently so does a majority of the House of Representatives. The
House rightly rejected the bailout we will be voting on tonight because
it is a bailout of Wall Street at the expense of Main Street. The
American people are outraged by this proposal, and all any Senator
needs to do is stand around their front office and listen to the phone
calls to understand that.
Now, about the proposal itself, I have no confidence it will work,
and the only people I have heard that have confidence that it will work
are the Treasury Secretary and the Chairman of the Federal Reserve, the
people who proposed it in the first place. Even Senators supporting
this bill say things like ``I hope this will work'' or ``we have to do
this because nothing is not an option.'' I say that $700 billion is a
lot of money to gamble on hope, especially when there are other
options.
Sadly, no other options have been considered. Secretary Paulson and
Chairman Bernanke both admitted they did not consider other proposals.
Congress certainly has not considered any other option. Why not?
Because we are told there is not time and we have to do something now.
Well, here we are, 2 weeks after the initial proposal, and the sky has
not fallen.
Now, I recognize there are real problems in our financial markets and
those problems could hurt the overall economy and average Americans. As
I have said on this floor as recently as last week, we have both policy
and structural problems in our financial system that need to be
addressed. Those problems are largely a result of bad monetary policy,
bad governmental policies, and bad oversight by regulators. But these
problems cannot be fixed by just throwing money at Wall Street as we
run out the door to go home and campaign. They require serious thought
and serious work.
While the problems in our financial markets have been a long time in
the making and cannot be solved overnight, the freeze in the credit
markets and the panic that we are seeing now came about rather quickly.
That is because Secretary Paulson and Chairman Bernanke set
expectations for Government intervention when they bailed out Bear
Stearns in March. The markets operated all summer with the belief that
the Government would step in and rescue failing firms. Then they let
Lehman Brothers fail, and the markets had to adjust to the idea that
Wall Street would have to take the losses for Wall Street's bad
decisions, not the taxpayers. That new uncertainty could be the most
significant contributing factor to why the markets have lost
confidence. Even worse, to sell the public and Congress on this Wall
Street bailout, the President, Secretary Paulson, and Chairman Bernanke
have pushed the media and public to the edge of panic by telling
everyone we are staring at the second coming of the Great Depression.
But this bill is not going to solve those problems. I am not alone in
my concerns about this bill. Last week, I entered into the Record two
letters from nearly 300 economists who said it will not work. I have
also heard from many market participants that this program will not
work. In fact, the only way anyone has any confidence that this plan
will work is if the Government overpays and gives a windfall to the
banks and others selling their bad investments. But that is not just
dishonest, it is also not even the most efficient way of getting funds
into the institutions.
This bill also has no requirements that the institutions take their
newfound cash and use it to lend to Main Street or anyone else. They
are going to put that money to the use they think is in their best
interest, not in the best interest of the average American.
Now, I do support taking action to address the mess Government
created. To restore confidence, instead of giving the Secretary $700
billion, we should send a signal that we are serious about this and
stay in Washington until we have a real solution. One way we could do
that is to give the Secretary a far smaller amount of funds to use to
unfreeze the markets and take a few weeks to hold some hearings, meet
with experts who might have different ideas, and find a way to fix what
is broken. We certainly should not just rely on the opinions of the
people who created this mess and stand to benefit the most from this
proposal.
There are plenty of other ideas that are worth exploring but,
unfortunately, have been ignored. We could allow companies with
earnings overseas to bring that money back to the United States tax
free if they invested it in the same troubled assets the Secretary
wants to buy. Rather than buying toxic paper, we could create a system
to support the top-quality, AAA-rated, debt market, which must begin
functioning for the credit crunch to end. We should also immediately
put in place policies that will encourage economic growth, such as
energy exploration and development and tax policies to encourage job
creation. We also need to address the regulatory and structural
problems I mentioned earlier. I am sure there are plenty of other ideas
that could help as well. My intent here is not to list everything that
needs to be done but to point out that there is a lot that should be
considered and is not even being discussed.
Finally, I want to say that I hope for the best with this bill. I am
going to vote against it, and I hope that I am
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wrong. Even if this bill passes and becomes law, I am not going to give
up on looking for the right long-term solutions to our problems.
Mr. CARDIN. Mr. President, we are here tonight to take emergency
action to rescue our Nation's economy. Before us is a compromise
measure--the product of an intense process that Congress has entered
into reluctantly. It is the result of negotiations between Democrats
and Republicans, between House and Senate, and between Congress and the
Administration. This evening, as we prepare to vote, Americans still
have many questions as to how the bill's provisions will be implemented
and what the eventual impact will be on our economy. We remain stunned
that the greed of a few necessitates sacrifice from all of us. For
these reasons, I understand the opposition of so many Americans to the
news of this bill, one of whose goals is to restore stability to the
markets. I have heard from many Marylanders who have expressed to me
their anger, a sentiment that I share.
This vote is one of the most unpleasant I will have taken during my
22 years in Congress, and I come to the floor with anger and sadness,
but also with determination to do what is right for this country.
This is not the bill that I would have written, but it represents our
collective deliberations. Our economy is in dire straits, and our time
is limited. Not because of a pre-determined adjournment date, but
because markets across the world are looking to the United States hour
by hour for action that will restore the world's confidence in our
economy, and every day that we delay diminishes that confidence.
This crisis was created in large part by the Bush administration's
hands-off approach to financial institutions. Over the last 8 years, we
have seen unemployment rise, real wages and property values plummet,
budget and trade deficits soar, and a burgeoning dependence on foreign
capital and foreign energy.
At the start of 2001, we had projected surpluses of $5.6 trillion
over the next decade. But in the last 8 years, the administration's
economic policies have squandered those surpluses and produced annual
deficits that now near $500 billion. But what was occurring out of the
view of most Americans created the tipping point. Deregulation of Wall
Street led to a new paradigm in which greed was rewarded. Financial
institutions were incentivized to create complex financial shell games
that enriched the few while hiding the true cost to this Nation of too-
easy credit and ill-advised mortgages. And so, today, the first day of
fiscal year 2009, we are faced with a catastrophic economic situation--
tightening credit, shrinking 401(k) plans and money market accounts, a
wildly lurching stock market, a drastic restructuring of major American
corporations, banks that will not lend to other banks, and the lowest
levels of consumer confidence in our Nation's history.
Nearly 2 years ago, I took the oath of office for the U.S. Senate. It
reads in part, ``I do solemnly swear that I will support and defend the
Constitution of the United States against all enemies, foreign and
domestic.'' In the closing days of this administration, our enemy
presents in the form of a severe crisis of confidence in the American
economy--one of the gravest that our Nation has ever faced. No nation
can continue to thrive without solid economic footing, and so it is
imperative that we act in the best interest of the United States and do
our best to resolve this crisis. This measure, crafted under the
leadership of Majority Leader Reid, Senators Dodd and Gregg, and many
others in this body, as well as our colleagues in the House, is the
result of that effort. I believe it is an honest and responsible
attempt to bring near-term stability to our situation.
If we do not act, we are jeopardizing far more than the future of the
financial district. This is not about the balance sheets of a New York
brokerage house or even a few national banks. Rather, it is about the
balance sheet of every American family. If we do not act, we will
endanger Americans' ability to secure an affordable car loan, mortgage,
or college loan. We will jeopardize the retirement savings accounts of
near-retirees who hope to leave the workforce in the next few years,
and families trying to build a secure future for the years to come.
More than 50 percent of families have a stake in the markets--either
through mutual funds, 401(k) plans, TSPs for Federal employees, or
stocks.
If we do not act, we will place at risk our small and large
businesses--access to loans is critical to their ability to survive and
thrive, and if credit is unavailable, these businesses will be unable
to make payroll, stock their shelves, or keep their doors open. With
that in mind, many Members, including myself, awaited the
administration's proposal, which they submitted to Congress on Saturday
morning, September 20. In that three-page proposal, President Bush
asked Congress and the American taxpayers to follow him into uncharted
territory and restructure our entire financial system. The Treasury
Department proposal asked Congress for unprecedented authority to spend
$700 billion over the next 2 years to purchase distressed mortgage-
related assets to provide stability to financial markets and our
banking system. The proposal sought authority, ``without limitation,''
to enter into contracts, to designate financial institutions as
financial agents of the Government, and to establish ``vehicles'' for
purchasing mortgage-related assets and issuing obligations, among other
things. Further, the proposal stipulated that any actions the Secretary
takes ``may not be reviewed by any court of law or any administrative
agency.''
Brevity may indeed be the soul of wit, as Shakespeare wrote in
Hamlet. But it shouldn't be the ``soul'' of a legislative proposal--or
the sole legislative proposal--to shore up a badly faltering economy.
According to the administration, the role for Congress--a coequal
branch of Government--was to authorize the enterprise and then wait for
semi-annual status reports from the Treasury Department. We were also
told to pass it right away, without amendment, because each day we
delayed, the markets would continue to crumble.
The administration wanted a bill to bail out Wall Street; Congress is
poised to pass a bipartisan bill that will protect the American
economy, begin to reform financial practices, and require the strong
oversight that has been so lacking during this administration.
It is our duty to protect the taxpayer, ensure transparency and
accountability in our financial systems, and to make improvements in
their interactions with American taxpayers and the Federal Government.
This bill will provide up to $700 billion to the Secretary of the
Treasury to buy mortgages and other assets that are crippling financial
institutions across the Nation. EESA also establishes a program that
would allow companies to insure their troubled assets.
EESA requires the Treasury to modify troubled loans--many the result
of predatory lending practices--wherever possible to help American
families keep their homes. It also directs other Federal agencies to
modify loans that they own or control. Finally, it improves the HOPE
for Homeowners program by expanding eligibility and increasing the
tools available to the Department of Housing and Urban Development to
help more families keep their homes. I am pleased that this evening
Chairman Dodd and I were able to clarify the authority for Treasury to
purchase low income housing tax credits under this legislation. This
authority will allow Treasury to keep liquidity in the market for these
critical tax credits and thus provide for the continued development of
affordable housing nationwide, at little or no additional cost to
taxpayers. However, I am disappointed that in negotiations, the
President rejected our efforts to provide more extensive help for
homeowners through the bankruptcy courts. With default rates and
foreclosures at the highest levels in our history, I look forward to
the next Congress during which we must do more to protect Americans'
homes.
This bill also requires companies whose assets are purchased by the
government to provide warrants so that
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taxpayers will benefit from any future growth these companies may
experience as a result of participation in this program. The
legislation also requires the President to submit legislation that
would cover taxpayer losses resulting from this program by charging a
broad-based fee on all financial institutions. I am disappointed that
requirement for the financial institutions responsible for these losses
to pay was not included in this legislation.
This bill does include provisions to limit executive compensation.
Executives who made catastrophic decisions should not be allowed to
unload their toxic assets on working American families and still make
high salaries and bonuses. Under this bill, some companies will lose
certain tax benefits for salaries in excess of $500,000 and their
bonuses and so called ``golden parachutes'' will be prohibited for
their top five executives. The bill also requires recovery of bonuses
that are paid based on statements of earnings and gains that are later
proven to be ``materially inaccurate.''
Rather than giving the Treasury all the funds at once, as the
original Bush plan stipulated, this legislation gives the Treasury the
authority to spend $250 billion immediately, and requires the President
to certify that additional funds are needed--$100 billion, then $350
billion subject to Congressional disapproval. The Treasury must report
on the use of the funds and the progress made in addressing the crisis.
I joined Finance Committee Chairman Baucus' push for the creation of
a special inspector general to oversee this effort. The magnitude of
both this bill's pricetag and the task assigned to the Treasury
Department are such that rigorous, independent efforts are necessary to
prevent waste, fraud and abuse. This provision is a necessary element
of the bill, and it will lead to a better, more responsibly executed
program.
Over the past week, as anxiety about our economy has heightened and
banks have collapsed, Americans have begun to openly consider the so-
called ``Serta Option'' for hiding their cash. That's why I am
supportive of the provision added this week to increase temporarily the
FDIC limits from $100,000 to $250,000. It is more important than ever,
during these times of uncertainty, to instill confidence in every
American who has a savings account that their hard-earned deposits are
secure.
As I said at the outset, Americans are angry that we are in this
position. The vast majority of Americans acknowledge that something
must be done. They want action from this Congress, and by last Tuesday
morning, after the largest 1-day point drop ever in the Dow Jones
average, most recognized that our inaction is not an option.
I will vote for this bill, and I urge my colleagues to join me in
answering the call for urgent action. In three short months, the 111th
Congress will convene. I will continue to push for the types of
reassurances that America's communities are looking for, not just those
that our financial markets seek. This is a time of crisis for our
country, but it is also a time of opportunity; an opportunity to ensure
that we never again leave our Nation's families vulnerable to economic
meltdown while corporate executives walk away with millions of dollars;
an opportunity to protect working Americans' investments in their homes
and communities; an opportunity to ensure that small businesses can
access the credit they need to prosper and expand. I ask my colleagues
to join me tonight in this vote, and in January, when we take on the
longer and even more challenging task of getting our country back on
track.
Ms. SNOWE. Mr. President, although long overdue, I am very pleased
that the Senate has incorporated a bipartisan agreement to renew
expiring tax provisions in the Emergency Economic Stabilization Act of
2008. These tax provisions are critical to families across America, and
provide incentives for the production of clean energy and conservation
that could create 100,000 new jobs. As working families are struggling
to put food on the table and gas in their cars, I am especially
grateful that the package assists the least fortunate among us by
including a proposal to lower the income threshold for the refundable
child tax credit that Senator Lincoln and I have championed.
I would especially like to thank Senators Baucus and Grassley as well
as their staffs for working days, nights, and weekends in forging this
agreement. These two leaders exemplify the bipartisan tradition of the
Senate and how this body can get its work done if Members are willing
to reach across the aisle to find the middle ground.
Unfortunately, partisan gridlock too often ties the hands of even
these Senate stalwarts. I find it hard to fathom that, in what could
potentially be the closing hours of this Congress, we are only now
moving a step closer to enacting this legislation. At a time when
renewable energy projects are being mothballed because of this
uncertainty and Americans are demanding action on energy policy, I
cannot believe that we have been abrogating our duty to serve the
American people by our inaction on this time-sensitive issue. It seems
to me that these tax extensions should have been the low-hanging fruit
that we could have done much sooner.
We could have unleashed sooner renewable energy projects creating
jobs, provided targeted tax relief to low-income working families
struggling to pay the high cost of food and fuel, encourage an infusion
of capital into rural and urban communities, provide tax incentives for
retail businesses looking to grow their business, and help keep the
jobs associated with film production within our borders.
This is occurring at a time when our economy teeters on the brink of
recession; when we have seen the collapse of a banking institution
founded in 1850, when the U.S. government has seen no other way but to
take over major financial institutions; when unemployment surged to 6.1
percent last month--the highest rate since 2003; when gasoline at the
pump is near $4 a gallon; when oil costs remain at $100 per barrel; and
when foreclosures have hit historic levels, do we really want to say
that we can't extend a renewable energy tax credit that caused 45
percent growth in wind energy production last year and that we can't
adopt energy efficiency tax credits that create necessary incentives to
reduce energy demand?
Consider the economic impact of inaction. Dr. Mark Cooper of the
Consumer Federation of America estimates that from 2002 to 2008 annual
household expenditures on energy increased from about $2,600 to an
astonishing $5,300! In my state of Maine, where 80 percent of
households use heating oil to get through winter, it's going to be even
worse.
Last year at this time, heating oil prices were at a challenging
$2.70 per gallon--for a Mainer who on average uses 850 gallons of oil,
that is $2,295. With current prices at $3.80 per gallon, the cost per
Mainer to stay warm will be at least $3,230, and that is not even
considering gasoline costs. That is the difference between a burden and
a crisis.
Now is not the time to allow energy efficiency tax incentives and the
renewable production tax credit to expire. But that is what we are
doing unless we pass this bipartisan package today. Energy efficiency
is by far the most effective investment that our country can make to
address the calamity of an absent energy policy. Jerry Howard with the
National Association of Home Builders states:
Our members build homes that are significantly more energy
efficient than those of a generation ago. But in today's
economic climate, home builders need incentives to spur them
to even more action.
It constitutes a dereliction of duty if Congress allows energy
efficiency tax credits to expire. In fact, some tax credits already
have expired, and as a result, there are currently no incentives to
purchase efficient furnaces. At a time when Americans are worried about
paying heating bills this winter, we must provide the assistance to
encourage investment in energy-efficient products that will reduce our
collective demand for energy, and save Americans money.
[[Page 23589]]
Yet we have jettisoned a $300 tax credit to purchase high-efficiency
oil furnaces, which would produce more than $430 in annual savings for
an average home--according to calculations based on Department of
Energy data and recent home heating prices. We have sidelined an
extension of a tax credit for highly efficient natural gas furnaces
that would save an individual $100 per year. However, this tax credit
ended at the beginning of this year--when oil prices began their
historic rise.
That is why it is so critical that the extenders package that earlier
passed the Senate included a significant portion of my EXTEND Act,
which I have championed with Senator Feinstein. This legislation,
supported by a sizeable group of businesses and environmental
advocates, would revolutionize our building infrastructure and save our
country expensive energy. My legislation included a long-term extension
for energy-efficient commercial buildings, as well as an extension for
energy-efficient residential buildings and new homes, investments that
will reduce energy consumption for generations. This legislation would
save our country $25 billion annually in utility bills by 2018.
I also wish to highlight the important provision that provides a tax
credit for biomass stoves, a proposal initially introduced by Senator
Sununu. When the costs of other heating sources are excessively high we
should be providing options to consumers. I look forward to publicizing
this tax credit to ensure that it can be utilized by homeowners this
winter.
And for businesses that are competing against countries that
subsidize oil, the situation is untenable. Earlier this summer,
Katahdin Paper Company in my State announced that the cost of oil used
to operate its boilers has caused the company to consider closing the
mill's doors. Talks are underway to find alternative solutions to
restart the mill's operations and revive its 208 jobs, but it is
undeniable that these jobs hang in the balance because of unprecedented
energy costs.
One remedy would be to create more renewable energy jobs that would
help right a listless economy and boost investment in a secure energy
future. Indeed, more than 100,000 Americans could have been put to work
this year if clean energy production tax credits had been extended. We
earlier could have unleashed renewable energy projects creating jobs,
but instead, projects currently underway may soon be mothballed. Rhone
Resch, president of the Solar Industries Association, says ``It is
scaring away investment, just as our industry is beginning to get a
toehold.'' Can you believe that? We are actually ``scaring away
investment'' during these unprecedented economic times. Gregory
Wetstone of the American Wind Energy Association said recently:
If Congress fails to act, it's a real blow to renewable
energy. It means that fewer wind turbines will be used to
generate pollution-free power in the United States.
Clean energy incentives for energy-efficient buildings, appliances,
and other technologies, as well as additional funding for weatherizing
homes, would similarly serve to stimulate economic activity, reduce
residential energy costs, and generate new manufacturing and
construction jobs. It is irresponsible to allow a bright spot in our
economy, the renewable energy industry and energy efficiency
industries, to falter when the output of these industries is so
essential to the future of this country.
Extending these expiring clean energy tax credits will ensure a
stronger, more stable environment for new investments and ensure
continued robust growth in a bright spot in an otherwise slowing
economy. I am encouraged by the bipartisan agreement that is before us
today. We must not lose yet another opportunity to raise the bar for
future domestic energy systems and energy efficiencies, benefiting our
economy, our health, our environment, and our national security. I hope
that the House of Representatives will quickly take up and pass this
package.
Some may argue this is an election year and we must lower our
expectations for getting things accomplished. I could not disagree
more. And I met a remarkable woman from Maine earlier this year who
could not disagree more--because time is quickly running out on this
Congress to take necessary steps to help Americans like her. She told
me she had three jobs--the first to pay for the mortgage, the second to
pay for heating oil, and the third to pay for gas to be able to drive
to her other two jobs--and this was back in April.
Solving this crisis is not about party labels. It is not about
Republicans or Democrats--or red States or blue States. It is about
what is good for America, and what unites us as Americans under the
red, white, and blue. We must move in that direction as a country.
But, there is much more in this package beyond energy tax incentives.
The legislation before us will extend the New Markets Tax Credit
through 2009. Based on the New Markets Tax Credit Extension Act of
2007, which I introduced with Senator Rockefeller, this provision will
help to ensure that investment dollars continue to flow to underserved
communities.
Additionally, the tax extenders package will enable retailers who own
their properties to depreciate over 15 years, instead of 39 years,
improvements to those structures. Based on my legislation, this Main
Street-friendly provision levels the playing field between owner-
occupied and leased retail space and will help to generate additional
construction and renovations to stores nationwide by lowering the cost
of capital in a tightening credit market.
Also included is a provision that will allow companies to claim
accelerated depreciation for the purchase of recycling equipment. This
provision is based on my Recycling Investment Saves Energy, RISE, Act
and will save energy, create jobs, strengthen local recycling programs,
and improve the quantity and quality of recycled materials.
So as you can see, this package is more than just extending expiring
tax provisions. This legislation will create jobs, move us closer to
energy independence, encourage investment in low-income communities,
and provide much-needed relief to low-income families struggling to
meet basic needs. For these reasons, I strongly urge my colleagues in
the House to swiftly take up this legislation and finally send it to
the President for his signature.
I hope that when the Second Session of the 110th Congress adjourns,
we can say we extended this critical tax package. I would also hope
that at the beginning of next year, when a new Congress is sworn in, we
will commit ourselves to serving those who have entrusted us with their
votes, where reaching across the aisle is the norm, not the exception--
where looking for consensus is viewed as the answer, not an aberration.
Ms. SNOWE. Mr. President, I rise today with respect to the
unprecedented financial rescue legislation that is before us in the
U.S. Senate. And let me begin by first applauding Senator Dodd, Senator
Gregg, Senator Bennett and Senator Corker for their perseverance in
negotiating and developing a package, as well as the Republican and
Democratic leaders' bipartisan work in what are most assuredly the most
difficult of circumstances.
Where we stand today is at the precipice of a financial crisis, the
magnitude of which is already of historic proportions--threatening
future economic growth, jobs for hardworking American families,
retirement savings for our seniors, and the ability of Americans
throughout the country from all walks of life to access credit for
attending college, purchasing a house or automobile, and running their
small businesses. Indeed, the very underpinnings of our economy are
imperiled.
This is where we are. The options we face looking forward are not
ones that any of us here would choose--far from it. The American people
are angry--and I share that anger. Indisputably, the dimensions of
greed that precipitated this crisis are unconscionable and outrageous--
and there should be no debate whatsoever that those responsible must be
held fully accountable.
[[Page 23590]]
The question before us now is, Should the Federal Government
intervene in our financial institutions? Does the current situation's
gravity necessitate an action that would, under almost any other
circumstance, run counter to our fundamental economic tenets? Or do we
allow this current crisis of confidence, liquidity and solvency to
continue, with the attendant fear it perpetuates, undermining the
functional future of our economy? What would be the consequences if we
failed to attempt to stem the financial hemorrhaging when we had the
opportunity to do so, before the sequence of corrosive events truly
becomes unstoppable and irreversible?
So, it is little wonder that people in my home State of Maine and in
every State in the Union are rightly asking, How could this have
happened? How could some possess such a voracious appetite for wealth
combined with a stunning lack of moral fiber that they would so
cavalierly allow their wanton financial wagers to cripple our economy--
to the extent that every American family is now steeped in anxiety and
fear about our future?
And how exactly could nearly $3 trillion worth of toxic financial
securities that were previously rarely used and little known have been
swapped around like betting parlor wagers--with no transparency, no
oversight, and no questions being asked by those who should have an
obligation to do so?
We have already witnessed the dramatic beginnings of the dangerous
tailspin this investment shell game has produced. The recent bankruptcy
of the 158 year old institution Lehman Brothers, the Federal takeovers
of American International Group and Bear Stearns, the implosion of
Fannie Mae and Freddie Mac and their entry into Federal
conservatorship, the $557 billion in losses and write-downs on subprime
investment worldwide, the single largest bank failure in the history of
the United States with Washington Mutual following the collapse of
IndyMac, the firesale of nearly insolvent Wachovia--the fourth largest
bank in the country--to Citigroup all demonstrate the expansive reach
of the crisis. They illustrate at the very least a catastrophic failure
to accurately calculate the risk of these investments and the
resulting, paralyzing lack of confidence and solvency currently
crippling our financial system.
According to Treasury Secretary Henry Paulson, this is the first time
we have ever had the failure of AAA-rated bonds--the most highly rated
bonds outside of Treasury bonds. This is unheard of, and has sent
shockwaves throughout the markets, leading everyone from large
corporations to the retirees living on their interest payments to ask,
what can they trust if they can't trust AAA-rated bonds? But we now
know that many of those bundled, subprime securities were passed-off as
high, investment grade securities when in fact they were anything but.
So we must ask where were the rating agencies in fulfilling their vital
role in accurately identifying these risks?
Moreover, as the instability and loss of value in mortgage securities
has become crushingly apparent, investment firms have now ceased
extending short-term loans to investment banks--which sounded the
ultimate death knell for those firms that have already gone under. And
because subprime assets can no longer be valued or sold, banks continue
to carry these nonperforming loans on their books--and therefore they
cannot move forward in generating the credit that is the lifeblood of
our economic growth.
Small firms--which have generated 60 to 80 percent of net new jobs
annually over the last decade, are finding it difficult to access
credit as existing credit lines are shut down and loans canceled. One
owner of a small firm had his business credit card limit severely
reduced the day before payday. This reduction may force him to
temporarily close his business, leaves him unable to pay his workers,
and in arrears to the IRS for $20,000. Further, the National Small
Business Association just released their findings that, this past
February, 55 percent of small business owners believed their business
had been affected by the credit crunch--and as of August, that number
had jumped to 67 percent.
The crunch is even affecting the ability of States to implement
transportation projects that enhance economic competitiveness and
create jobs--at a time when America is already suffering under a 6.1
percent unemployment rate, with 605,000 jobs so far this year and
another 100,000 estimated lost in September. Last week, incredibly, my
home State of Maine was unable to sell a $50 million, AA-rated
transportation bond because frozen credit left officials with no market
for these bonds. And I am told that when Maine is finally able to issue
the bond, the liquidity crunch will have driven up rates compelling
Maine taxpayers to pay millions of dollars in extra interest payments
on these necessary road projects.
As further evidence our capital markets are clogged, one need look no
further than the London interbank offered rate, LIBOR, which is the
benchmark rate at which banks will loan unsecured funds to one another.
Prior to yesterday, the LIBOR had reached 3.93 percent--near an 8-month
high. Then in the last 24 hours, the LIBOR surged more than four
percentage points to 6.9 percent--to the highest level ever! This is
more than three times the percentage that would prevail under normal
market conditions and means that financial firms are reluctant to lend
to one another under reasonable terms.
Moreover, community banks play an especially important role in
providing credit and capital to small businesses; 48 percent of small
businesses are customers at banks with less than $1 billion in assets.
If the nonperforming loans remain with the community banks, it could
decrease the banking system's lending capacity by as much as $450
billion.
Given what we have already experienced this September--that regular
investors pulled $335 billion out of money market funds, that the cost
of overnight lending between banks jumped 116 percent, that capital has
evaporated, that major banks have failed, that small firms--as well as
large--have been suddenly denied access to existing credit lines, never
mind new loans--that on this Monday alone the U.S. stock markets lost
$1.2 trillion, it is difficult to conclude there won't be serious and
systemic consequences for our economy--for household finances, for
American jobs--when the full impact of this meltdown truly manifests
itself and we face the imminent threat of a severe recession.
And so we return to the original and central question--are
circumstances compelling enough to warrant government intervention?
Regrettably, given this travesty of unfathomable proportions for
American taypayers and families, they are. In the words of Treasury
Secretary Paulson:
These illiquid assets are clogging up our financial system,
and undermining the strength of our otherwise sound financial
institutions. As a result, Americans' personal savings are
threatened, and the ability of consumers and businesses to
borrow and finance spending, investment, and job creation has
been disrupted. To restore confidence in our markets and our
financial institutions, so they can fuel continued growth and
prosperity, we must address the underlying problem.
And Federal Reserve Chairman Ben Bernanke has warned:
This is the most significant financial crisis of the
postwar period.
When our government's financial leadership employs words such as
``undermining,'' ``threatening,'' ``most significant financial
crisis,'' it must be considered with the utmost seriousness that it is
time to move from the ad hoc approach of assisting companies only at
the point they are failing and act prescriptively, now, to stem the
tide of a looming financial meltdown.
I well recall the savings and loans crisis, from when I served in the
U.S. House of Representatives. During that time, 747 savings and loan
institutions went bankrupt, leading to the loss of $160.1 billion in
depositor assets. Yet it was only after these failures that Congress
finally established, in 1989, the Resolution Trust Corporation to sell
off assets of these already failed financial institutions. Today, it is
imperative we act before a similar but far more pervasive cascade of
financial
[[Page 23591]]
failures paralyses our markets and destroys the value of $5.6 trillion
in retirement and private pension investments that are imperiled by
this ongoing market turmoil.
Again, I commend the tireless work of Senators Dodd and Gregg for
crafting legislation that ensures that this rescue process will not be
open-ended, ambiguous, or unfettered for placing taxpayers front and
center for repayment and building in strong taxpayer protections
throughout the proposal, for clamping down on executive compensation
with tough restrictions that will prevent corporate managers from
profiting on the backs of taxpayers for providing necessary, timely,
and crucial mortgage relief to families facing foreclosure, for calming
banks and depositors by increasing deposit insurance to $250,000, and
by including the extension of critical tax incentives and a patch for
the alternative minimum tax to ensure millions of middle-class American
taxpayers do not fall victim to this onerous levy.
With the passage of this legislation comes the forceful
responsibility to recover all of the costs of this program for
taxpayers. To fulfill this mandate taxpayers are given an ownership
stake in participating companies which ensures they will be first to
profit when these companies recover. If, after 5 years, taxpayers have
not been made whole, for the costs of this rescue, the President is
required to act to recoup any shortfall from the companies which
benefited from the Treasury's actions.
Importantly, in addition to provisions limiting executive
compensation, are measures addressing so-called retirement ``golden
parachutes,'' payments that are often extremely generous and
disconnected from performance. Under this bill, for participating
financial institutions, the Secretary of the Treasury would be
empowered to set compensation standards to exclude incentives for
excessive risk taking, recover bonuses paid based on inaccurate
earnings statements; and prohibit future golden parachute payments. For
companies selling more than $300 million of the toxic securities to the
government, tax deductible executive compensation would be limited.
To guarantee strong and comprehensive oversight, I supported
provisions championed by Senators Baucus and Grassley to establish an
independent inspector general that will focus solely on the Treasury's
purchase and sale of illiquid assets. I also championed the inclusion
of provisions that require Federal agencies to cooperate with the
Federal Bureau of Investigations to investigate fraud,
misrepresentation, and malfeasance with respect to development,
advertising, and sale of the financial products which created this
systemic crisis. This became section 127 of the bill.
Passing this legislation--to stabilize markets and restore American's
confidence in their financial firms in order to return to the normalcy
necessary for credit and commercial activity to revive--must be the
first phase of our action to restore the system for American taxpayers,
but it can by no means be the last.
The second phase of our obligation is for Congress to demand
accountability for the massive malfeasance that has been perpetrated on
the American people. The congressional pursuit--through hearings that
Senator Dodd has indicated he will hold--must occur in tandem with the
legal investigation and prosecution of those responsible for this
meltdown. Both must receive the same rigorous attention we have applied
to this rescue package--and not subsumed by the routine of day-to-day
legislative process moving forward.
Therefore, I will introduce legislation to form a dedicated office
within the Justice Department whose sole mission is to ferret out the
rout causes of this catastrophe and bring to account those who are
criminally responsible for bringing our financial system to its knees.
It would be inconceivable to me to devote anything less than 100
percent of our resources to investigating those responsible for this
crisis. No one should reap rewards from this colossal failure. And
frankly, any Wall Street individual who is found criminally responsible
must follow the Enron executives to prison!
Finally, as the third phase of congressional action, as we have an
iron-clad obligation to ensure that this calamity is never repeated, we
are required to reform and rebuild our financial regulatory structure.
Congress must demand the restoration of accountability and transparency
from all of our financial products, including complex securities such
as mortgage backed investments or credit default swaps, whose risk
characteristics largely have been black boxes in the past. It is
essential that people must know--and the federal government is aware
of--the level of financial risks that companies are taking. We must
understand whether firms are creating systemic risks that could
undermine the foundations of our financial system.
It is essential we must utilize the remainder of this year to develop
the fundamental reforms necessary to fix this systemic problem. Again,
Senator Dodd has announced hearings over the next couple of months to
examine the root causes of this catastrophe. Congress must also
consider all proposals for reform, such as the ``Blueprint for a
Modernized Regulatory Structure'' that Treasury Secretary Hank Paulson
put forward in March. As Secretary Paulson's plan concludes, ``the
existing functional regulatory framework no longer provides efficient
and effective safeguards against poor prudential behaviour of financial
services firms.''
Indeed, as we have unmistakably learned, the current regulatory
structure, which has been largely knitted together over the past 75
years, can not protect us from the type of systemic risks that are
ravaging our financial markets and economy. Financial institutions have
developed products and complex risk-hedging strategies that today's
regulatory structure has failed to properly evaluate and oversee--with
disastrous results. We can never again allow the U.S. financial
industry to act with impunity, and make the highly speculative
investments that have today put in jeopardy the health, stability, and
growth of our economy.
The bottom line is that we do not have a moment to lose in developing
a regulatory oversight structure that keeps pace with whatever new
financial instruments may be developed in the future. We can never
again find ourselves in the position of having to vote for another
financial rescue package. Instead, we must take the weeks ahead to
draft bipartisan and bicameral legislation to eliminate systemic risk
in financial markets and protect our economy over the long term.
Mr. GRASSLEY. Mr. President, this Congress is on the cusp of making
an extremely difficult decision that will not only affect our financial
markets in the near term, but it will also leave a lasting footprint on
the direction of the our economy for years to come.
We face an unprecedented economic challenge--failing banks, declining
credit, rising unemployment, and a likely recession. These problems
have led us to the point of placing hundreds of billions of taxpayer
dollars at risk to purchase risky subprime mortgages in an effort to
avoid, or lessen the impact of these looming problems. Allow me to
discuss a few of the factors that led us to where we are today.
In response to the high-tech, dot-com bust in 2000, the Federal
Reserve began a series of interest rate cuts reducing the Fed Funds
rate from 6.5 percent to 1.0 percent. The rate averaged 1.4 percent
from 2002 through 2004.
As cheap credit flooded the markets, financial institutions borrowed
money at low short-term rates and invested at higher long-term rates--
playing the spread. They adopted reckless lending practices under the
political banner of increasing homeownership. These practices included
``liar loans,'' i.e. no credit check, no-money down, interest-only,
negative amortization, i.e. missed payments are added to the principal,
adjustable-rates, and balloon payments.
As these risky loans were extended to marginal borrowers who could
not afford their overpriced homes, the financial wizards on Wall Street
devised schemes to theoretically insure themselves against default.
These so called
[[Page 23592]]
``credit default swaps'' allowed investors who purchased mortgage-
backed securities to pay fees to underwriters, like AIG, in exchange
for a promise to cover any losses. However, the underwriters often
failed to acquire and maintain adequate reserves to cover such losses.
There is plenty of blame to go around for getting us into this mess.
But the financial problems we face are much bigger and more fundamental
than the home mortgage market itself.
Our financial system is based on the fundamentally unstable practice
of maturity transformation--more commonly known as borrowing short and
lending long.
The consequences of this practice are illustrated in the classic
movie ``It's a Wonderful Life.'' In this movie, Jimmy Stewart plays the
owner of the Bailey Building and Loan Association. In the wake of the
Great Depression, the citizens of Bedford Falls panic and begin a run
on his bank. Stewart's character explains that he does not have their
money, but rather it has been used to build their homes. He asks them
to be patient, and they will eventually get their money back. But they
persist. He ultimately stops the run by convincing them to take only
what they need right away. He uses his own money that he was saving for
his honeymoon to repay his customers.
The scene from this movie illustrates the fundamental instability of
our current financial system. We operate under the illusion that we can
deposit our money in a bank and then withdraw it anytime we choose. But
at the same time we expect the bank to pay us interest on our deposits.
However, the interest we receive can only be achieved by giving our
money to someone else to invest for weeks, or months, or years.
Maturity transformation works only as long as people have confidence
in our banking system. Federal deposit insurance was created to instill
this confidence. By having the Government stand behind our banks ready
to provide the cash necessary to repay our deposits, there is no reason
to have a run on a bank. Moreover, if there is a run, banking
regulators can swiftly close down the failed bank, or orchestrate a
takeover by a healthier bank, and promptly resolve the problem.
Deposit insurance is not a perfect system, as we learned from the
savings and loan fiasco in the late 80s and early 90s. Deposit
insurance creates moral hazard. Because depositors are protected from
their bank's failure, they have no incentive to question the reckless
lending practices of their bank. Without adequate oversight, risk-based
premiums, and adequate capital requirements, deposit insurance is
unsustainable in the long run.
The current home mortgage mess is merely an extension of the maturity
transformation and moral hazard problem. But in this case, instead of
depositors and deposit insurance, we have overnight loans and too-big-
to-fail institutions.
Essentially what happened is Wall Street created an alternate banking
system in which participants loaned each other money overnight and
invested in mortgage backed securities. They treated their overnight
loans as deposits, and they relied on the widely-held belief that once
their activities reached critical mass, they would be too-big-to-fail
and the Government would bail them all out if anything went wrong.
This financial house of cards collapsed as home prices began to fall
and default rates began to rise. At that point, investors became
unwilling to rollover their overnight loans. Participants began to
suggest there was not enough liquidity. That is a fancy way of saying
investors were no longer willing to lend money overnight to buy long-
term assets that were declining in value.
So what is the solution?
Last week, the President asked Congress to enact legislation to
address this problem. The original plan proposed by Treasury Secretary
Paulson would have authorized the Government to buy $700 billion in
mortgage-related assets. By taking these troubled assets off the books
of financial institutions, it was hoped the government could stabilize
falling asset prices and restore investor confidence. Since this plan
was first proposed, improvements have been made.
The bill we are considering isn't perfect. Like my constituents, I am
outraged that we are in this position today. But the fact is, we are
facing a global economic meltdown. Irresponsible lenders and greedy
investors have put small businesses, farmers, and families at risk.
While many in Iowa may not yet see the effects, our inaction will lead
them to understand how dire this problem truly is. We must unfreeze the
financial markets as soon as we can, and this is the only solution on
the table that will come close to working. We can't guarantee to the
taxpayers that this solution will work. What we can say is that we are
doing the best we can, representing our constituents the best we can,
and trying to solve the problem before the American people really have
to suffer the consequences.
What I have come to learn is that the credit crunch doesn't just
impact Wall Street. Our economy depends on America's small businesses.
We are nine meals away from a revolution, making the farmer an integral
part of our country's survival. But farmers and businesses are at risk.
Parents who are hoping to send their children to college may not get
the loans they need. Individuals that need loans to purchase autos or
homes may be left without a ride to their workplace or a roof over
their head. There is a trickle-down effect that is sure to be felt if
Congress sidelines this bill today.
Since Congress was urged to act, I have stated--in public and private
sessions--that there are core principles that must be addressed before
I would vote for the bill. I wanted to see strong oversight of the
program, including an independent inspector general. I wanted strict
executive compensation restrictions for CEOs that got us in this mess.
I wanted those who are responsible to give up their pin-striped suits
for orange jump suits and to be held accountable. I wanted assurances
that the Government would take equity in the firms we bail out. The
bill, unlike the original Treasury proposal, includes the core
principles I wanted to see. This bill is an improvement from the
Treasury plan because there is transparency, oversight, and more
protections for taxpayers.
One of the duties I take most seriously as a U.S. Senator is
overseeing the policies and activities of the Federal Government.
Government must have its checks and balances in place to prevent waste,
fraud, and abuse by bureaucrats in Washington. I have been the chief
supporter of inspectors general at Federal agencies, and making sure
they remain independent overseers of taxpayer dollars. The proposal
brought forward by the Secretary of the Treasury failed to include any
oversight. Because the emergency plan is sure to be one of the most
complex and difficult tasks ever undertaken, I pushed the leaders in
the House and Senate to include a special inspector general to monitor
the activities of the Treasury Department and its contractors. Timely,
comprehensive and truly independent reporting is critical to these
oversight efforts.
I am glad oversight was included in this bill. Not only will there be
a special inspector general, but we will also have a financial
stability oversight board responsible for reviewing the exercise of
authority under the program, including the review of policies and
making recommendations to the Secretary. Additionally, there is
established a congressional oversight panel to review the current state
of the financial markets and the regulatory system. This panel will be
independent, tasked with reviewing the administration of the program.
They will also study the effectiveness of foreclosure mitigation
efforts and the effectiveness of the program from the standpoint of
minimizing long-term costs to the taxpayers.
Despite these oversight boards and panels, you can be sure that I
will not let up on my efforts to reign in fraud, abuse and misconduct.
I will not tolerate bureaucrats taking advantage of taxpayer money, and
will do my best to
[[Page 23593]]
make sure heads roll if conflicts of interests by those who run the
program are suspected.
Like all Iowans, I am concerned about the risk that this plan places
on hard working and responsible taxpayers. Since we began discussing
this plan, using taxpayer dollars responsibly has been the top
priority. That's why many taxpayer protections were added to the bill.
Treasury's proposal had minimal oversight to protect taxpayer
dollars. Like I said earlier, this compromise enhances the oversight
structure by creating a financial stability oversight board, a special
inspector general, and a congressional oversight panel. It also
requires the Secretary to develop regulations and guidelines necessary
to prohibit or, in specific cases, manage any conflicts of interest
with respect to contractors, advisors, and asset managers.
The Secretary also has to take steps to prevent ``unjust
enrichment''--or paying more for a troubled asset than what the seller
paid to purchase it. The Secretary--in considering the purchase of
troubled assets--must take into account the ``long term viability'' of
the financial institution. The bill requires Treasury to take an equity
stake in the companies from which it purchases troubled assets. And it
requires the Treasury Department to be transparent when they buy and
sell. In fact, they must post, within 2 days, the purchases, amounts,
and pricing of assets acquired. These provisions will help shield
taxpayers from losses and may provide taxpayers with potential future
benefits.
Should taxpayers lose out, the bill allows the government to go back
after 5 years to recoup losses from financial companies. The Office of
Management and Budget and the Congressional Budget Office will report
on the net amount lost in the TARP after 5 years. The Government can
assess a fee on companies that use TARP to make sure taxpayers don't
lose out in the long run.
I am also glad that the final bill does not siphon profits from the
program for an existing housing trust fund, as was proposed by the
other side of the aisle. I firmly believe that all proceeds of sales
must go to the Treasury and back to the taxpayers.
Taxpayers are protected because the final bill doesn't provide $700
billion upfront. The Administration originally wanted the authority to
have it all at once, but this bill provides for the program to be
implemented in stages. Only $250 billion will be provided immediately,
and another $100 billion will be provided upon a written certification
of need by the President. Finally, the remaining $350 billion will be
provided unless Congress acts. Let's be clear. Congress can act anytime
to revoke the Treasury's authority. They will be watched, and they will
be questioned. And if Congress doesn't like what it sees, we can repeal
this economic stabilization plan.
Finally, this bill provides for an increase in the deposit insurance
cap through the Federal Deposit Insurance Corporation. The last time we
increased the level was in 1980. The provision temporarily increases
from $100,000 to $250,000 the amount of deposit coverage for banks and
share coverage for credit unions. The coverage amount reverts back to
$100,000 after December 31, 2009. The bill that was voted on by the
House did not include this provision, which is an added protection for
American families and businesses.
I am supportive of a provision in the bill to modify the tax
treatment for banks holding preferred stock in Fannie Mae and Freddie
Mac. The proposal would allow banks to treat gains and losses on Fannie
Mae and Freddie Mac preferred stock as ordinary, instead of as capital,
for tax purposes.
I have heard this relief is important for a number of Iowa community
banks. These banks were permitted and even encouraged to hold these
investments. These investments were believed to be safe. They had the
backing of the Federal Government and provided reliable revenue streams
through quarterly dividends.
In the wake of Treasury's acquisition of close to 80 percent of
Fannie Mae and Freddie Mac, these preferred shares became virtually
worthless. These small banks generally don't have capital gains.
Accordingly, without this provision, they would not be able to
recognize a tax deduction for their losses. This provision will help
community banks satisfy their regulatory capital standards in order to
continue to lend and support economic activity and growth in their
local communities.
This legislation includes limits on executive compensation. I will be
honest: I wish the executive compensation limitations were stronger.
However, the limitations included in the bill are a step in the right
direction. Why? Because those executives that got us into this mess
should not be able to walk away from the institution that they ran with
oodles of money. Not only should they be prohibited from walking away
with oodles of money, they should go before the board of directors--
before the public--and before the stockholders and bow deeply and
apologize for their mismanagement. Like the Japanese do. But I will say
this--I will take what I can get, and I will look forward to taking a
closer look at excessive executive compensation in the next Congress.
Despite my reluctant support for this bill, I remain concerned about
the lack of provisions that will bring about long-term changes to our
financial health. I would have liked to see language to address the
underlying problems that led us to this emergency relief bill. However,
I realize this situation calls for an emergency reaction, and we must
temporarily forego consideration of provisions that would beef up the
securities markets, and toughen regulations for companies that do
business on Wall Street.
Take hedge funds, for example. Two years ago, I started conducting
oversight of the Securities and Exchange Commission in response to a
whistleblower who came to my office complaining that SEC supervisors
were pulling their punches in their investigation of a major hedge
fund. Nearly a year and a half ago, I came to this floor to introduce
an important piece of legislation based on what I learned from my
oversight. The bill was aimed at closing a loophole in our securities
laws. In light of the current instability in our financial system, I
think it is critical that Senators take another look at this bill. It
is S. 1402 the The Hedge Fund Registration Act. It is pretty simple,
only two pages long. All it does is clarify that the Securities and
Exchange Commission has the authority to require hedge funds to
register, so the Government knows who they are and what they're doing.
Given the SEC's current attempts to halt manipulative short selling
and other transactions by hedge funds that threaten the stability of
our markets, I am disappointed that the Senate did not adopt this
legislation long ago. If it had, then the SEC might have more of the
tools it needs now in these nervous markets.
One major cause of the current crisis is a lack of transparency.
Markets need a free flow of information to function properly.
Transparency was the focus of our system of securities regulations
adopted in the 1930's. Unfortunately, over time, the wizards on Wall
Street figured out a million clever ways to avoid transparency. The
result is the confusion and uncertainty fueling the crisis we see
today. This bill would have been one important step toward greater
transparency on Wall Street, but so far it has been a lonely effort on
my part.
Another problem in bringing about transparency in the market is the
notion of suspending mark-to-market Rules. Mark-to-market accounting
requires entities to calculate fair market value by estimating the
price that would be received for that asset in an orderly transaction
occurring on a specific date, i.e. willing buyer-willing seller.
Contrary to public perception, the mark-to-market rule is not new.
Other existing accounting standards have and continue to require
certain assets to be written down if the asset value falls below cost.
This is often referred to ``lower of cost or market''. Under mark-to-
market, assets are required to reflect fair market value so
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they are measured above cost or below cost depending on market
conditions. According to the Center for Audit Quality, an autonomous
public policy organization affiliated with the American Institute of
Certified Public Accountants, AICPA,``suspending mark-to-market
accounting would throw financial accounting back to a time of less
comparability, less consistency and less transparency''. This position
is supported by the Council of Institutional Investors and the CFA
Institute. The chairman of the Financial Accounting Standards Board
said it best when he said ``the harsh reality is that we can't just
suspend or modify the financial reporting rules when there is bad
news.''
I hope Congress will consider these key statutory changes that are
needed when we return early next year.
Aside from the economic stabilization plan that we are voting on
today, we are again discussing legislation designed in part to deal
with time-sensitive tax matters. I strongly support this part of the
package.
These identical AMT relief, disaster tax relief, and individual,
business, and energy tax extender provisions were passed by the Senate
by an overwhelming vote of 93-2 just last week. There are five
categories of tax relief provided in the bill. The first one is the AMT
patch. It expired on December 31 of last year. If we don't act, 24
million families will face an average tax increase of at least $2,000
each.
The second category of tax relief includes several tax benefits
available to middle income taxpayers. They expired on December 31 of
last year.
Included are deductions for out-of-pocket expenses for teachers,
sales tax, and college tuition. Millions of taxpaying families would
face an unexpected tax increase.
The third category consists of many valuable business incentives,
like the research and development tax credit, that likewise expired.
In this time of high oil prices and instability in the energy
markets, Congress should send a clear signal in support of alternative
energy and conservation. This is the fourth category. We will not let
the wide assortment of tax incentives for alternative energy and
conservation expire this year.
The fifth and final category deals with disasters that have ravaged
the Nation's heartland and the gulf coast. We need to respond to the
folks in those regions, including my home State of Iowa.
This is must-do business. Congress cannot dawdle any longer. With a
sense of urgency, Senators Reid and McConnell have devised a path for
the Senate to complete action on these provisions. I would have rather
processed this time-sensitive business several months ago, but better
late than never.
Our leaders provided Chairman Baucus and me with the authority to
make the deal. That was the critical step. I pulled out my notepad and
resharpened my pencil. Chairman Baucus did the same thing. We have a
bipartisan deal evidenced by our 93-2 vote last week.
Last year, I laid out the principles Senate Republicans would follow
when it came to revenue raisers. The first principle would be whether
the proposal is good tax policy. If the proposal is good tax policy,
then we would support and vice-versa. This compromise meets that
principle.
The crackdown on offshore deferred compensation plans is appropriate
tax policy. I am pleased that we made it tougher on hedge fund managers
by removing a charitable loophole. Likewise, the offsets in the energy
portion of the bill are appropriate policy.
The second principle deals with how revenue raisers are accounted
for. This is where the parties differ. How do they differ? Republicans
don't want to go down the slippery slope of building in a bias towards
tax increases and against current law tax relief. This is especially
compelling when appropriations are wholly outside the Democratic
version of pay-go. Likewise, $1.2 trillion of expiring entitlement
spending does not figure into pay-go. The Democratic version of pay-go
sets us down an irreversible path of higher taxes and higher spending.
If expiring tax relief and expiring spending and appropriations were
treated similarly, maybe the deficit reduction rationale behind pay-go
would be somewhat credible. As it exists now, it only reinforces an
ideology of higher taxes and spending. The rejection of Senator
McConnell's deficit neutral offer on AMT and extenders proves my point.
In any event, we found ourselves at an impasse. Democrats insisted on
offsetting current law tax relief and Republicans resisted more tax and
spend. Republicans were willing to use revenue raisers for new policy
and for long-term or permanent tax policy. Republicans did not want to
use revenue raisers for new spending.
We came to a compromise by looking at this impasse as a kind of
prism. A prism breaks one beam of light into several different shades.
Each side can look at the different shades of the prism from their own
viewpoint and see that their principles were upheld.
At the end of the day, we will have an AMT patch, extenders, energy,
and disaster relief package that is a compromise. Republicans will see
that the compromise meets their principles. The offsets are good
policy. From a Republicans standpoint, there is enough new policy in
the energy part of the deal to tie the non-energy offsets. Otherwise,
energy incentives are reformed. Republicans can see that the biggest
item in the bill, the AMT patch is not offset. That preserves our point
that the unfair AMT should not be a reason to raise taxes on other
taxpayers. Likewise, there is enough new and modified policy to tie to
the offshore deferred compensation revenue. Bottom line is that the
leaders were able to secure a longer term extension of current policy
as well with the revenue.
Democrats are able to see the offset policy from their standpoint.
Democrats wanted significant revenue raisers and they got them. Both
sides wanted the underlying revenue losing extensions and new policy.
Most prisms are delicate and transitory. This one is no different.
Our friends in the House need to see that. They can break this fragile
prism. The shards will cut millions of taxpaying families.
This deal defers the very vital debate between Republicans and
Democrats on whether we tax our way out of this fiscal situation, the
Democratic view. Or do we restrain spending, the Republican view.
That important debate, which has held us up for so long, is deferred
to another day.
Each side holds to its principles. Each side does the Peoples
Business. I thank Chairman Baucus and the leaders on both sides.
The tax provisions of this bill present the opportunity to preserve
tax relief for millions of middle income families.
I would like to end by saying that I reluctantly support this bill.
Again, I am outraged that Congress is in this position to relieve Wall
Street and our financial industry. But, unfortunately, this is the hand
we have been dealt and the options we have are limited.
I know people in Iowa are opposed to this bill. They would rather see
companies fail than to have their dollars used to bail them out of this
mess. My vote for this bill is not easy because I respect those
concerns, and I agree with them. At the same time, this legislation is
the best opportunity we have today to avoid a credit crunch that might
cripple our economy. No doubt credit will be tighter with or without
this bill as the system becomes more cautious after acting too fast and
loose for too long. The argument for this bill is that by unplugging
the pipeline that is clogged up with bad debt, good credit can flow.
The U.S. Treasury can hold all that bad debt until its value returns
with the goal of having the taxpayers recover some of the money, and
possibly a great deal of the money, that's being committed with this
legislation.
I have to vote in favor of this plan because I want to protect the
people back home from what is coming their way if we don't act. I hope
my constituents will understand why I feel the need to support this
bill.
Mr. NELSON of Nebraska. Mr. President, I rise today to express my
anger and frustration, and the downright outrage of many of my
constituents, about the legislation the Senate is about to
[[Page 23595]]
consider. The average American taxpayers did nothing to create this
crisis, yet they will be asked to bear the heavy expense of government
intervention to avoid further harm to our financial system. The
recklessness, greed, and lack of foresight on Wall Street have brought
us to the brink of a crisis that threatens our entire economy. The
outpouring of opposition to this legislation that I have received over
the past week in my office is genuine, and it is justified.
However, as elected leaders, we must not lose sight of the dire
situation we face as a nation, regardless of how we feel about it. Many
of my constituents oppose a ``bailout'' of Wall Street, and rightfully
so. But this legislation is more than that. I am not sympathetic to
Wall Street. If the financial crisis we are facing ended with them, I
would say ``write off your losses, you deserve it.'' But unfortunately,
our economy lies at the intersection of Main Street and Wall Street. We
depend on a free flow of credit to keep our businesses running, to
reverse rising unemployment, and repair our economy so it can once
again work for the middle class. Wall Street's mismanagement now
threatens the availability of credit on every Main Street throughout
our country.
Among the many letters I received during this crisis, some have stood
out and articulated far better than I can the reasons why the Senate
must act, even though many of us would rather not. For example, Joe
Masek, who runs a small business in Gering, NE--the Masek Golf Car
Company--recently wrote to me. Masek's employs 32 people and needs to
have credit to pay the employees and finance materials from the time
they manufacture their product to when the products are sold.
Here are Mr. Masek's concerns, in his own words:
If I go to the bank to draw on that line, and they are
forced to tell me that funds are not available because the
credit markets are not working, then I have to cancel two
contracts with two Colorado golf courses that are depending
on me to do what I committed to do. I can see that it would
then not take long for our business to collapse. We are now
up to employing 32 people, all of whom are paying mortgages
and rent and taxes, and putting money aside for retirement in
the 401k, etc. Our collapse and thousands of companies like
us would ``really'' collapse the entire economy . . . . all
for the lack of credit availability which should not be a
problem. Yes there are flaws in the ``big bailout'' but we
would rather live with some flaws than go out of business.
You need to get this one fixed, and not wait until the
election to do it.
Credit is crucial to our families, businesses, local governments, and
other institutions such as hospitals and schools. We need credit to buy
homes, receive student loans, to continue using credit cards for
everyday purchases, for small businesses to obtain operating loans to
carry them from one season to the next, for farmers to get all of the
fertilizer, seed and other materials needed to plant crops, and for
cities and towns to meet payroll.
For the reasons above, and for all the Joe Maseks in Nebraska and
around the country, I intend to cast my vote for the Emergency Economic
Stabilization Act. But I want to be very clear that I would have been
the first in line to oppose the administration's initial ``blank check
proposal.''
I wish to thank my colleague, Chairman Dodd, for leading the effort
to address major flaws in the administration's proposal. Nine days ago,
after first reviewing the administration's initial proposal, I wrote to
Chairman Dodd to outline the changes that I demanded if I were to be
expected to support this bill. I ask unanimous consent to have printed
in the Record the full text of my letter following these remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. NELSON of Nebraska. To briefly summarize, I said that the
taxpayer should come first, and all the proceeds of this program be
used to retire the public debt. I said there could be no free rides for
these institutions--that CEO compensation must be addressed to
eliminate taxpayer-subsidized golden parachutes, and that participation
in the program should require an equity or debt stake so the taxpayer
can share in future profits of the firms that benefit. I said there
should be shared responsibility with the rest of the world, and shared
benefit between the holders of securities and the borrowers struggling
to stay out of foreclosure. I demanded full congressional and legal
oversight of the program. These changes were included in the proposal
before the Senate today. I am still not eager to support this
legislation, but these essential provisions were necessary steps to
protect the American taxpayer's interests.
In addition, I called for, and this bill adopts, an incremental
approach to the authority to purchase troubled assets. This approach is
necessary so that Congress, as we conduct oversight and monitor every
action the Treasury department takes with the authority granted them
under this legislation, can further protect the taxpayer by cutting off
the funds for this program, either if it is not working as we intended,
or if the problem can be solved with fewer funds than the total
authorized.
When Congress passes this bill, responsibility will fall first to the
Treasury Department to make it work. Wise and careful judgment must be
exercised by the Treasury Department to try to earn back every taxpayer
dollar extended in the effort to shore up our financial system. The
burden is on them.
Furthermore, when the Congress passes this bill, our work will not be
finished. No, our work is just beginning because not only do we need to
conduct vigorous oversight of the unprecedented authority we are
granting the Treasury, we need to take a comprehensive approach to
rewriting the regulations of our financial sector to insure that we
never face this choice again.
If we can move ahead to protect our economy, the next President must
change the way Government keeps an eye on Wall Street--for consumer
protection. For years, this administration gambled that ``look the
other way'' regulation would lead to prosperity, and we see where that
got us--mired in a global economic crisis. Having been both a regulator
and someone who worked in the industry I used to regulate, I know
first-hand the importance of regulation. And I know first-hand that the
free market can function prosperously in an appropriately regulated
environment.
The next President must end the ``culture of complacency'' allowed to
grow in recent years. Obviously, better regulation needs to be imposed.
That may take additional legislation, but it is certainly going to mean
that the regulations that are already in place are enforced, and that
the Federal regulators must get off the sidelines and do a better job.
The bottom line is that this financial crisis was avoidable. I hope the
next President, whoever he is, will take corrective action to reform
these Federal agencies so we can avoid future crises.
In conclusion, I will reluctantly cast my vote for this legislation.
I do not do this for Wall Street, but rather for Main Street because of
the fundamental truth that the fate of our financial system and the
fate of our hometown economic prosperity are inexorably linked. I will
support the administration's proposal, with the improvements made by
Congress. Only time will tell whether this can avert the crisis we all
fear, but the risk of inaction is too great. The people of Nebraska
sent me here to make difficult choices, and this is among the most
difficult I have made or will make. I want them to know that I share
their frustration and anger, but when the day is done, I have to do
what I feel is necessary to protect and promote the prosperity of the
American economy, from McCook to Madison Avenue, and back again.
Exhibit 1
September 22, 2008.
Hon. Christopher J. Dodd,
Chairman, Committee on Banking, Housing, and Urban Affairs;
Hon. Richard C. Shelby,
Ranking Member, Committee on Banking, Housing, and Urban
Affairs.
Dear Chairman Dodd and Ranking Member Shelby: As the
Committee on Banking, Housing, and Urban Affairs responds to
the legislative proposal by the U.S. Department
[[Page 23596]]
of the Treasury for a bailout plan, I write to voice my
serious concerns, as well as those of my constituents. The
American taxpayers did nothing to create this crisis, yet
they will be asked to bear the heavy expense of government
intervention. While my Nebraska constituents understand that
the cost of inaction may well be greater than the cost of
this $700 billion proposal, they rightfully demand strong
protection of the taxpayers' investment, together with
accountability, shared responsibility and benefit, and strong
oversight.
The initial proposal delivered by Treasury raises some
serious questions, as it amounts to a ``blank check'' for the
largest ever government intervention in the private markets.
If my constituents are to be expected to finance this
program, significant changes should be made to this
legislation and to regulation and oversight of Wall Street,
so that this chapter of history never repeats itself. On
behalf of Nebraska taxpayers, I urge you to consider the
following as you draft this historic legislation.
First, it is the responsibility of Congress to ensure that
the federal government's actions reflect the taxpayers' best
interests. If taxpayers are to be expected to finance this
bailout effort, changes should be considered to protect that
investment and to ensure that all profits of this program are
returned to the taxpayer. Net proceeds of this program should
accrue foremost to retirement of the public debt.
Second, this cannot be a free ride for reckless financial
institutions; the assistance offered to troubled firms should
operate as much like a loan as possible while still achieving
the necessary effect of calming the crisis. The program
should require participating firms to issue ownership shares
or collateral to the U.S. Treasury in exchange for
assistance. Our responsibility to the taxpayer demands as
much. Future generations should not bear the cost of Wall
Street's failures, and the cost of this program should be
shared with those who participate in it. There should be no
golden parachutes for the executives who presided over these
distressed firms, and any plan should include limits on
executive compensation.
Furthermore, the benefit of this program should not accrue
solely to the holders of distressed assets. The legislation
should reflect that the root cause of this crisis is rising
foreclosures and dropping home values; and to the extent that
assets owned or held by the government can be increased in
value by assistance to homeowners, that approach should be
accommodated by this legislation. In other words, we should
not rescue Wall Street from itself without a strong
commitment to America's Main Streets, in my home state of
Nebraska and throughout our great nation.
Third, there should be shared responsibility with other
countries, particularly regarding foreign financial interest.
The U.S. government's actions are intended to control a
deepening global financial crisis, yet the cost will all be
borne at home by American taxpayers. Other nations should
share in this effort if their financial institutions hope to
benefit from this program.
Finally, Congressional and legal oversight of this asset
purchase program must be strengthened. Reports to Congress
should come more frequently than twice yearly, and the
reporting requirement should stand for as long as any
mortgage-related assets remain in the Treasury Department's
possession. The Government Accountability Office should have
full and unfettered access to all aspects of the program,
because taxpayers demand transparency and accountability if
they are to be expected to finance this program.
Congress faces unattractive options for addressing this
unprecedented problem. If we are to ask American taxpayers to
bear this heavy burden, we must craft a responsible solution
to this crisis, one worthy of the taxpayer's investment. I
ask you to address the principles I outlined above to ensure
that Main Street is not forgotten in any bailout of Wall
Street.
Thank you for your consideration. I look forward to working
with you and our colleagues in the Senate to address this
crisis.
Sincerely,
E. Benjamin Nelson,
U.S. Senator.
Mr. LEAHY. Mr. President, this financial crisis is rooted in material
actions involving executive greed and ineptitude, flawed economic
policies, and the incompetence of on-the-scene regulatory agencies. And
we are dealing with this crisis at the unfortunate intersection of two
toxic trends: the loss of confidence in our financial system, and the
public's loss of confidence in the Bush administration. Many have come
to agree with those of us who have long felt that ``trust me'' is not
enough when this White House asks for sweeping new powers.
As this crisis spreads, threatening to harm our families, businesses
and communities, the clock has been running out on the Federal
Government's opportunity to try to staunch the damage. I opposed the
original Bush plan, which was fatally flawed on several counts. Since
then I have worked in good faith to fix its shortcomings, and by now
several constructive changes have been made. After many fits and starts
and long negotiations that have run through many nights, the clock is
close to running out. As the Senate has prepared to vote on this
revised plan, I have weighed its flaws and its improvements against the
need for action to avert a wider credit crisis and the harm that would
bring to Vermont and the Nation. I decided that this national emergency
tips the balance in favor of this revised plan.
Vermonters are divided on this, and I know that many Vermonters feel
strongly that this is the wrong answer. But with credit conditions for
businesses, public institutions, States, localities, and average
Americans deteriorating every day, I believe that acting now to help
put our economy on an even keel has become an urgent priority.
The bill that the Senate is voting on tonight has changed
significantly since President Bush first proposed a $700 billion blank
check last week. It provides greater checks and balances on the
Government's authority and preserves the rights of people affected by
the conduct of financial institutions that participate in the
Government's plan. Any actions taken by the Treasury Secretary should
be approved by an oversight board, supervised by an inspector general,
reviewed under the Administrative Procedures Act, and examined by the
courts if there is a question of fraud or abuse. I fought and won in
adding the check and balance of judicial review.
It increases the Government's insurance of consumers' and business's
bank deposits from $100,000 to $250,000. This would safeguard the
savings deposits of families and businesses and farmers in Vermont and
protect the checking accounts of businesses that continually need to
buy materials, sell their products and make payroll.
This plan now also tightens the restrictions on executive pay and
banning golden parachutes for firms participating in the program. Under
current law, there are no restrictions on the amount of executive
compensation that Wall Street CEOs can be paid. With these people
having their hand out for a Federal bailout, we should limit executive
pay and prohibit greedy executives from walking away from the mess they
created with millions while regular American investors lose their
savings and retirement funds.
Senator Obama spoke eloquently and persuasively on this tonight. His
argument weighed heavily with me. My decision to support this remedy
did not come easily, but the worsening crisis has made the choice
increasingly clear and the stakes of doing nothing, significantly
higher.
Mr. SPECTER. Mr. President, I am supporting this Federal economic aid
legislation because the failure of Congress to take some decisive,
substantial, action would run the risk of dire consequences to U.S. and
world markets. The 777 point plunge in the Dow plunge on Tuesday, in
the wake of the House's rejection of this legislation, demonstrates the
potential for even greater problems if Congress does nothing.
My affirmative vote is made with substantial misgivings. It is a very
unpopular vote, evidenced by constituents' calls and letters and
personal contacts overwhelmingly against the plan. It is understandable
that the American taxpayers are opposed to footing the bill for unwise
speculation on Wall Street and federal officials who failed in the
regulatory process. Congress should follow the teachings of Edmund
Burke, the greatest philosopher, who said in 1774 that, in a
representative democracy, elected officials should consider their
constituents' views, but in the final analysis they owe their
constituents their independent judgment as to what should be done.
From the outset, I cautioned against Congress's rushing to judgment.
When the initial proposal was made, I wrote to Majority Leader Harry
Reid and Republican Leader Mitch McConnell by letter dated September
21, 2008, urging we take the time necessary to get
[[Page 23597]]
the legislation right. By letter dated September 23, 2008, I wrote to
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben
Bernanke asking a series of questions which have not yet been answered.
Then by letter dated September 27, 2008, accompanied by a floor
statement, I made a series of suggestions to the executive and
legislative negotiators. Again, there has been insufficient time for a
reply.
The rush to judgment began in mid-September when Treasury Secretary
Henry Paulson and Federal Reserve Chairman Bernanke warned of an
imminent meltdown in financial markets which would threaten retirement
funds, jeopardize the jobs of millions of Americans, and subject
homeowners to more evictions. A few days later Secretary Paulson issued
a three page economic rescue plan which has since grown to a 112-page
bill before additional provisions were added.
Whenever we deviate from regular order which has been developed
during more than 200 years of serving our country very well, we are on
thin ice. On regular order, the legislative process customarily begins
with a bill which members of Congress can study and analyze. Here, we
were presented with a bill which Congress was asked to act upon within
hours after completion. Customarily, after the legislation is in hand,
there are hearings with proponents and opponents of the bill and an
opportunity for members to examine, really cross examine, to get to the
heart of the issues and alternatives. There have been limited hearings
with executive branch officials, but not in the context of analyzing
the finished bill or an opportunity for opponents or advocates of
alternatives.
After the hearings, regular order calls for a markup in the committee
of jurisdiction going over the language line by line with an
opportunity to make changes with votes on those proposed modifications.
Then the committee files a report which is reviewed by members in
advance of floor action where amendments can be offered and debate
occurs. The action by each house is then subjected to further
refinement by a conference committee which makes the presentment to the
president for yet another line of review.
The current process drastically shortcuts regular order. For example,
there was no opportunity for members to offer amendments to substitute
loans or a governmental insurance policy for the plan to authorize the
Treasury Secretary to buy toxic securities which is problemsome because
there is no market which establishes value. So the government, and then
the taxpayers, may well be overpaying. If loans were made like the AIG
model with senior secured provisions, the government might well pay
less, as I suggested in my letter dated September 27. In that letter I
further suggested that consideration be given to government insurance
which would have eliminated the uncertain values in purchases and would
have limited the government obligation to being an insurer of the
specific commercial transactions which require governmental aid.
In my letter of September 27 I further raised the issue of exercising
care to avoid running afoul of the Supreme Court decision in INS v.
Chadha. It is uncertain whether the stipulation giving Congress the
authority to reject the last installment of $350 billion would satisfy
the Chadha standard.
In addition there has not yet been an adequate showing as to how the
overall figure of $700 billion was determined. In my letter of
September 27, I called for a detailed explanation for Congress as to
how that figure was arrived at and the necessity for such a large sum.
Similarly I sought justification for an initial expenditure of $250
billion.
We have been working against a backdrop that unless immediate or very
prompt action is taken, there is an enormous risk of an economic
collapse. In my letters, I expressed my judgment that this would not
occur as long as it was seen that the Congress was determined to do
something significant and was working as promptly as practicable to
come up with remedial legislation. In fact, the market rose on
September 25 and 26, when the Congress appeared to be moving toward a
legislative solution. The Dow then dropped on September 29 when the
House rejected the proposed legislation. Had the House not taken that
negative vote when the vote count was not solid, there may well have
been enough time to improve the bill without causing the market's
collapse.
Even now, there has been a limited time for deliberation and Members
have not had an opportunity to debate and vote on alternatives.
It is true that the proposed legislation is enormously improved over
the first Paulson proposal, but it still grants enormous authority to
the Treasury Secretary. The $700 billion is not to be authorized
immediately, but instead there are installments of $250 billion, $100
billion at the request of the President and $350 billion more subject
to congressional objection, although the latter phase may be
unconstitutional under Chadha. For protection of the taxpayers, the
proposal contains a provision that if the government does not regain
its money after 5 years, the President would be required to submit a
plan for compensating the Treasury ``from entities benefiting from the
programs.'' While that provision is a far way from a guarantee or even
assurances that such recovery legislation would be enacted, it gives
some important comfort to the taxpayers' position.
There are also provisions for multiple layers of oversight including
a Financial Stability Oversight Board comprised of the Chairman of the
Fed, the Treasury Secretary, the Director of the Federal Home Finance
Agency, the Chairman of the Securities and Exchange Commission, SEC,
and the Secretary of Housing and Urban Development, HUD, that will meet
monthly to oversee the program. The Secretary will be required to
report to Congress on a regular basis on the actions taken, along with
a detailed financial statement. These reports will include information
on each of the agreements made, insurance contracts entered into, and
the nature of the asset purchased and projected costs and liabilities.
Additional oversight will be provided by the Comptroller General--
reports to Congress--a new inspector general--audits and quarterly
reports--a congressionally appointed oversight panel--market and
regulatory review, and reports to Congress on the program and the
effectiveness of foreclosure mitigation efforts--and by OMB and CBO--
cost estimates. A report will be required from the Secretary of the
Treasury with an analysis of the current financial regulatory framework
and recommendations for improvements.
There are substantial limitations on having benefits for entities
which created the problem and limitations on executive pay. The
executive compensation and corporate governance provisions provide that
Treasury Department would have to promulgate executive compensation
rules governing financial institutions that sell its troubled assets.
In cases where financial institutions sell troubled assets directly
to the government with no competitive bidding and where the government
receives a meaningful equity position, the legislation states that,
until that equity stake is sold, executives would not get incentives
``to take unnecessary and excessive risks'' and would have to give up
or repay bonuses or other incentives based on financial statements that
``are later proven to be materially inaccurate.'' The bill also would
prohibit ``any golden parachute payment to senior executives.''
The legislation is less stringent in provisions for financial
institutions that sell their assets to the government through an
auction. Such provisions would apply only to companies that sell more
than $300 million in assets and would subject companies and employees
to extra taxes. Corporations would not be able to deduct any salary or
deferred compensation of more than $500,000, and top executives would
face a 20 percent excise tax on golden parachute payments if they left
for any reason other than retirement. In evaluating limitations on
executive salaries, it is relevant to note that the Institute for
Public Studies found that chief executives of large U.S. companies made
[[Page 23598]]
an average of $10.5 million last year. That is more than 300 times the
pay of the average worker.
The final proposal does provide for debt insurance, but leaves it to
the Secretary of the Treasury to utilize that approach so it seems
unlikely that it will be implemented in light of the fact that
Secretary Paulson has bluntly stated his disagreement with it. Had
there been floor amendments, Congress could have structured standards
for utilization of debt insurance.
Had we followed regular order with an opportunity to propose
amendments, consideration could have been given to my proposal, S.
2133, which would have authorized the bankruptcy courts to restructure
interest and scheduling of payments. The so-called variable rate
mortgages have confronted many homeowners with the surprise that
original payments, illustratively, of $1,200 a month were soon raised
to $2,000 which resulted in defaults. Individualized examination by the
bankruptcy courts might show misrepresentation or even fraud to justify
revising the interest payments and rearranging the payment schedule. Or
consideration could have been given to Senator Durbin's proposed
legislation, S. 2136, which would have authorized the bankruptcy courts
to reset the principal balance depending on the value of the home. I
opposed that bill because I thought it would discourage future lending
and in the long run raise the cost to homebuyers. But at least,
following regular order, there would have been an opportunity to
consider Senator Durbin's proposal as well as my suggested legislation.
The legislation contains authority for the Treasury Secretary to
compensate foreign central banks under some conditions. It provides
that troubled assets held by foreign financial authorities and banks
are eligible for the TARP program if the banks hold such assets as a
result of having extended financing to financial institutions that have
failed or defaulted. Had there been an opportunity for floor debate,
that provision might have been sufficiently unpopular to be rejected or
at least sharply circumscribed with conditions.
As a step to help keep borrowers in their homes, I proposed language
found in Section 119(b) of the bill to address the concern that some
loan servicers have been reluctant to modify home mortgage loan terms
because they fear litigation from investors who hold securities or
other vehicles backed by the mortgage in question. The loan servicers
have a legal duty to the investors to maximize the return on their
investments. In testimony on December 6, 2007, before the House
Committee on Financial Services, Mark Pearce, speaking on behalf of the
conference of State Bank supervisors, discussed a meeting with the top
20 subprime servicers. He explained that ``many of them brought up fear
of investor lawsuits'' as a hurdle to voluntary loan modification
efforts. Because the rescue legislation encourages the government to
seek voluntary loan modifications, it is important to remove any
impediments to such modifications. To that end, the language provides a
legal safe harbor for mortgage servicers making loan modifications, if
the loan modifiers take reasonable mitigation steps, including
accepting partial payments from homeowners.
On reforms to prevent a recurrence of this crisis, we need to
question whether the rating agencies adequately analyzed mortgage-
backed securities before issuing investment-grade ratings. They appear
to have failed, in July of 2007, when it became apparent that ratings
issued by the big three rating agencies--Moody's, S&P and Fitch--could
not be relied upon, I urged the relevant committees to look into the
ratings that those agencies issued in recent years regarding mortgage-
backed securities.
Financial institutions that issue asset-backed securities obtain
ratings for such securities. The failure to issue reliable ratings
misrepresented the facts and fed the ability of financial institutions
to tout the value of securities even though their value was declining.
Congress and the regulators need to take up the rating agencies issue,
and consider whether ratings agencies that have utterly failed to
detect and reflect the risks associated with the securities they were
rating should be accorded any reliance or role in our financial system.
Some have suggested they should be regulated and we may need to
consider that.
In addition, Congress and the regulators should review ``off-balance
sheet'' transactions and leveraging. There should be a close
examination on whether banks are sufficiently transparent and providing
accurate accounting that truly reflects risk and leverage.
Similarly there should be a review on credit default swaps, CDS,
which are privately traded derivatives contracts that have ballooned to
make up what is a $2 trillion market according to the Bank of
International Settlements. They are a fast-growing major type of
financial derivative. Many experts assert that they have played a
critical role in this financial crisis as various financial players
believed that they were safe because they thought CDS fully insured or
protected them, but the CDS market is unregulated and no one really
knows what exposure everyone else has from the CDS contracts.
Consideration should be given to subjecting all over-the-counter
derivatives onto a regulated exchange similar to that used by listed
options in the equity markets.
Excessive overleveraging has been a contributing factor in the
turmoil that now threatens our financial institutions. We have seen a
massive expansion of the practice of leveraged financial institutions--
banks, investment banks, and hedge funds--making investments with
borrowed money. In turn, they borrow more money by using the assets
they just purchased as collateral. This sequence is continued again and
again. The financial system, in its efforts to deleverage, is
contracting credit. They must guard against future losses by holding
more capital. Deleveraging is leading to difficulty on Main Street for
individuals seeking to get a mortgage or buy a car. If a financial
institution is able to unload its toxic assets onto the government, it
will again be able to resume its lending activities that are crucial
for economic growth in the United States. Unfortunately, much of the
financial crisis has arisen from miscalculations of the risks involved
with purchasing large amounts of securities backed by subprime
mortgages and other toxic assets. We now see a situation where we are
not just talking about a handful of firms. This is a widespread problem
that should be addressed by this package and in future reforms of our
financial regulatory structure.
In addition, the package crafted by Senate leaders includes two
notable changes from the version that was rejected by the House on
Monday. It will include a tax package that was previously passed in the
Senate by a vote of 93-2 on September 23, 2008, but has since been
rejected by the House in a dispute over revenue offsets. It includes
tax incentives for wind, solar, biomass, and other alternative energy
technologies. It also includes critically important relief from the
alternative minimum tax, which threatens to raise the tax liability of
over 22 million unintended filers in 2008 if no action is taken.
Finally, the package includes a host of provisions that either expired
in 2007 or are set to expire in 2008, including the research and
development tax credit, rail line improvement incentives, and quicker
restaurant and retail depreciation schedules. I supported the Senate-
passed tax extenders bill because it struck a responsible balance on
the issue of revenue raising offsets.
The package also includes a provision to temporarily increase the
Federal Deposit Insurance Corporation, FDIC, insurance limit to
$250,000. Currently, the FDIC provides deposit insurance which
guarantees the safety of checking and savings deposits in member banks,
up to $100,000 per depositor per bank. Member banks pay a fee to
participate. The current $100,000 limit has been unchanged since 1980
despite inflation. This approach is supported by both Senator McCain
and Senator
[[Page 23599]]
Obama, by House Republicans, and by the FDIC Chairman Sheila Bair, who
sent a request for this change to Congress on Tuesday. Raising the cap
could stem a potential run on deposits by bank customers, particularly
businesses, who fear losing their money. Such fears contributed to the
collapse of Washington Mutual and Wachovia Bank in the past week.
However, some economists warn that raising this limit creates a ``moral
hazard'' where banks have less incentive to protect assets when there
is a government backstop. The coverage amount reverts back to $100,000
after December 31, 2009.
Congress is now called upon to make the best of a very bad situation.
We must pledge to our constituent taxpayers that we will learn from the
mistakes which led to the brink and take corrective, vigilant, action
to prevent a recurrence.
Mr. LEAHY. Mr. President, responding to the national economic crisis
has been the focus of our efforts here in the Senate for over a week. I
have been consulted by Senator Christopher Dodd, chairman of the
Banking Committee, on the financial bailout proposal. I thank him for
all of his hard work to address this complex problem. As chairman of
the Senate Judiciary Committee, I wish to inform all my fellow Senators
about the intent with which the judicial review provisions were
drafted. I believe it is especially important for Senators to have this
understanding before Members of the Senate vote on this legislation.
From the very moment I received the administration's proposal, I have
objected to any measure that strips the courts from playing their
indispensible role as a check on executive power. I have insisted at
every stage in the negotiations that the traditional Administrative
Procedures Act review apply to the Secretary of Treasury's actions, as
well as any constitutional review that our courts are charged with in
our democracy.
It was of utmost importance to me to see that judicial review has
been maintained in the version that we will be considering in light of
the authority this legislation will give to the Treasury Secretary.
This review is primarily based on traditional court review under the
Administrative Procedures Act. In that section, the word ``law'' means
any State or Federal law or common law interpreting such State and
Federal laws. This is a crucial distinction, and it is not the intent
of the drafters of these provisions to allow the Secretary of the
Treasury to vitiate any private right of action on behalf of
shareholders based on Federal statute or judicial interpretation of a
Federal statute. With this legislation, Congress does not intend to
allow any financial institution that participates in this plan to gain
immunity from suit, nor permit the Secretary to confer such immunity on
any participant.
As chairman of the Senate Judiciary Committee, my other top priority
for this legislation has been that the Secretary not be able to
interfere with or impair the claims or defenses available to any other
person. Americans harmed by corruption on Wall Street should not have
their causes of action affected by the Secretary in any way. Truth in
Lending Act claims should be allowed to proceed in due course.
Shareholders who have been injured by the misconduct of corporate board
members or executives should be able to file and continue their claims
against those corporations. It is my understanding and intention that
none of these causes of action should be harmed or otherwise affected
by our bailout legislation. This is why we included a savings clause to
make this explicit.
We heard repeatedly from the administration that they were concerned
that rogue judges would award injunctions and thwart the emergency
actions needed for the Secretary to calm the financial crisis. By
agreeing to the administration's request on injunctions, we intend for
damages actions to be the avenue of relief for any misconduct, should
it occur, on the part of the Secretary. We were assured that existing
waivers of sovereign immunity under the Tucker Act, the Contracts
Dispute Act, the Little Tucker Act, the Federal Tort Claims Act and
relevant civil rights laws would apply to the Treasury Department's new
responsibilities, just as these laws have applied to the Treasury
Department's actions prior to the bailout measure.
We have also insisted on protection for consumers who are parties to
mortgage agreements by including a provision to make sure that any
rights or claims held by a consumer in relation to those loans, whether
under the terms of the mortgage or Federal or State law, are preserved
in the event those loans are transferred to the Federal Government. It
is not the intent of Congress to deprive homeowners of recourse against
those lenders who, through greed, irresponsible lending, or outright
fraud, led people into taking out unadvisable loan products and who
were responsible for contributing to those homeowners' current mortgage
struggles. Once again, it is imperative that the extraordinary
authority Congress has given to the Treasury Secretary not be at the
expense of the rights of American citizens to enforce the terms of
their contracts or to rely upon State and Federal laws that protect
against fraudulent lending practices or other deceptive behavior.
Even in emergencies, it is important that the Federal Government
exercise its authority consistent with the rule of law. Congressional
negotiators were aware of the administration's call for immediate
reaction, but I believe we acted responsibly by taking the time to
ensure that adequate legal protections were provided in the
legislation. The courts play a fundamental role in our democratic
system of government and will be especially important in ensuring that
these new authorities are used responsibly.
Americans must have the confidence that those harmed by the conduct
of any financial institution can access their courts for redress,
despite this legislation. The Congress is aware of civil litigation
brought by shareholders or by or on behalf of financial institutions
that purchased troubled assets, against officers, directors, and in
some cases counterparties whose alleged misconduct caused or
contributed to their losses. The Congress is also aware of media
reports of criminal investigations. These matters are for the justice
system to resolve on an individual basis, but the Secretary and the
executive branch should generally cooperate with public and private
efforts to recover losses from wrongdoers in the financial markets,
whether brought by a governmental entity, securities purchasers, the
corporation itself, or asserted on behalf of the corporation
derivatively. Nothing in this act is meant to detract from any rights
or recovery against private parties to redress wrongdoing that exist
under Federal or State law.
I thank the leadership for consulting me during the drafting and
redrafting process and for incorporating my language into the
provisions providing for judicial review.
Mr. ENZI. Mr. President, I rise today to speak about the historic
vote that will occur today on the Emergency Economic Stabilization Act
of 2008. Members of Congress and the U.S. Treasury Department have
spent the last two weeks debating a response to the declining U.S.
credit markets and a plan to get America's economic machine running
again. The final product is a far cry from the Treasury's initial 3-
page proposal. However, I am still not convinced that this is the best
solution for our country.
Throughout this debate, I have listened to arguments from both sides.
I studied this legislative proposal line by line, and tried to measure
the benefit this legislation would bring to our financial markets
against its enormous cost to our taxpayers. Ultimately, I do not
believe this is the best solution for our economy or the taxpayer. Has
Congress been rushed? Have we decided to do something, anything, even
if it's wrong because of the dire warnings of an economic apocalypse?
Yes, but in this case the wrong proposal is just too costly for our
country in terms of dollars and in terms of our economic future.
Something does need to be done to save our economy, but this package is
just a very costly band-aide for big banks that will do very little to
help patients who need major surgery.
Had Congress been able to use the regular committee process to craft
a
[[Page 23600]]
bipartisan and comprehensive legislation, the resulting bill may have
gained my support. Unfortunately, Congress has been pressured into
passing this bill in two weeks by Treasury and Wall Street. A rescue
plan of this scale requires a clear plan of action with a substantial
chance of success. This plan has neither.
When Treasury Secretary Paulson and FED Chairman Bernanke first came
to the Hill to ask for help, my colleagues on the Senate Banking
Committee and I told him that even his dire warnings of a global
economic meltdown would not allow us to give him a blank check. Since
that time, the markets have soared and plunged on each new development
out of Washington. But the warnings about global collapse have not been
realized yet, and I pray that they won't. By passing this legislation
are we vastly underestimating the resilience of our markets and
overestimating the need for this legislation? This does not provide us
with any measurable goals for success.
This plan inadequately addresses the root cause of our market crisis,
home foreclosure. Without addressing the root of our economic problem,
I have little confidence that it will be successful. I cannot vote for
a bill to authorize $700 billion in taxpayer money without a
substantial chance of success.
What I was hoping for was a solution that would get closer to the
real problem and to the people. The housing crisis accelerated the
financial problem. The response was to bailout banks and investment
firms and forget the hurting homeowner. That is still what we are doing
while claiming to make the credit market more liquid using taxpayer
money. The public still sees it as a big bank bailout.
In addition, this plan offers no clear plan to solve our market
crisis. I questioned Secretary Paulson and Chairman Bernanke about the
asset purchase program last Sunday, and again during the Senate Banking
Committee hearing last Tuesday. I did not receive satisfactory answers,
and many doubts about this program still remain. The primary purpose of
this program is to find the true value of these mortgage assets through
a Treasury purchase program. Yet this legislation provides no details
on how that process works, who will participate, and how these assets
will be priced.
I understand why many of my colleagues voted for this bill and why
some of my constituents encouraged me to do the same. This was one of
the hardest decisions I've ever had to make as a senator. I hope that,
if this bill ultimately passes, that it does help. I really do. I know
this economic hole is dark and there is a real risk of many Wyoming
people suffering, but I believe there are other steps that we could try
before jumping off a cliff $700 billion high.
I will continue to work with my colleagues to craft comprehensive,
accountable, and common-sense reforms to our financial markets. We must
consider reforming the fair value accounting method when there is no
market. The current rules prevent banks from understanding the true
price of their assets in the long term. We need to enact reforms that
make federal financial regulation more efficient, vigorous, and
transparent. The role of Fannie Mae and Freddie Mac also needs to be
re-evaluated in order to restructure the mortgage market from the
bottom up. Finally, we should consider changes to our tax code,
including capital gains and mortgage interest deduction, which will
encourage liquidity in the marketplace. Another idea would be to expand
the tax credit to those buying up foreclosed homes or homes on the
market over 180 days.
The best way to solve this problem was to never get in the situation
in the first place, but at this point that is not an option. Further
disruption of our free market system by rewarding bad decisions with
taxpayer money will only make this problem worse. That is why I oppose
this legislation. We've got a lot more work to do and I look forward to
working with my colleagues to reform our financial markets to ensure
this situation never happens again.
Mr. SALAZAR. Mr. President, I rise to discuss the economic crisis
that is gripping our country and the bipartisan economic rescue package
currently before the Senate.
These are troubling times for the American people. We are facing a
devastating credit freeze and the possibility of a catastrophic
economic collapse. The problems that started with the excesses and
``anything goes'' attitude on Wall Street, are, unfortunately, not
contained to Wall Street. The news from Colorado over the last few days
has been grim.
Small businesses are worrying that their credit will dry up and they
won't be able to make payroll.
Workers are seeing their pensions and retirement savings hanging in
the balance. Young families are worrying they won't be able to borrow
money for their first home. Students fear that their bank won't extend
their college loans.
Farmers and ranchers worry that credit will not be available and
interest rates will skyrocket, making it more difficult to buy seed,
fuel, and fertilizer.
And construction projects in Colorado are grinding to a halt.
Borrowing money is getting too expensive.
To be sure, the economic pain inflicted by the financial credit
crunch is not new to middle-class families in Colorado and across the
Nation.
Over the last 8 years, middle-class families have seen their incomes
drop, while the cost of energy and health care and education have
skyrocketed. Gas is still near $4 a gallon. Meanwhile, in the last 2
years, millions of families have been forced into foreclosure or have
seen the value of their homes plummet.
For these families on Main Street who have been playing by the rules
but who have been left behind by the failed economic policies of the
last 8 years, it is entirely legitimate to ask who was ``minding the
store'' on Wall Street over the past 8 years.
While ordinary Americans were struggling to pay the bills and fill
the tank, and while many of my colleagues and I were calling for
action, the administration was twiddling its thumbs.
We heard over and over that the fundamentals of our economy were
strong.
In March, we heard that the credit crisis would be contained if the
Federal Reserve came to the rescue of Bear Stearns. Then we heard the
same thing when the administration asked for the authority to back up
Fannie Mae and Freddie Mac, when it was forced to use that authority,
and when the Fed loaned $85 billion to AIG.
I can understand why Americans are angry and frustrated. I am angry
and frustrated.
But today, we must do our very best to concentrate on the task at
hand.
The question before this body is whether the proposal that has been
negotiated by congressional leaders in both parties and the
administration can unfreeze the credit markets that are so vital to
healthy economic activity, prevent future financial failures, and
prevent economic paralysis. Millions of jobs are at stake. American
prosperity is at stake. The economic security of middle-class families
is at stake.
With that in mind, the Senate today is considering an economic rescue
package that aims to protect middle-class Americans from the Nation's
financial crisis. The package would create the Troubled Assets Relief
Program, or TARP. The goal of the program is to inject liquidity into a
cash-strapped market and restore the confidence of investors, lenders,
and borrowers.
I strongly support this goal.
But let me be clear: I am glad that Congress has overhauled the
administration's original proposal and not handed the Secretary of the
Treasury a blank check. The proposal before us contains a number of
provisions that will ensure strong, independent oversight of the
program; better protect the taxpayer; impose limitations on executive
compensation for participating companies; and increase foreclosure
mitigation assistance to distressed homeowners.
First, I am especially pleased that the money will be provided in
installments: $250 billion of the $700 billion requested will be made
available at the
[[Page 23601]]
outset. The President would have to certi the need for an added $100
billion, and the final $350 billion would be contingent on
congressional approval. I believe this structure provides an important
safeguard in the event that the program does not achieve its intended
objectives.
Second, the proposal before us requires the Treasury Department and
other Federal agencies to try and work out the mortgages it purchases
or controls in an effort to keep families in their homes. It also
expands eligibility for the Home for Homeowners program, which was
created as part of the housing stimulus bill earlier this year, and
which would offer FHA-insured refinancing to distressed homeowners.
Third, in order to provide as much protection for taxpayer dollars as
possible, the bill requires companies that sell some of their bad
assets to the Government to provide warrants so that taxpayers will
benefit from any future growth these companies may experience as a
result of participation in the program. It also requires the President
to submit legislation that would cover any losses to taxpayers
resulting from this program.
Fourth, the proposal contains a number of provisions designed to
limit executive compensation for participating companies, including the
elimination or limitation of certain tax benefits and, in some cases,
caps on compensation. In addition, the bill limits or penalizes the
excessive severance packages for departing executives frequently
referred to as ``golden parachutes.''
Finally, the legislation includes strong oversight mechanisms and
reporting requirements to ensure that Congress and the American public
have timely and relevant information about the program and its
activities every step of the way. Specifically, the bill requires the
Treasury Secretary to report regularly on the use of funds and the
progress made in addressing the crisis, and establishes two independent
oversight mechanisms: a bipartisan oversight board and a special
inspector general for the program.
Each of these provisions represents a vast improvement over the bill
that Secretary Paulson and President Bush submitted to Congress, and I
joined many of my colleagues in urging their inclusion through the
course of the negotiations.
I am also pleased that after the first attempt to pass the economic
rescue package in the House of Representatives earlier this week,
additional improvements were made to the bill to provide greater
protection to middle-class Americans whose savings are at risk.
Importantly, this bill increases the FDIC limits from $100,000 to
$250,000. This will better protect the savings of ordinary Americans
and helps ease concerns that I had with the initial compromise.
In addition, I am extremely pleased that, in passing this economy
recovery package, we will extend a wide range of important tax relief
provisions for middle-class families, including protection from the
Alternative minimum tax for 23 million Americans and deductions for
college tuition and teachers' out-of-pocket classroom expenses.
This package would also create jobs through a new set of tax
incentives to promote renewable energy and energy efficiency. These tax
provisions are vital to setting our economy back on the track to
prosperity by spurring investment in a new generation of clean energy
technologies. In the 3 years between 2004 and 2007, renewable energy
sector jobs in the Denver metro area surged from 5,760 to 13,940 and
the number of renewable energy companies in the 9 counties surrounding
Denver rose from 104 to 1,010. Extending and expanding these tax
incentives will be critical to enabling the continued growth of this
industry in my State and across the Nation.
Having said all of that, despite these modifications to the
administration's original proposal, I believe there are a number of
additional areas that need to be addressed and important questions that
need to be answered.
For example, as we consider whether and how to protect the American
public from the consequences of the failures of our financial sector,
we must take steps to ensure this situation does not occur again in the
future: That means stronger oversight and regulation of our financial
industry.
While I understand that we must act quickly and that the proposal
must be focused, I urge my colleagues to join ale in pledging to enact
a strong and effective regulatory structure within the next 6 months.
In addition, there are legitimate questions about how the
administration settled on $700 billion, why Congress was asked to
undertake this large and wide-ranging proposal on an extremely
abbreviated timetable with limited opportunity to conduct hearings, and
what, exactly, the TARP program will look like--what kinds of assets it
will buy and how much it will pay for them.
Should this legislation become law, I am committed to forcefully
exercising the congressional oversight authority that it provides to
get answers to these and other questions, and to hold the
administration accountable for its actions.
This proposal is far from perfect. And I respect the positions of my
colleagues who have expressed principled opposition to this bill. Their
voices have been important to this debate.
However, after devoting considerable time and thought to the severity
of our current financial crisis and to the consequences of inaction for
business, families, and farmers in Colorado and across the Nation, I
have concluded that I must support this proposal and work diligently to
ensure its effective implementation.
We are in the midst of an extraordinarily serious financial crisis.
Despite legitimate concerns over the circumstances that brought us to
this juncture, we have an obligation--today and always--to act in the
best interest of the people we were elected to represent.
This proposal has serious shortcomings, but I believe it is firmly in
our constituents' best interests that we act now to protect Main Street
from the failures of Wall Street; to ensure that small businesses,
farms, and ranches can continue to access the credit they need to
survive and ultimately thrive; and to secure the ability of families to
save for retirement, find good jobs, and provide for their children's
future.
None of us can be sure exactly where our economy will be in 6 months
or a year. But what I do know is that the economic security of all
Americans is at risk today. I am angry with how we got here, and I am
not fully satisfied with this proposal, but given a fighting chance,
the American people have always risen to the challenges before them.
This bill will give American families that chance by protecting them
from the failures of Wall Street and rescuing Main Street from the
perils of a devastating credit crunch.
I am confident that our best days are still ahead. We will soon turn
the page on the failed economic policies of the last 8 years, right our
economic ship, put our Nation back on a path to prosperity, and restore
our economy to its rightful place as the envy of the world.
Mr. DODD. I wish comment on certain parts of the Emergency Economic
Stabilization Act of 2008.
Section 132 reauthorizes the Securities and Exchange Commission to
suspend Financial Accounting Standard 157 if it ``is necessary or
appropriate in the public interest and is consistent with the
protection of investors.'' That is a very high standard. I do not
expect or encourage the Commission to take action in this regard.
Vital to the health of U.S. capital markets is financial information
that is reliable. Accounting rules should produce financial data that
faithfully depicts economic reality and is neutral, not favoring either
the supplier or user of capital, either the buyer or seller of
securities. The formulation of accounting standards is best left to the
accounting experts. Congress should not be in the business of setting
accounting standards.
Furthermore, it is critically important that we respect the
independence of the Financial Accounting Standards Board, so that they
can observe a fair
[[Page 23602]]
and open process and arrive at the most appropriate accounting
standards. Congress should not chill or override that independence and
does not do so in this legislation.
With respect to mark to market, I understand concerns that have been
raised. However, many experts object to the suggestion of suspending
it. For example, the Council of Institutional Investors, the Center for
Audit Quality, and the CFA Institute have said they ``are united in
opposing any suspension of `mark to market' or `fair value'
accounting.'' They stated: [Suspending fair value accounting during
these challenging economic times would deprive investors of critical
financial information when it is needed most. Fair value accounting
with robust disclosures provides more accurate, timely, and comparable
information to investors than amounts that would be reported under
other alternative accounting approaches. Investors have a right to know
the current value of an investment, even if the investment is falling
short of past or future expectations.]
Section 133 directs the Commission to conduct a study on mark-to-
market accounting. The study is to be completed within 3 months, which
will necessarily limit its scope and depth. Within these limits, I will
be particularly interested in the findings on the impact of such
standards on the quality of financial information available to
investors and on the fairness of the standard setting process.
Section 118, ``Funding,'' states that the purposes for which
securities may be issued include actions authorized by this act,
including the payment of administrative expenses. This would include
such reasonable expenses as are incurred in the preparation of reports,
such as the study mandated by section 133.
Section 3 states that the term, ``financial institution,'' ``means
any institution, including, but not limited to, any bank, savings
association'' or other specific types of institutions. The latitude of
the definition is intended to include the parent holding companies of
one of the identified types of institutions that are established and
regulated under the laws of the jurisdictions set forth in the
definition. Thus, for example, if a wholly owned securities subsidiary
of a public-traded financial holding company sells assets to the
Treasury Department, it would be subject pursuant to section 113 to
providing a warrant to the Secretary to receive stock in such holding
company.
With respect to section 119, I want to associate myself with the
remarks of Senator Leahy on the savings clause.
Section 101 of the legislation gives broad authority for the Treasury
Secretary, in consultation with other agencies, to purchase and to make
and fund commitments to purchase troubled assets from eligible
financial institutions on terms and conditions that he determines. This
legislation does not limit the Secretary to specific actions, such as
direct purchases or reverse auctions but could include other actions,
such as a more direct recapitalization of the financial system or other
alternatives that the Secretary deems are in the taxpayers' best
interest and that of the Nation's economy.
Section 129 requires the Federal Reserve to submit regular written
reports to the Senate Banking and House Financial Services Committees
whenever it uses its authority under section 13(3) of the Federal
Reserve Act. The periodic updates to the reports are meant to keep the
committees informed of the specific details of any loans or the
aggregate details concerning programs the Federal Reserve establishes
that are covered by this requirement.
Section 131 requires the Treasury to reimburse the Exchange
Stabilization Fund, ESF, for any losses that result from the temporary
guaranty program that they recently established. It is the intent of
the Treasury that the temporary guaranty program that they recently
established will not last longer than 1 year, and while the final
version of the act does not mention this time-frame, it was because the
Treasury Department has publicly stated that this temporary program
will last no longer than 1 year, which is consistent with the intent of
this legislation. Further, the act forbids the Secretary from using the
ESF for the establishment of any similar fund in the future. The ESF
has never been used for loans or guarantees for domestic purposes, and
it is important that the money in the fund continue to be available for
the ESF's stated purpose.
Section 136 provides a temporary increase in the coverage limit for
nonretirement accounts in insured depository institutions. It is the
intention of the legislation that this increase be temporary and this
increase is not a statement of any intent for changes in the permanent
deposit insurance level.
Mr. President, I ask unanimous consent that a letter from the
Treasury Department be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. DODD. Mr. President, I first thank my colleagues for their
generous comments. This has been an incredible 2 weeks. It began
exactly 2 weeks ago tomorrow night when the Chairman of the Federal
Reserve and the Secretary of the Treasury, in words that were as
chilling as any I have heard in 28 years here, describing the condition
of our economy.
We heard the words ``credit crunch.'' I was educated in high school
by Jesuits, and the word ``credit,'' the derivative, comes from the
Latin word ``to believe.'' What is more important to me at this moment
than any financial loss that Wall Street suffers or other institutions
or shareholders, as much as I am concerned about it, but the biggest
loss we run the risk of is Americans believing in their country, that
sense of confidence and optimism that has been at the base of our
success for more than two centuries.
I say to my colleagues who are wondering whether at this moment we
ought to embrace this plan to move us to the right footing, this is the
moment which we must take this opportunity to get back our economy, and
simultaneously, more important than anything else we achieve, to
restore Americans' confidence, their optimism, and their belief that
this country can provide a better day for their children and their
grandchildren than the one in which they were raised.
Nothing less than that, in my view, is at stake in the vote we will
take in a matter of minutes; maybe the most important vote any one of
us will ever cast in this body. It will determine the future and the
well being of our country. I beseech my colleagues, not as Democrats or
as Republicans, but as Americans, and as Members of this remarkable
institution, to cast a vote for the future believability in our economy
and our country.
I urge a ``yes'' vote.
Exhibit 1
Department of the Treasury,
Washington, DC, October 1, 2008.
Hon. Christopher Dodd,
Chairman, Committee on Banking, Housing and Urban Affairs,
U.S. Senate, Washington, DC.
Dear Mr. Chairman, I am writing regarding the Emergency
Economic Stabilization Act of 2008.
It is the intention of the Department of the Treasury that
all mortgages or mortgage-related assets purchased in the
Troubled Asset Relief Program will be based on or related to
properties in the United States.
Sincerely,
Kevin I. Fromer,
Assistant Secretary for Legislative Affairs.
____________________
FEDERAL RAILROAD SAFETY IMPROVEMENT ACT OF 2007
The PRESIDING OFFICER. The Senate will now resume consideration of
the House message on H.R. 2095, which the clerk will report.
The bill clerk read as follows:
Message from the House of Representatives to accompany H.R.
2095, entitled an Act to amend title 49, United States Code,
to prevent railroad fatalities, injuries, and hazardous
materials releases, to authorize the Federal Railroad Safety
Administration, and for other purposes.
Pending:
Reid amendment No. 5677 (to the motion to concur in the
amendment of the House of Representatives to the amendment of
the Senate to the bill), to establish the enactment date.
Reid amendment No. 5678 (to amendment No. 5677), of a
perfecting nature.
[[Page 23603]]
The PRESIDING OFFICER. There will be 15 minutes for the majority and
15 minutes for the minority.
The Senator from Texas is recognized.
Mrs. HUTCHISON. Mr. President, I wanted to make sure everyone knows
we have 30 minutes allocated for Amtrak, and then the majority leader,
Senator Reid, also intends to go back, before the vote starts, and use
his leader time at his discretion.
I rise to talk about the Amtrak reauthorization bill which will be
the first vote tonight. I start out by thanking my colleague, Senator
Smith from Oregon, for all of the good work he has done on the rail
safety portion of this bill; also Senator Lautenberg, the majority
member who has worked so hard on the Amtrak portion; and Senators
Inouye and Senator Stevens, the chairman and ranking member of our
committee during most of the negotiations on this big, very important
bill.
I think we have come to a very good position on Amtrak and on rail
safety, and the legislation before us combines these two important
bills that were written with separate subcommittees. I have worked on
rail safety since I came to the Senate in 2004 when Union Pacific was
going through a rash of accidents. The Department of Transportation
initiated a compliance review at the request of myself and all the
members of the Texas Congressional delegation.
The rail safety component of this legislation will reduce driver
fatigue by ensuring that train employees receive adequate rest between
shifts. The recent accident in California has led many to call for the
implementation of new safety technologies on trains. Our legislation
requires the Department of Transportation to develop a plan for
implementation of positive train control systems on trains by the end
of 2015.
I urge my colleagues to vote in favor of this very important
bipartisan legislation.
Financial Bailout
Mr. President, the later votes we will take tonight are on another
major piece of legislation. We have been hearing the debate on it all
afternoon, really for the last 2 weeks. I want to start by saying that
stabilizing our economy is the most important responsibility our
Congress has right now. I did not vote for the Fannie Mae, Freddie Mac
bailout. I did not. I did not vote for that because I did not think
there was enough taxpayer protection, nor were there limits on
executive compensation packages.
When Secretary Paulson came before us last week and said he wanted to
have the power to spend up to $700 billion, I would not have supported
that package, because, again, there were not enough taxpayer
protections, there were not enough limits on executive compensation,
and there was not enough oversight.
But in my 15 years in the Senate, I have never seen a more bipartisan
effort in Congress to sit down and come to a real conclusion for the
good of our country, putting Republican and Democratic labels aside, to
say: We know it is our responsibility to save the financial integrity
of our country for every person who has a pension fund, for every
person who has a lifetime savings in a bank, for every person who has
worked hard all their lives to buy their homes, and to want to be able
to own that home and pay off their mortgage.
I am speaking for every person who has gone to the bank for a loan in
the last 4 days, because they are being told there is no ability to
loan right now. I am talking about a State that goes to the markets for
municipal funding and does not get one bid despite a triple A rating.
Do we have the option of sitting here and seeing this happen in our
country and saying: You know, I do not like this part of that bill or
that part of that bill, so I am going to vote no?
I do not say that any person voting no is not doing it because of
their own convictions, but I am saying that from my standpoint, the
people who have elected me to represent them in the Senate, I have
worked in every way I could to get the taxpayer protections, to get the
oversight of Congress, to have the board that would make a difference
in maybe what could be done by the Treasury, the way they put together
these packages, to make sure there is an upside for the taxpayer, which
there is in this bill, that the taxpayers will have an ownership stake
if there is an upside, and that it will pay down debt. It is not going
anywhere else but paying down debt to start getting our fiscal house in
order. Then the House put in a provision that I thought was very sound.
After 5 years, if the Government is facing a loss in the program, the
President will be required to submit a plan to determine how we recoup
from the financial companies that have been benefited, whatever the
loss might be to the taxpayer.
This legislation also increases the FDIC limits to protect those
people who have their life savings in a bank, so they will not worry
they might be wiped out when it is announced, when they wake up in the
morning, that their bank has gone under.
There is very important tax policy in this bill that was added since
the House turned down the bill, that was agreed to by the bipartisan
working group, very important tax policies. It will give relief of the
AMT to 23 million more low- and middle-income taxpayers in our country.
AMT is eating up the ability for families to be able to save for their
college education for their children.
It also extends the tax incentives that will spur energy production
and innovation, wind energy, production tax credit, research and
development tax credits, sales tax deductions for States that do not
have an income tax.
It also includes help for our disaster areas, to give tax credits to
developers who will help build low-income housing in the 29 Texas
counties that still have not even been able to clean up their streets
yet from Hurricane Ike.
We have added much to this bill from the original proposal. I agree
with something the Senator from California said a few minutes ago:
People think this is the same proffer that was made a week ago that had
no oversight, no taxpayer protections, no upside for the taxpayer, no
limits on executive compensation. That is not what we are talking up
tonight. What we are talking up tonight does have improvements made by
Congress, doing everything we can, that if this is passed and it is run
right, the taxpayers will actually benefit, and we will start paying
down the debt of our country.
Senators Reid and McConnell, Senators Dodd and Judd Gregg, Speaker
Pelosi, Congressman Frank, Congressman Boehner, Congressman Blunt, have
been a bipartisan working group with the President of the United States
and the Secretary of the Treasury, to attempt to do all that we laid
out to the Secretary that we wanted to see in the legislation that was
not there when he first came forward. He has bent over backwards to try
to make sure that we have those protections in place. I urge my
colleagues to remember they have been elected by the people of their
State to make the tough decisions. They have been elected not to go on
what would be their preference for one part of the bill that might not
have gotten in. None of us would have written this exactly the way it
is written. But we all did have the basic standards of taxpayer
protection, giving the taxpayers an upside, of limiting executive
compensation when somebody has run a financial institution into the
ground, increasing the FDIC limits so that people who have their life
savings in a bank will be able to know that is safe.
If anything, the Government of the United States of America ought to
be able to stabilize its financial markets to show the world that we
are the most stable and leading democracy in the world, and that we can
get our house in order. I hope every one of us will think carefully
about a tough vote, yes, but a vote that is right for the long term of
our country.
If the program is done correctly, it provides every possibility for
taxpayers to have an upside. It also provides every possibility that
there will be the oversight that will make sure everything is done with
transparency.
This isn't a $700 billion package. This is a $250 billion package
with contingencies and strings, if we have to go beyond that, strings
the President would
[[Page 23604]]
have to agree to, strings Congress would have to agree to. That is a
much more measured and responsible approach than what was presented by
the Secretary early on--a $700 billion bailout. It is not that anymore.
It is a responsible, bipartisan effort to stand up for the economy of
the United States and for every banker and every small investor and
every saver and every working person who depends on that stability and
depends on their elected officials to do the right thing in the
toughest of times. That is what we promised when every one of us ran
for election. I hope we will deliver it tonight.
I yield the floor and reserve the remainder of my time.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. LAUTENBERG. Mr. President, we are about to take up a vote that is
going to decide whether our country is committed to a 21st-century
transportation system. This is a vote that was considered under the
cloture process earlier this week. This is a decision that is going to
give a real option to travelers from frustrating lines at the airport,
high gas prices at the pump, one that is going to make trains safer for
rail passengers and rail workers, and a decision that will expand
energy-efficient train travel to more of our cities.
Much of the industrialized world has already made such a commitment.
France, China, Japan, Spain, Germany, and Korea are all focused on
connecting major cities of 500 miles or less by fast and efficient
trains. A 210-mile trip from Brussels, Belgium, to Paris, France, takes
only 85 minutes--an hour and 25 minutes--compared to our 3 hours from
New York to Washington, DC. The question is, Why can't we have
something comparable to that in this country? Even now, more people
take the trains between Washington and New York on a regular basis than
those who fly. It is time to bring reliable, fast train service to
other regions of the country as well. The American public wants this
option.
Yesterday, the Secretary of Transportation announced that Americans
are driving less and taking trains more frequently. In fact, according
to Amtrak, the fiscal year that ended yesterday carried over 28 million
riders. That is a record for the sixth straight year.
Our bill provides $13 billion over 5 years for Amtrak and various
States so they can explore their corridor opportunities. This is over a
5-year period for Amtrak and those States, so we can modernize and
expand our network of trains, tracks, and stations.
With all the demand for rail travel, one thing we also have to make
sure of is that trains are safe. Unfortunately, we have been reminded
recently of the acute need for safety improvements.
Last month, America experienced the worst train collision in 15
years. This took place at Chatsworth, CA, on September 12 of this year.
Twenty-five people died and over 130 were injured when two trains
collided in Chatsworth. What made this dreadful crash all the more
tragic was that it might have been avoided had the necessary
investments in technology been made. As we mourn the victims of the
Chatsworth crash, our vote today will demonstrate the seriousness of
our being here, about making sure this can't happen again.
The State of South Carolina, for instance, not very long ago, in
Graniteville, saw the rail catastrophe shown here. In 2005, this
collision resulted in the release of chlorine gas that killed 9 people,
and over 5,400 people were evacuated from the surroundings that day.
In Luther, OK, in August, the community witnessed this massive
fireball after a train derailed and caused ethanol tank cars to
explode. We can't even see the train because it was so engulfed by
flames.
One of the major reasons for train crashes is human error. Our bill
addresses that problem with vital improvements.
Thanks in part to Senators Feinstein and Boxer, our bill mandates
that major railroads use positive train control or PTC systems. This
technology is available today to keep two trains from colliding, to
stop a train if the train is passing a red light, as we saw in
Chatsworth.
Secondly, our legislation limits the daily number of workhours per
railroad employee. Laws now allow them to work 100 hours each and every
week. It is wrong. Our bill is going to change those laws so that
people who operate and maintain our trains get enough rest between
shifts and remain alert on the job.
Third, our bill is going to give inspectors the tools they need to
better oversee the railroad industry's safety practices. The FRA--the
Federal Railroad Administration--could punish infractions with fines of
up to $100,000 when railroad companies disobey our safety laws.
As I mentioned on Monday, this bill is long overdue. Since we last
passed rail safety legislation in 1994, more than 9,000 people have
been killed and more than 100,000 have been injured in train-related
incidents. Since we last passed Amtrak legislation in 1997, gas prices
have tripled. Congestion has grown substantially on the highways. We
have suffered two of the worst years ever for flight delays, and
everyone knows it is time to modernize our Nation's underfunded and
outdated passenger rail system. In doing so, we will help solve many of
today's challenges, such as energy independence, overcrowded highways,
runways that are overcrowded, and global warming. To prevent tragedies
like the Chatsworth crash from ever happening again, we must complete
this bipartisan legislation today and send it to the President for his
signature.
The Senate has already passed our bills on Amtrak and railroad safety
with overwhelming majorities. On this past Monday, 69 of us voted for
cloture for this package, obviously meaning that debate was to be cut
off and get on with business. I urge my colleagues to finish the job
and support this landmark legislation for the sake of America's
travelers.
How much time do we have on our side?
The PRESIDING OFFICER. There is 7\1/2\ minutes.
Mr. LAUTENBERG. I wish to thank some of my colleagues for their vital
support for this critical legislation. This is truly a bipartisan bill.
I wish to take a minute and thank those who worked so hard to put this
package together. First and foremost, I thank Senate majority leader
Harry Reid for his leadership. I also thank a former colleague, Senator
Trent Lott, for his hard work and longstanding commitment to passenger
rail service. From the Commerce Committee, I thank chairman Dan Inouye
and ranking member Kay Bailey Hutchison. I thank her for her
cooperation. It has been terrific working with Senator Hutchison. I
thank Senator Stevens as well, and my subcommittee ranking member,
Senator Smith, and all of our cosponsors, particularly Senators Carper,
Feinstein, Clinton, Menendez, Specter, Schumer, and Warner, for their
dedication and commitment to improving travel in America.
To our partners in the House Committee on Transportation and
Infrastructure, I thank Committee Chairman Oberstar, Ranking Member
Mica, Railroads Subcommittee leaders Chairman Brown and Ranking Member
Shuster. These people in the House were all exceptional champions, and
we thank them.
Everybody I mentioned and many more legislative staff and experts
contributed to this bill. We look forward to it becoming law and making
a difference for our rail industry and travelers everywhere. I note
that it has been several years that this Senator has been working on
this. I am so pleased to see that we will have an opportunity to pass
it.
I thank again my dear friend and colleague, whom we will all miss. He
leaves with our admiration and affection--Senator John Warner. He and I
each served in the war. I don't want to tell which war. It goes back a
long way. But we did serve in the war together, not in the same theater
but we served. He will be missed.
At this point, I yield the floor to the Senator from California, Mrs.
Feinstein.
The PRESIDING OFFICER. The Senator from California.
[[Page 23605]]
Mrs. FEINSTEIN. Mr. President, I wish to begin by thanking Senator
Lautenberg and Senator Hutchison for their work on this bill. It is
very a good bill. I am very proud of it. I am proud of them. I hope all
Members will support it.
This bill does much to benefit rail. I deeply believe that rail has a
future. My own State, California, has a $10 billion bond issue on the
ballot this November to begin the funding of a high-speed rail down the
center of California. So rail can be very important in the future.
The bill has many good points. I want to concentrate on just one
thing and what I just learned from the National Transportation and
Safety Board. That one thing is that this bill would give the rail
administration the ability to prohibit cell phone use.
I would like the chairman and the ranking member to know what I just
learned through an NTSB press conference. The engineer on the Metrolink
train, the day of the accident, from about a quarter of 7 to a quarter
of 9 in the morning, as he was an engineer on the train, sent and
received 45 text messages on his cell phone in a little more than an
hour. In the afternoon, when he was on duty from 2 p.m. to about 3:30,
he sent and received 12 messages on his cell phone. One of them was 22
seconds before the accident. With this kind of cell phone use while an
active engineer on a Metrolink train right around the time of an
accident, you can see the kind of problem it is. There is no second set
of eyes on this train. So this National Transportation Safety Board
press release this afternoon is a revelation.
This cannot be happening on other trains. A great deal of our track
in California is single track. It has both freight and passenger rail
on it, sometimes in opposite directions. To have an engineer in an hour
and 15 minutes sending or being part of 45 text messages on a cell
phone is not what an operating engineer should be doing on a train.
I thank the chairman. He has done a great job. My pal Senator
Hutchison has done a great job. This is a bill that will stand the test
of time. It is an important bill for Amtrak, for the rail
administration, and for rail safety and positive train controls.
I thank them all for their work and yield the floor.
The PRESIDING OFFICER. The Senator from Texas has 4 minutes
remaining.
Mrs. HUTCHISON. Mr. President, is there time left on the majority
side?
The PRESIDING OFFICER. A minute and a half on the majority side.
The Senator from New Jersey.
Mr. LAUTENBERG. Mr. President, again, I rise to reiterate the fact
that this is a chance to make a huge difference in the way we travel in
this country. We know you cannot get there from here if you get on the
roads, whether they be major highways or streets. Airplanes are ever
more delinquent in their ability to deliver service on time. So this is
a chance for everybody to step up and declare we are going to have a
refined, up-to-date, modern system that enables us to carry the
passenger load that is available for us.
I ask my colleagues to vote for this legislation and hope we will see
its passage very shortly.
Mr. President, I yield any time remaining.
The PRESIDING OFFICER. The Senator from Texas.
Mrs. HUTCHISON. Mr. President, I want to reiterate something the
Senator from California mentioned, and that is, the rail safety part of
this bill is actually a bill that was negotiated separately from the
Amtrak bill. We put them together because time was of the essence.
After that terrible crash in California, I think it spurred us to be
able to put these together and go forward. The positive train control
that will be required for every rail carrier by the year 2015 is going
to also have a major impact on safety and stop the crashes that are
preventable that we have seen in the past. So I think there are a
number of rail safety issues that are so important here that can make a
difference.
At this time, Mr. President, I wish to yield up to 2 minutes to the
Senator from Virginia.
The PRESIDING OFFICER. The Senator from Virginia.
Mr. WARNER. Mr. President, I thank my good friend and colleague from
Texas. And I thank my good friend, the senior Senator from New Jersey,
for his gracious remarks. I also commend the cooperation of both of
these managers, together with Senators Webb, Cardin, and Mikulski, in
bringing together in this bill the lifeline of the Metro system in the
Nation's Capital. We are a region, and we speak for the District of
Columbia, as spokesmen tonight, and for the States of Maryland and
Virginia, all of which are essential partners in this system which
supports this institution, the Congress.
RAILROAD SAFETY
Mrs. BOXER. Mr. President, I rise today to address the railroad
safety legislation, H. Res. 1492 providing for agreement by the House
of Representatives to the Senate amendment to the bill, H.R. 2095, with
an amendment. First, I must emphasize the importance of strengthening
our safeguards for railroads, to protect the lives and safety of our
citizens. We have just been reminded of how critical it is for us to
pay attention to this issue by the tragedy in my home State of
California on September 12, 2008. On that day, a Metrolink train
crashed head on into a Union Pacific freight train in Chatsworth,
northwest of downtown Los Angeles, killing 25 people and injuring at
least 135 in the most deadly commuter rail accident in modern
California history, and one of the worst rail accidents in recent U.S.
history. The families of all of those killed or injured in that
accident are in our thoughts and our prayers.
I also would like to enter into a colloquy one aspect in this
legislation, the provisions entitled the ``Clean Railroads Act of
2008,'' with my good friend, Senator Lautenberg, the distinguished
chairman of the Commerce, Science, and Transportation Committee's
Subcommittee on Surface Transportation and Merchant Marine
Infrastructure, Safety, and Security, and the lead author of this
legislation.
Mr. Chairman, this legislation makes clear that any solid waste rail
transfer facility must comply with all applicable Federal and State
requirements, both substantive and procedural, including judicial and
administrative orders and fines, respecting the prevention and
abatement of pollution, the protection and restoration of the
environment, and the protection of public health and safety, including
laws governing solid waste, to the same extent as required for any
similar solid waste management facility, as defined under the Solid
Waste Disposal Act, or SWDA, that is not owned or operated by or on
behalf of a rail carrier. There is an exception in section 604 of this
bill, which creates a new section 10909 of title 49 of the United
States Code allowing the Surface Transportation Board to issue a land-
use exemption for a solid waste rail transfer facility operated by or
on behalf of a rail carrier if the Board finds that a State, local, or
municipal requirement affecting the siting of such facility meets
certain specific criteria.
For these purposes, the bill defines several terms, including
``commercial and retail waste,'' ``construction and demolition
debris,'' ``household waste,'' ``industrial waste,'' ``institutional
waste,'' ``municipal solid waste,'' and ``solid waste.'' The bill
explicitly excludes hazardous waste regulated under subtitle C of the
SWDA, mining or oil and gas waste from being covered under this law and
leaves in place the structure under which these substances are
currently regulated.
Mr. Chairman, is my understanding correct that, by clarifying that
any solid waste rail transfer facility must comply with all applicable
Federal and State requirements, both substantive and procedural, in the
same manner as any other solid waste management facility as defined
under the SWDA, and by expressly excluding such hazardous waste, and
mining or oil and gas waste, from this law, that this legislation
ensures that the Environmental Protection Agency's and States'
authorities dealing with hazardous waste, mining
[[Page 23606]]
or oil and gas wastes are not impacted by this law or by the
jurisdiction of the Surface Transportation Board?
Mr. LAUTENBERG. Mr. President, the distinguished Chairman of the
Committee on Environment and Public Works, and my colleague as a senior
member of the Committee on Commerce, Science, and Transportation, is
correct. This legislation ensures that solid waste rail transfer
facilities must fully comply with the substantive and procedural
requirements in State and Federal environmental and public health and
safety laws, including all permitting requirements, and generally
allows the Surface Transportation Board to issue land-use exemptions so
that the Board may continue to be the single agency to guide our
country's policies concerning the placement of railroad facilities,
which enables a unified national rail system and promotes energy-
efficient interstate rail transportation. In addition, the
distinguished chairman is correct that the legislation does not
diminish the authority of the Environmental Protection Agency or the
States with respect to hazardous wastes, mining or oil and gas wastes.
This legislation also does not affect in any way the application of the
statutory definition of solid waste under the SWDA. This legislation
also does not intend to affect any preexisting authority to respond to
imminent hazards under Sections 7002 and 7003 of the RCRA. Lastly, this
bill ensures that solid waste rail transfer facilities, as defined in
this legislation, obtain the State permits that any other similar solid
waste management facility is required to obtain and comply in full with
State law, as described in Sections 603 and 604 of Division A of the
bill, and this bill affirms the States' traditional police powers to
require rail carriers to comply with State and local environmental,
public health, and public safety standards as described in Section 605
of Division A.
Mr. LEVIN. Mr. President, I support H.R. 2095, the Amtrak
reauthorization bill, which was passed by the House of Representatives
and is expected to pass the Senate today. I believe the economic
strength of our Nation and the State of Michigan is dependent on our
transportation infrastructure. Reliable passenger rail service is an
important component of that infrastructure.
I have been a strong supporter of Amtrak and have voted repeatedly to
give Amtrak the funds it needs to continue to operate safely and
effectively. I am a cosponsor of the Passenger Rail Investment &
Improvement Act which reauthorizes and increases funding for Amtrak,
the national passenger rail system. A version of that bill is included
in the package we are voting on today.
Also included in this legislation are important railroad safety
improvements designed to avoid tragic rail crashes such as the recent
horrible collision between a commuter train and a freight train that
killed 25 people in California. Federal investigators have said that a
collision warning system could have prevented that crash. This
legislation would require that new technology to prevent crashes be
installed in high-risk tracks. In addition, it would limit the amount
of hours train crews can work each month. Both the funding and the
safety components of this bill are urgently needed to ensure the
viability of our nation's passenger rail transportation system in the
years to come.
A healthy and adequately funded Amtrak benefits Michigan and the
nation as a whole. Amtrak service in Michigan includes the Pere
Marquette which provides daily service between Grand Rapids and
Chicago, the Wolverine which provides daily service between Pontiac/
Detroit and Chicago, and the Blue Water which provides daily service
between Port Huron and Chicago. Amtrak gives travelers and commuters
more transportation options, relieves crowding on highways and in
airports, and reduces oil consumption and greenhouse gas emissions.
This legislation would strengthen Amtrak by authorizing $13 billion for
Amtrak over 5 years and require oversight, management, and accounting
improvements.
This legislation is long overdue as Congress has not passed Amtrak
legislation since 1997. Unfortunately, in 2005, bipartisan attempts by
the Senate to improve and modernize Amtrak's operations were blocked by
Republican leadership in the House of Representatives. That same year,
President Bush actually proposed sending the railroad into bankruptcy,
and in other years he has proposed killing off Amtrak service by
underfunding the railroad. In the interim, Amtrak has been muddling
through with barely enough funds to keep operating and certainly not
enough funding to significantly improve service or expand into new
towns and cities. This bill would address past neglect and improve our
Nation's passenger rail system.
An improved national passenger rail system means people who are
accustomed to commuting in their cars will be able to rely on train
service, reducing congestion and stress for those who choose to
continue to drive and offering an alternative for those who would
prefer to take the train. Those who take the train will be able to
relax while someone else does the driving. Improved Amtrak service also
provides people who do not drive or do not have access to cars with a
viable transportation alternative, especially for medium-distance
trips. Rather than relying on friends and family to drive them from
place to place, these people will be able to depend on Amtrak for their
middle-distance transportation needs. This is especially important for
elderly individuals who were once accustomed to driving but, because of
age or illness, have become unable to drive safely. For example, two
grandparents who live in Michigan and who no longer drive will be able
to more easily visit their grandchildren in Chicago because of Amtrak's
improved service in Michigan. Amtrak's train service is important to
the cities and communities of Michigan because it reduces congestion on
the roads, reduces pollution and commuting stress, and because it
improves middle-distance transportation alternatives for the citizens
of Michigan.
Also important for Michigan and other States, this legislation
establishes a $1.5 billion grant program for the construction of high-
speed rail projects in any of the 11 designated high-speed rail
corridors, one of which is the Midwest High-Speed Rail Corridor, also
known as the Chicago hub corridor. This grant program would assist
Michigan in the development of its portion of the Midwest Regional Rail
Initiative which includes making investments in high-speed rail
capabilities in the Chicago-Detroit corridor.
I support this bill because it provides a much needed boost to Amtrak
and makes and important commitment to preserving and strengthening our
national passenger rail system.
Mr. CARPER. Mr. President, this bill represents years of hard work
and partnership between Members of Congress from both sides of the
aisle and across the country. I am so pleased that we will finally be
able to send it to the President for his signature.
Amtrak has enjoyed a huge resurgence in recent years. Infrastructure
has been repaired, ontime performance has surpassed the airlines, and
people are coming back to the train.
When the final numbers for fiscal year 2008, which ended yesterday,
are calculated, ridership is expected to reach over 28.7 million
passengers and revenues over $1.7 billion for the year. That represents
an increase of almost 3 million riders and $200 million in revenues
over the previous year.
Passing this bill today will capitalize on this enthusiasm for
passenger rail and will show that Congress hears the demand for more.
Today, Amtrak operates approximately 44 routes over 22,000 miles of
track, 97 percent of which is owned by freight rail companies. Those
freight tracks are increasingly congested and not built with modern
passenger rail in mind. Where the Federal Government does own the
tracks, we have failed to maintain them as we should.
Amtrak was created in 1970 after the freight railroads asked the
Federal Government to take over passenger rail service because they
were losing so much money.
[[Page 23607]]
Some in the Nixon administration believed they were temporary
caretakers for a railroad that would be dead within a few years. So
there was little effort to repair the rails or cars or to create a true
modern passenger rail system.
But Amtrak limped along for decades. In spite of the lack of
commitment at the Federal level, the American people were unwilling to
give up on rail. Amtrak was a lifeline for people in remote rural
communities that were not served by airports and for business and other
travelers in the Northeast corridor.
Then, starting in the late 1990s, interest in rail began to grow.
People got tired of sitting in traffic or waiting at airports for
delayed flights. Local governments realized rail stations often
increased property values and attracted people to their community.
New leadership at Amtrak put the focus on repairing old cars and
rail, leading to smoother, ontime travel.
Still, Washington was slow to catch on. President Bush proposed no
funding for Amtrak for years and even suggested putting the railroad
into bankruptcy and letting a judge determine what to do with it. He
also failed to make bipartisan appointments to the Amtrak Board,
leaving it without a quorum for a time.
Congress, however, recognized the importance of investing in age rail
infrastructure and joined with Presidents David Gunn and, later, Alex
Kummant to increase the Federal investment.
But without an authorization, like the bill we will pass soon, there
was no clear, consistent direction. Amtrak had to wait for the yearly
spending bills to get funding and a sense of where Congress wanted that
investment to go.
Passenger Rail Investment and Improvement Act--this legislation
changes that. It authorizes Amtrak through 2013. It also represents a
fundamental shift away from the Federal Government providing operating
support more toward providing capital investment in rail.
The Passenger Rail Investment and Improvement Act creates a funding
model for new rail infrastructure much like the one we have used so
successfully for highways and airports.
Right now, State and local governments have to shoulder all the costs
if they want to build or expand passenger rail within their boundaries.
When I was Governor of Delaware, we might consider several approaches
to relieving congestion along a corridor. We would quickly realize that
if we built or expanded a roadway, the Federal Government would pay 80
percent of the cost. If we built a transit line, we could secure around
50 percent of the cost from the Federal Government.
But if we chose to invest in intercity passenger rail--even if it was
the most effective, cheapest option--the Federal Government would
provide no support at all. I have to imagine that this policy has led
more than one State to choose the wrong project.
Under the new model in the legislation before us today, the Federal
Government could fund up to 80 percent of the cost of new passenger
rail service. With this increased Federal commitment comes a
requirement for renewed State commitment.
The Passenger Rail Investment and Improvement Act establishes
advisory commissions for the Northeast corridor and State-supported
routes with representatives from Amtrak, the States along the route,
and the Federal Railroad Commission.
These commissions will provide advice and oversight of the corridor
and determine the proper costs and access fees for the routes they
oversee.
I understand that some of my colleagues expressed some criticism for
Amtrak on Monday. Just like them, I would like to see Amtrak perform
better. That is why I am happy that this bill includes so many reforms,
which I will get into in a minute. But the criticisms issued on Monday
deserve some attention.
It is important to recognize that we have spent more than a
generation watching passenger rail infrastructure fall into disrepair
and reducing or canceling train service across the Nation.
Some are happy to utilize this neglect, and the inevitable reduction
in the quality of train service, against the railroad. That very
neglect becomes an excuse for some elected officials to further neglect
and eventually abandon passenger rail altogether.
At the same time, I have always found it interesting how many of our
constituents are willing to put up with trains that come infrequently,
at inconvenient times, and move slowly. It shows that even a train that
sometimes doesn't run as well as it should is needed in an era of
extreme traffic congestion and high oil prices.
The junior Senator from Alabama spoke against this bill on Monday,
indicating that he did not think Amtrak would ever work in his State.
He mentioned that the train from Birmingham to Washington, DC, came but
once a day, moved slowly, and cost $440 round trip. The Crescent train
does, in fact, come infrequently and move more slowly than it should.
And there are parts of this bill that will address both issues--from
the Federal-State partnership to invest in new rail corridors to the
reevaluation of the route system to the language ensuring that
passenger trains can move faster on freight tracks.
But I asked a member of my staff to look into the cost of this train
and found two interesting pieces of information. First, if you buy a
ticket with a week's notice, a round-trip ticket from Birmingham to DC
is not $440 but $286. And with 2 week's notice, it goes down to $228.
The second interesting fact that I learned about the train from
Birmingham to Washington was today's train is sold out.
My colleague also mentioned that his constituents are spending a
larger percentage of their income on gasoline than other Americans. The
high cost of gasoline is a burden we are all facing and one that
deserves our utmost attention and focus. But walking away from Amtrak
and other alternatives to driving will only make the situation worse.
A report called ``Driven to Spend,'' written by the Surface
Transportation Policy Project and the Center for Neighborhood
Technology in 2006, found that metropolitan areas with fewer
transportation options tended to impose higher transportation costs on
their residents.
For example, at a time when gas was around $2.50 per gallon, the
average family in the Wilmington-Philadelphia area spent $3,381 less
per year--or 5 percent less of their income--than a family in Houston.
We should work together to offer all of our constituents more
convenient, cheaper transportation options that includes roads,
passenger rail, and transit.
As I alluded to earlier, the Passenger Rail Investment and
Improvement Act includes several reforms aimed at reducing Amtrak's
operating costs and creating a more efficient system.
Amtrak's long-distance trains would be subject to a review process
based on new standards for financial performance, ontime performance,
and customer satisfaction, laid out by the Federal Railroad
Administration. Based on those standards, Amtrak will be required to
create and implement performance improvement plans for the 5 long-
distance routes with the worst performance.
In future years, the remaining 10 long-distance routes would undergo
the same restructuring process.
Additionally, this legislation would look at the cause of poor ontime
performance outside of the Northeast corridor. If it is found that the
problem is caused by a freight railroad, the Surface Transportation
Board is given new authority to address the issue.
The Passenger Rail Investment and Improvement Act also allows the
Federal Government to explore competition for providing passenger rail
service in a responsible way. One provision in the bill permits freight
railroads to bid to operate some passenger trains that run on their
tracks.
Another provision allows a private entity to bid to provide service
on a corridor, though Congress would have to act again before that bid
could be acted on.
Moreover, States wishing to use operators other than Amtrak for
State-supported services would be permitted to
[[Page 23608]]
do so and would have access to Amtrak facilities and equipment for that
particular route.
This important bill has been combined with another very important
bill, the Rail Safety Improvement Act of 2008. This is the first major
reform of the rail safety program since the Federal Railroad Safety
Authorization Act expired in 1998.
This bill requires railroads to install positive train control
systems by 2015. These systems are designed to prevent train
derailments and collisions, like the one that occurred in southern
California last month, taking the lives of 25 people.
The package would also limit the amount that certain rail employees,
such as locomotive engineers, can work to 276 hours a month. Current
law allows railroads to require more than 400 hours of work per month,
or approximately 13 hours every single day.
This package--the Amtrak reauthorization and rail safety bill--is
truly bipartisan and shows that Congress is catching up to our
constituents. Americans have been pleading for more rail service for
years, and their need only increased with the recent spike in oil
prices.
A recent study by Reconnecting America finds that 30 percent of those
living within half a mile of a rail station use it regularly.
Unfortunately, only 1 in 20 people lives that close to a rail station.
With the passage of this bill, Congress is showing that we understand
the need for convenient, reliable passenger rail service across this
country, and we are renewing our commitment to giving Americans
affordable alternatives to driving.
With a modern passenger rail system, we can get people out of
traffic, prevent a few trips to the gas station and reduce the amount
of pollution in our air. Not bad for one bill.
Mr. WARNER. Mr. President, I am pleased to support the Rail Safety--
Amtrak package under consideration today.
Of highest importance to me though is a much-needed authorization for
the Washington Metropolitan Area Transit Authority, WMATA, the metro
system that probably brought a majority of our staffers to work this
morning.
I thank the many Members with whom I worked to obtain passage of this
authorization legislation, leading with my area colleagues, Senators
Webb, Cardin, and Mikulski. I also thank the Commerce Committee
leadership of Senators Lautenberg and Hutchison and the leadership of
the Homeland Security and Government Affairs Committee, Senators
Lieberman and Collins.
WMATA has been one of the greater metropolitan area's most successful
partnerships with the Federal Government.
In 1960, President Eisenhower signed legislation to provide for the
development of a regional rail system for the Nation's Capital and to
support the Federal Government. Since 1960, Congress has continually
reaffirmed the Federal Government's commitment to Metro by passing
periodic reauthorizing bills.
Over 50 Federal agencies in the National Capital region are located
adjacent to Metro stations. Federal agencies rely on WMATA to get their
employees to and from the workplace year-round, in all types of
weather.
Based on Metro's 2007 rail ridership survey, approximately 40 percent
of respondents identified themselves as Federal workers who ride
Metrorail to work.
We are talking about thousands of cars taken off the major roadways
each day because of our area's metro system.
The Railway Safety--Amtrak bill includes funding over 10 years for
capital and preventative maintenance projects for WMATA. This language
was added by voice vote to the Amtrak bill by Congressman Tom Davis
during the House's Amtrak debate this summer.
This critical investment will help provide for much-needed
improvements to this stressed transit system. Projects such as station
and facility rehabilitation, tunnel repairs, and addition of new rail
cars and buses will help ease congestion during peak hours.
This legislation, which would authorize much-needed Federal funding,
contingent on State and local dedicated matches, recognizes how vital
Metro is to the region and the Federal Government. Let me repeat: these
dollars will be matched by the Commonwealth of Virginia, Washington,
DC, and the State of Maryland.
Such legislation is integral to the well being of the area's
transportation system, as we struggle to address traffic congestion,
skyrocketing gas prices, global climate change, and the local quality
of life concerns.
From its inception, the Federal Government has played a significant
role in funding the construction and operation of the Metrorail system.
I hope this Congress will continue to show that support.
Ms. MIKULSKI. Mr. President, I rise in strong support of the Federal
Railroad Safety Improvement Act. This bill is long overdue. It
authorizes funding for Amtrak and improves rail safety. It also
includes the National Capital Transportation Amendments Act, which
authorizes funding for the Washington Metro system--America's Metro.
More funding for America's Metro is important for several reasons.
First, Federal employees, visitors to our Nation's Capital, and
residents all depend on Metro. Mr. President, I don't know how your
staff gets to work, but more than half of mine take Metro. In fact,
Federal employees make up over 40 percent of commuters and nearly half
of all Metro stations are located at Federal facilities. If you
remember, Metro also evacuated everyone during September 11. Metro
makes it easier for visitors from across the country to learn about our
Nation's history and be a part of history. During Presidential
inaugurations, funerals, celebrations, and demonstrations on the
National Mall, Metro extends its hours. Metro also helps working
families eliminate costly bills at the gas pump. During this period of
high gas prices, my constituents are choosing Metro and leaving their
cars at home. Because of this, Metro has seen recordbreaking ridership.
Second, the Washington metro area must expand its transportation
infrastructure to handle base realignment and closure, BRAC, growth. In
Maryland, we are planning for 40,000 new jobs. I know Virginia is
planning for BRAC growth too. The Metro funding in this bill will BRAC-
ready our region's largest transit system.
Third, it is estimated that Metro needs $11 million for capital
improvements over 10 years. The authorized and dedicated funding in
this bill will help Metro meet these needs. Metro will be able to grow
as the region grows instead of cutting service.
Fourth, Metro is safe for the commuter and environmentally sound. We
all know commuting in the region has become increasingly difficult. I
have been commuting to Washington from Baltimore for 31 years. I have
to budget an hour and a half to 2 hours to get to work. There always
seems to be some tie-up on the highway and increasing levels of road
rage. Driving a car in the National Capital Region is serious business
whether you are on the Capital Beltway, Route 50, or Central Avenue.
Yet I see many drivers multitasking at high speeds. Drivers are talking
on cell phones, sending text messages, and putting on makeup. This
Metro funding will make our lives a little safer and saner and help the
environment by reducing air pollution.
Metro means more than just transportation. It means residents and
visitors to our Nation's Capital can live, work, worship, and play
without ever getting in a car. It means more jobs and access to jobs
and improved neighborhoods and economic development.
I commend Senator Cardin for his hard work and leadership on this
Metro bill. I thank Senators Warner and Webb for partnering with
Senator Cardin and me to get this done. Senator Warner and I have been
regional allies for many years. I am going to miss working with him. I
thank Majority Leader Reid and Senator Lautenberg for helping us bring
the Metro bill to the Senate floor and their hard work on the
underlying bill. I urge all my
[[Page 23609]]
colleagues to get on board and vote for this bill.
Mr. KYL. Mr. President, in what has become a frequent occurrence in
this Congress, the majority has unnecessarily combined two bills--one
that I support and one that I don't--in order to ensure quick passage
of both bills. As a result, I must weigh the two bills together. Of
course, I want to improve rail safety. However, I cannot support a rail
safety bill when it is combined with a bill that is essentially a $13.1
billion taxpayer subsidy to Amtrak.
The need for rail safety was recently highlighted after the tragic
rail accident in California on September 12 that killed 25 people.
Clearly, we need to ensure that Americans are safe traveling to work
and moving the Nation's freight. This bill does augment rail safety by
revamping the Federal Railroad Administration and providing over $1.6
billion for rail safety programs. It also mandates many much needed
safety changes, including: installing positive train controls; amending
the hours of service requirements so operators are not overworked;
requiring a risk reduction program, which includes a technology
implementation and fatigue management for all Class I and rail carriers
with poor safety records; requiring certain mandatory training; and
making changes to grade crossing safety management practices. A similar
version of the rail safety legislation passed the Senate by unanimous
consent on August 1. I suspect that if the majority were to allow a
vote on final passage of the rail safety bill, it would easily pass the
Senate.
The majority, however, decided to take a different route. Instead of
quickly passing the final version of the rail safety legislation by
unanimous consent, it attached the bill to a more controversial piece
of legislation--the Amtrak reauthorization bill. This maneuver was
obviously done so that the Amtrak reauthorization bill would pass.
Unfortunately, the Amtrak reauthorization bill is riddled with bad
policy. Since its inception in 1971, Amtrak has required over $30
billion in taxpayer subsidies. According to the Congressional Research
Service, Amtrak runs over a billion dollar deficit each year, and
requires Federal assistance to cover operating losses and capital
investment. Without a yearly Federal grant to cover operating losses,
Amtrak would not survive as currently configured. This bill extends
Amtrak's dependency on the Federal Government by authorizing $13.1
billion for Amtrak through fiscal year 2013, more than double the
amount authorized in the previous Amtrak bill that expired in 2002.
Rather than keep Amtrak dependent on taxpayer support, I believe the
rail carrier should modify its financial strategy to become self-
sufficient and profitable.
This bill also includes five new provisions that expand the Davis-
Bacon Act requirements. These provisions would force Amtrak to ensure
that laborers and mechanics employed by contractors and subcontractors
in construction work financed under this bill are paid wages no less
than the prevailing wages on similar construction projects. The Davis-
Bacon requirement seems harmless enough, but in practice, forcing
contractors to pay their laborers a wage standard, which many argue is
set on a flawed wage determination, only raises construction costs for
that locality. Why would American taxpayers want to set a floor on the
cost of construction if it can be done more efficiently and
inexpensively? Again, this is just bad policy.
It is with regret that I will be forced to register a ``no'' vote on
this bill.
Mr. BOND. Mr. President, I regrettably do not support H.R. 2095. The
bill we have before us packages together three bills into one vote with
no amendments dealing with Rail Safety, Amtrak, and capital and
preventive maintenance grants for the Washington Metropolitan Area
Transit Authority, WMATA.
The Rail Safety provisions of the package by themselves would have
had my support. I fully support efforts to address hours of service
requirements for train operators and positive train control for our
freight and passenger railroads. However, I remain concerned about both
Amtrak provisions and the WMATA portion of the full package that we are
voting on tonight. The majority leader has filled the amendment tree so
that no amendments can be offered on this package, and we are faced
with an up or down vote on some very key funding areas under the
jurisdiction of Transportation Appropriations.
This extra spending will place a strain in excess of what our current
budget allows. I understand the need to have passenger rail service as
an alternative mode of transportation. However, I feel strongly that
Amtrak should undertake the reforms necessary to be worthy of taxpayer
dollars by tying funding to certain expectations and benchmarks.
As the Appropriations Subcommittee ranking member for the
Transportation and Housing and Urban Development, THUD, I am not given
enough of an allocation to meet all of our funding needs. This
authorization package provides levels of appropriations that can not be
realized, including both Amtrak and WMATA, and will further strain our
subcommittee funding decisions.
Regrettably, the Amtrak provision in this bill offers none of the key
reforms in Amtrak's governance or operations that link resource
allocation to consumer demand. With no reforms and an authorization
level of $13.3 billion over the next 5 years, I find it hard to support
these levels when the money will not be there.
With regard to funding for WMATA, the bill includes an authorization
level of $1.5 billion over 10 years for capital and maintenance
projects. These grants would be over and above the grants for which
WMATA is otherwise eligible. The authorized grants would not be
available to any other jurisdiction. Although WMATA should be
encouraged to make necessary reforms in its governance and financing,
such encouragement should not require the creation of an entirely new
Federal funding program which excludes other jurisdictions which have
long since taken such prudent steps to upgrade and maintain their
existing capital.
Mr. INOUYE. Mr. President, I fully support passage of H.R. 2095, a
bill that will help move America's railroads into the 21st century. The
reauthorizations of the Federal rail safety programs and Amtrak are
long overdue and this bill will give direction to Amtrak and the
Federal Railroad Administration, FRA, to help them both better
accomplish their missions. Given the higher price of oil, continuing
climate change concerns, and our challenging economic times, it is more
important than ever that we ensure that our Nation's passenger and
freight rail systems are adequately prepared to safely accommodate our
transportation needs.
Safety is a key element if we are to continue to expand our Nation's
use of trains. H.R. 2095 will improve railroad safety and provide the
resources we need to develop our rail network into the first-class
system our Nation deserves. Key improvements include reforming the
hours of service requirements for train and signal workers, requiring
risk-based safety programs for large railroad companies, mandating the
installation of positive train control systems and other safety
technology, and encouraging and funding grade crossing and pedestrian
safety and trespasser prevention programs.
This bill will also encourage the further development of passenger
rail corridors, provide incentives for Amtrak to operate more
efficiently, and strengthen the relationship between Amtrak and the
States in which it operates. These improvements will help Amtrak
further increase its ridership, which has reached record levels this
year and last, and will allow Amtrak to better serve its customers. I
believe this bill will further fortify Amtrak as an important,
necessary, and viable option in our nation's transportation landscape.
I congratulate Senator Lautenberg for crafting his railroad safety
and Amtrak bills, working hard to move them through the Senate, and
developing this bipartisan compromise with the House. I call on my
colleagues in the Senate to pass H.R. 2095 as soon as possible and send
it to the President for his signature.
Mrs. BOXER. Mr. President, I want to take a moment to express my
gratitude to Chairman Inouye and Senator
[[Page 23610]]
Lautenberg for their support and efforts in working to pass this
important piece of rail safety legislation, the Federal Railroad Safety
Improvement Act.
As many of my colleagues know, southern California and the community
of Chatsworth suffered the worst train collision in California's modern
history last month when a Union Pacific freight train and a Metrolink
commuter train collided head on during rush hour.
This tragedy claimed 25 lives, and injured 135 people, many of whom
have sustained lifelong injuries.
Last month's deadly Metrolink accident made clear the urgent need to
fix our rail system and ensure the safety of passengers.
While Senator Feinstein and I will continue to push for the rapid
deployment of positive train control technology, this legislation
includes important safety provisions that will immediately help improve
rail safety and help prevent accidents.
I am pleased this legislation included grant funding for positive
train control systems, anti-fatigue measures for train crews, increased
penalties for violators, and grant funding for grade crossings.
In addition to these safety measures, this bill also provides much
needed funding for Amtrak and authorizes more than $1.5 billion in
grants to States to fund the construction of high-speed rail projects
in designated corridors, including a California corridor.
This is an important piece of legislation and I thank my colleagues
for their support. I urge the President to take action immediately to
sign this bill into law.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. LAUTENBERG. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The yeas and nays were ordered.
Mr. REID. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Under the previous order, the motion to concur with an amendment is
withdrawn.
Under the previous order, the question occurs on agreeing to the
motion to concur in the House amendment to the Senate amendment to H.R.
2095.
The yeas and nays have been ordered.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden) and
the Senator from Massachusetts (Mr. Kennedy) are necessarily absent.
The PRESIDING OFFICER (Mr. Salazar). Are there any other Senators in
the Chamber desiring to vote?
The result was announced--yeas 74, nays 24, as follows:
[Rollcall Vote No. 210 Leg.]
YEAS--74
Akaka
Alexander
Baucus
Bayh
Bennett
Bingaman
Boxer
Brown
Byrd
Cantwell
Cardin
Carper
Casey
Clinton
Cochran
Coleman
Collins
Conrad
Corker
Cornyn
Crapo
Dodd
Dole
Domenici
Dorgan
Durbin
Feingold
Feinstein
Grassley
Hagel
Harkin
Hatch
Hutchison
Inouye
Isakson
Johnson
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Lugar
McCaskill
McConnell
Menendez
Mikulski
Murkowski
Murray
Nelson (FL)
Nelson (NE)
Obama
Pryor
Reed
Reid
Roberts
Rockefeller
Salazar
Sanders
Schumer
Smith
Snowe
Specter
Stabenow
Stevens
Tester
Warner
Webb
Whitehouse
Wicker
Wyden
NAYS--24
Allard
Barrasso
Bond
Brownback
Bunning
Burr
Chambliss
Coburn
Craig
DeMint
Ensign
Enzi
Graham
Gregg
Inhofe
Kyl
Martinez
McCain
Sessions
Shelby
Sununu
Thune
Vitter
Voinovich
NOT VOTING--2
Biden
Kennedy
The motion was agreed to.
Mr. LAUTENBERG. Mr. President, I move to reconsider the vote.
Mr. LEAHY. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from Connecticut is recognized.
____________________
UNITED STATES-INDIA NUCLEAR COOPERATION APPROVAL AND NONPROLIFERATION
ENHANCEMENT ACT
The PRESIDING OFFICER. Under the previous order, the Senate will now
resume consideration of H.R. 7081, the United States-India agreement.
Amendment No. 5683
There is 2 minutes equally divided prior to a vote on the Bingaman-
Dorgan amendment No. 5683.
The Senator from Connecticut is recognized.
Mr. DODD. Mr. President, I ask unanimous consent that the 60-vote
threshold on the Dorgan-Bingaman amendment No. 5683 be vitiated, unless
the yeas and nays are ordered.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. DORGAN. Mr. President, the amendment I and Senator Bingaman have
offered is to the India nuclear agreement. We both feel it is a flawed
agreement that would result in the production of additional nuclear
weapons on this planet, exactly the last thing we need. But I
understand--and I think Senator Bingaman understands--that this Senate
will likely approve this agreement by a wide margin this evening.
Our amendment is relatively simple. It says that if India tests
nuclear weapons, this agreement is nullified and we work to try to shut
off supplies from the other supplier groups. The last thing we ought to
allow is to have India begin testing nuclear weapons without
consequence to the agreement that has been negotiated with India. Once
again, let me point out that this agreement, I believe, will result in
the production of additional nuclear weapons on this planet--the last
thing we need.
Our amendment is a very important amendment dealing with the
prohibition of nuclear testing, and we hope our colleagues will be
supportive.
Mr. CASEY. Mr. President, I want to convey some brief remarks
regarding my views on the United States-India civil nuclear cooperation
agreement. I cast a ``yes'' vote on this agreement, but not without
some serious reservations regarding the likely damage this agreement
will do to the global nuclear nonproliferation regime.
I had the opportunity to visit India earlier this year, spending a
day meeting senior government leaders in New Delhi and another day in
Hyderabad, where I witnessed first hand the dynamic entrepreneurism
that has recently transformed India into an economic powerhouse, albeit
with still extreme poverty. Let me be clear: The United States and
India, sharing a common commitment to democracy and personal freedoms,
are natural allies. I congratulate President Bush for building upon the
initial steps taken by his predecessor, President Clinton, in nurturing
closer ties between our two great nations and laying the building
blocks for an enduring strategic partnership.
India's exclusion from global trade in civil nuclear energy, a direct
consequence of its 1974 nuclear weapons test utilizing equipment and
materials imported for a civilian energy program, represented a
continuing thorn to an otherwise blossoming United States-Indian
relationship. Right or wrong, it was always the United States that was
viewed as the leading advocate of the firewall between India and global
nuclear trade--even though India never signed the Nuclear Non-
Proliferation Treaty, NPT. So I understand why a resolution to this
issue was necessary if the United States and
[[Page 23611]]
India were to achieve a genuine partnership that could endure in coming
decades.
My strongest criticism of the United States-India nuclear cooperation
agreement is that, in exchange for a historic exception to the
principle that those states that refuse to abide by the Nuclear Non-
Proliferation Treaty cannot enjoy the fruits of global civilian nuclear
trade, the United States did not ask enough in return from the Indian
Government. We could have pressed New Delhi to sign the Comprehensive
Test Ban Treaty and forswear all future nuclear weapons tests. But we
did not. We could have urged New Delhi to agree to a national
moratorium on production of nuclear fissile material, linking that
moratorium to a similar pledge by Pakistan. But we did not.
I worry over the message this agreement sends to states like North
Korea and Iran. Are their leaders to believe that, with the passage of
time, one day the international community will also accept their
nuclear weapons programs as a de facto reality and move to accommodate
such programs? How do we convince the international community to
demonstrate solidarity against Iran's violations of the NPT while
giving a pass to India's refusal to abide by this very same treaty? Of
course I am not equating the two states--India is a democratic regime,
a friend of the United States, and a force for stability in the world.
There is no comparison. But I am concerned when we begin to divide the
world into ``good'' proliferators and ``bad'' proliferators--instead,
we need to send the message that all nuclear proliferation harms our
security and increases the odds that a nuclear weapon will one day be
used and kill millions.
Nevertheless, at every step of the process over the last 3 years,
administration officials often appeared excessively sensitive to the
need to smooth over domestic political concerns in India while
downplaying concerns expressed by nonproliferation experts. So I
congratulate Chairman Biden and Ranking Member Lugar for their
persistence in ensuring this final agreement is a real improvement over
initial administration proposals. The legislation before us clarifies
some of the deliberate ambiguities contained within the Article 123
United States-India agreement and the international exemption for India
provided by the Nuclear Suppliers Group.
The United States-India civil nuclear initiative is a flawed
agreement. Nonetheless, I am casting a ``yes'' vote for this
legislation for two primary reasons. First, in many respects, the
damage to the global non-proliferation regime has already been done.
The decision taken last month by the Nuclear Suppliers Group to provide
a universal exemption to permit India to participate in civil nuclear
trade means that, even if the United States Congress were to reject
this agreement, other nations like Russia and France are free to
initiate their own civilian agreements with India. The net result of a
United States rejection would likely only ensure that United States
companies--and United States workers--will be unable to participate in
the fruits of civilian nuclear trade with India.
Second, a ``no'' vote on this agreement will be unfairly construed as
a rejection of a broader strategic alliance between the United States
and India. Through his rhetoric and actions, President Bush unwisely
has transformed this nuclear cooperation agreement into the centerpiece
of our bilateral relationship with New Delhi. In doing so, he has
ignored the broad range of areas on which the United States and India
can and should cooperate--ranging from science and technology to
economic and business partnerships. In the security realm, our two
nations should be doing more together on counterterrorism, especially
in the wake of the devastating attacks in India over the past year.
I strongly believe in the promise of the future partnership between
our two great nations. I am voting in favor of this agreement, despite
its serious nonproliferation flaws, because I do not want to jeopardize
that emerging alliance that can bring so many benefits to both of our
peoples.
Mr. REED. Mr. President, I would like to take a few moments to
discuss my vote against the India Nuclear Agreement.
In 2006, I voted in favor of the Henry J. Hyde United States and
India Nuclear Cooperation Promotion Act, primarily because of the
safeguards included in the act that would ensure that assistance to
Indian's civilian nuclear program to meet its domestic energy needs,
would not assist the Indian nuclear weapons program. Unfortunately, I
do not believe that the United States-India Nuclear Cooperation
Approval and Nonproliferation Enhancement Act that we voted on last
night has the full scope of necessary protections.
India is the largest democracy in the world. Its economy is growing
by 8 percent annually. Their domestic energy needs are enormous and
they simply do not have enough indigenous resources to meet them. India
is an important ally and our nation has benefitted from a strong trade
and defense relationship for decades. Furthermore, my State of Rhode
Island has prospered because of a vibrant Indian community. I believe
that the United States should do all that it can to assist India and
further strengthen the partnership between the two countries.
However, our country's relationship with India must be balanced with
concerns about nuclear proliferation and the stability of the Middle
East and Asia.
I believe that proliferation of nuclear weapons and weapons material
and technology is the greatest threat facing our country today. The
most effective method of controlling such proliferation is a
multilateral regime where all countries are subject to the same
standards.
The agreement that was approved by the Senate last night establishes
a separate and unique regime for India. This particular agreement would
allow India to be treated like a nuclear weapons state but not impose
upon India the responsibilities and commitments placed on other nuclear
weapons states. As such I believe that this particular agreement is
flawed. This agreement has the potential to actually weaken the
carefully constructed, long-standing nuclear nonproliferation regime
that the world depends on to prevent the spread of nuclear weapons.
This agreement does provide some benefits. Under this agreement India
will put 14 of its nuclear reactors under safeguards agreements with
the International Atomic Energy Agency, the IAEA. This will help to
ensure that these reactors and the fuel supplied to them will be used
only for the peaceful production of nuclear poser. In addition the IAEA
will bring its expertise to help to improve the operational safety of
the reactors.
On the other hand the rest of India's nuclear reactors will not come
under the IAEA and these reactors can be used as India wishes to
produce power or to produce more material for nuclear weapons. But it
is troublesome to me that India retains the right to deny IAEA access
to some or all of the reactors that it has now agreed will come under
IAEA agreements.
While this agreement will help India with its energy needs, India is
also now free to use its limited indigenous uranium for to support a
build up of its nuclear weapons stockpile. India has specifically
preserved its ability to increase the number of nuclear weapons in its
arsenal, its ability to increase the amount of nuclear weapons
materials that it produces and its right to conduct a test of a nuclear
weapon.
While India has a voluntary moratorium on testing, India still
refuses to sign the Comprehensive Test Ban Treaty and to support a
fissile material cut-off treaty. Finally, I am greatly concerned about
the effect this agreement will have on the region, particularly the
reaction of Pakistan. Pakistan will undoubtedly seek a similar
agreement if it perceives an increased threat from India. Pakistan may
seek to partner with China--and the United States would have few
grounds to protest. In such a case, Pakistan will have additional
access to nuclear technology.
While I believe that the United States should help India with its
urgent energy needs, I believe we missed
[[Page 23612]]
an opportunity to provide assistance with adequate and necessary
safeguards in place. For these reasons, I reluctantly decided to vote
against this agreement. It is my hope that the United States and India
continue to work together to make the world safer from nuclear
proliferation.
The PRESIDING OFFICER. Who seeks time?
The Senator from Connecticut is recognized.
Mr. DODD. Mr. President, first of all, I wish to thank Senator
Richard Lugar and Senator Joseph Biden. Joe Biden is the chairman of
the Foreign Relations Committee and he and Senator Lugar have worked on
this for a long time. We have had five congressional hearings on that
committee on the subject matter.
I greatly respect my colleagues, Senator Dorgan and Senator Bingaman.
However, I would point out to my colleagues that on this particular
amendment they offer, the Atomic Energy Act, the Arms Support Control
Act, the Hyde amendment, and this bill all have provisions in them that
would allow us to respond should India decide to detonate a nuclear
weapon.
No one anywhere wants to see a further proliferation of nuclear
weapons. India and the United States are the two largest democracies in
the world. India is in a very tough and fragile neighborhood. It is
important we develop and improve that relationship that has been a
tense one since 1974.
This agreement began with the work of President Clinton and was
concluded by President Bush. We think it is an agreement worth
supporting, and we urge our colleagues to do so and respectfully reject
this amendment.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The amendment (No. 5683) was rejected.
The PRESIDING OFFICER. Under the previous order, there is 2 minutes
equally divided prior to a vote on passage of the bill.
Who yields time? The Senator from Indiana.
Mr. LUGAR. Mr. President, I ask all Senators to participate in a
historic moment. This is an opportunity for the United States and India
to come together in a way that historically is important for the world.
India is a very important country for us, and this relationship is
sealed in a very significant way by this agreement. We have tested it
in the Foreign Relations Committee for 3 years, back and forth on the
nonproliferation qualities. We had great testimony from our Secretary
of State, strong advocacy from our President.
We ask Senators to vote on this historic moment for a partnership
that will be enduring, in my judgment, and will make a big difference
in the history of the world.
The PRESIDING OFFICER. Who yields time?
The Senator from Connecticut.
Mr. DODD. Mr. President, I have spoken. This is a very worthwhile
bill. I commend Senator Lugar and Senator Biden for the tremendous work
they have done on this legislation over an extended period of time.
I ask for the yeas and nays and urge the adoption of the legislation.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The question is on the third reading of the bill.
The bill was ordered to a third reading and was read the third time.
The PRESIDING OFFICER. The bill having been read the third time, the
question is, Shall the bill pass?
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from Massachusetts (Mr.
Kennedy) is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 86, nays 13, as follows:
[Rollcall Vote No. 211 Leg.]
YEAS--86
Alexander
Allard
Barrasso
Baucus
Bayh
Bennett
Biden
Bond
Brownback
Bunning
Burr
Cantwell
Cardin
Carper
Casey
Chambliss
Clinton
Coburn
Cochran
Coleman
Collins
Corker
Cornyn
Craig
Crapo
DeMint
Dodd
Dole
Domenici
Durbin
Ensign
Enzi
Feinstein
Graham
Grassley
Gregg
Hagel
Hatch
Hutchison
Inhofe
Inouye
Isakson
Johnson
Kerry
Klobuchar
Kohl
Kyl
Landrieu
Lautenberg
Levin
Lieberman
Lincoln
Lugar
Martinez
McCain
McCaskill
McConnell
Menendez
Mikulski
Murkowski
Murray
Nelson (FL)
Nelson (NE)
Obama
Pryor
Reid
Roberts
Rockefeller
Salazar
Schumer
Sessions
Shelby
Smith
Snowe
Specter
Stabenow
Stevens
Sununu
Tester
Thune
Vitter
Voinovich
Warner
Webb
Wicker
Wyden
NAYS--13
Akaka
Bingaman
Boxer
Brown
Byrd
Conrad
Dorgan
Feingold
Harkin
Leahy
Reed
Sanders
Whitehouse
NOT VOTING--1
Kennedy
The PRESIDING OFFICER. Pursuant to the previous order, the bill
having attained 60 votes in the affirmative, the bill is passed.
The bill (H.R. 7081) was passed.
Mr. DURBIN. Mr. President, I move to reconsider the vote and to lay
that motion on the table.
The motion to lay on the table was agreed to.
____________________
PAUL WELLSTONE MENTAL HEALTH AND ADDICTION EQUITY ACT OF 2008--
Continued
The PRESIDING OFFICER. Under the previous order, the Senate resumes
consideration of H.R. 1424. There are 2 minutes of debate equally
divided prior to a vote in relation to the Sanders amendment No. 5687.
The Senator from Vermont.
Mr. SANDERS. Mr. President, this bailout, caused by Wall Street's
greed and irresponsibility, may cost as much as $700 billion. The
simple question is: Who is going to be paying for it?
Today, in America, the top 1 percent earn more income than the bottom
50 percent. The top 1 percent have more wealth than the bottom 90
percent. Since President Bush has been in office, the middle class has
seen a significant decline in their standard of living while the top
400 individuals have seen a $670 billion increase in their wealth.
What this amendment does is impose a 10-percent surtax on a household
that makes $1 million a year, which raises over $300 billion in 5
years. Under this amendment, the bottom 99.7 percent of Americans will
not pay 1 penny for this bailout.
The middle class has had nothing to do with causing this crisis. They
should not have to pay for it, and I ask for a ``yes'' vote on this
amendment.
The PRESIDING OFFICER. The Senator from New Hampshire.
Mr. GREGG. Mr. President, this agreement was reached after
considerable effort and negotiation by a lot of different parties--
Senate Democrats and Senate Republicans; House Democrats and House
Republicans. It is a good agreement. It is basically an agreement
which, hopefully, will cost the taxpayers virtually no money. It
protects the taxpayers, it protects mortgagees, it is directed at
making sure there are no golden parachutes or undue benefits to the
people who run these companies, and it has aggressive regulation.
It is a balanced approach which was reached through a lot of effort,
and it is absolutely necessary that we pass it now in order to help
Main Street, which is about to be crushed by the present economic
downturn driven by the lack of credit.
Unfortunately, the Senator from Vermont is introducing a brand-new
idea into this effort. It is an idea which is extremely controversial.
Being from New Hampshire, we are not in favor of any taxes, so from my
standpoint, this would be a major mistake and undo an agreement which
is very bold and aggressive in its attempt to help Main Street America.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The amendment (No. 5687) was rejected.
The PRESIDING OFFICER. The majority leader.
[[Page 23613]]
Tribute to David Tinsley
Mr. REID. Mr. President, it is the waning days of this Congress--the
waning hours--and we depend so much on our staffs, our individual,
personal staffs and the people who are in the Senate. I am going to
direct some attention to David Tinsley, whom all of us know, the
gentleman with glasses up here and who is here all the time. But in
speaking about him, I am speaking about all these people who work these
unbelievable hours. After we leave, they are still here. Before we get
here, they are here. They make this place operate. We are the greatest
legislative body in the history of the world, but it is not because of
individual Senators, in my opinion. It is because of the support staff,
such as David Tinsley.
David is going to leave the Senate after 31 years of service. He will
retire within a couple months. He is a native of the Commonwealth of
Virginia. He earned his undergraduate degree at Virginia Tech and
completed his graduate studies at the University of Maryland. He came
to the Office of the Secretary of the Senate in 1977, first, as a staff
and reference assistant, and 4 years later, because of who he is and
the tremendously nice person he is and his talent, generally, he was
promoted to the job of assistant executive clerk.
In 1987, David started his floor work as assistant journal clerk.
This doesn't mean much to most people, but it is one of the most
important jobs we have here. From there, he moved to the other side of
the desk as assistant legislative clerk, and in February of 1999,
earned the role of legislative clerk, which is where he now sits.
What many of those who watch our proceedings on television or read
about them in the newspaper may not see is the tremendous amount of
dedicated work that happens largely, as I have said, behind the scenes.
For 31 years, David has been a critical part of everything we have been
able to do in the Senate. David is part of our Senate family and has
been for 31 years, and I have witnessed, especially in the last few
years, with the job I have had, the good times in his life and the bad
times. And unfortunately, he has had some very difficult times
personally.
He is a wonderful human being, a caring person. His wife Jane, and
the children, Joe, Dan, and Katie, are treasured members of our Senate
family because it is an extended family.
So, David Tinsley, on behalf of all the Senators who are here
tonight, who have been here during your tenure these 31 years, I send
to you a very belated but heartfelt thanks for all you have done for us
as Senators.
(Applause.)
The PRESIDING OFFICER. The minority leader.
Mr. McCONNELL. After that well-deserved applause you have received,
Dave, from everyone in the Senate, I think it is appropriate to note
that given the fact that Dave is quite visible on C-SPAN, his face
recognition is probably a good deal greater in America than many of us.
Not that they know your name, Dave, but they do know your face.
I wished to join my good friend, the majority leader, in thanking you
for your 31 years of service. We deeply appreciate your fine work, and
we wish you well in your retirement. Thank you so much.
(Applause.)
Dodd Amendment No. 5685
The PRESIDING OFFICER. There are now 2 minutes equally divided prior
to the vote on the Dodd amendment, No. 5685.
The majority leader.
Mr. REID. Mr. President, as soon as we hear from the 2 minutes and 2
minutes, Senator McConnell is going to speak using leader time, and I
will follow that, and then following my remarks, we will vote.
Mr. DODD. Mr. President, I would like to take a minute and highlight
a critically important component of the amendment I am offering today.
And that is the Paul Wellstone and Pete Domenici Mental Health Parity
and Addiction Equity Act of 2008.
The vehicle being used for my amendment, H.R. 1424, is a stand-alone
mental health parity bill that the House passed last March before
months' long negotiations between the House and Senate on a compromise
mental health parity bill.
But the actual mental health parity language in my amendment is
identical, word-for-word, to the language the Senate passed last week
as part of the tax extenders package. The substance of the language is
the language that was agreed upon between the Senate and the House last
summer.
The Senate passed the tax extender package including the mental
health parity language in my amendment by a vote of 93 to 2.
Last week I spoke at length about the many individuals and
organizations who are responsible for championing mental health parity
legislation and I won't go through them all again on the floor today.
But I will, once again, thank and congratulate Senators Kennedy and
Domenici as well as the late Senator Paul Wellstone for their
leadership on mental health parity. In the other body, Representatives
Patrick Kennedy and Jim Ramstad should be extremely proud of their
efforts which have helped get us where we are today.
It has taken us more than 10 years, but today we stand at the
precipice of hopefully passing one of the most important health care
initiatives of the 110th Congress.
In fact, if my amendment passes, it will mark the third time the
Senate has passed mental health parity legislation in this Congress
alone. The first time it passed unanimously and the second time it
passed overwhelmingly, as I previously mentioned, by a vote of 93 to 2
We have come too far and worked too hard not to have mental health
parity legislation signed into law this year.
Today, one in five American families are affected by mental illness.
Every American knows a friend, a relative, a neighbor, or a coworker
whose life has been touched by mental illness in some way.
With this legislation, we are saying that mental illness will no
longer take a backseat to physical illness. With this legislation, we
are taking an important step toward tearing down the stigma people with
mental illness face every day.
The Paul Wellstone and Pete Domenici Mental Health Parity and
Addiction Equity Act will end health insurance discrimination between
mental health and substance use disorders and medical and surgical
conditions. Upon passage of this bill, health insurers will no longer
be permitted to charge higher copays or limit the frequency of
treatment for people with mental illness than what they would do for a
medical or surgical condition.
I join with the more than 250 national organizations representing
consumers, family members, advocates, professionals and providers who
are urging the Senate and the House to put aside their differences and
pass this legislation before the end of the year.
I thank my colleagues and urge them to support my amendment.
The PRESIDING OFFICER. Who seeks recognition? The minority leader.
Mr. McCONNELL. Mr. President, the C-SPAN viewers of America rarely
have seen the Senate in applause such as they saw it a few minutes ago,
but also it illustrates how well we have worked together on a
bipartisan basis to try to address the significant crisis confronting
our country's financial system.
We have seen, over the last 2 weeks, a coming together. Both of the
candidates for President of the United States are here tonight. We had
unprecedented cooperation between the majority leader and the
Republican leader and our designees, Senator Gregg and Senator Dodd,
who did a superb job bringing both sides together to craft a package we
could proudly pass tonight for the American people on a bipartisan
basis.
This is a big moment in the Senate. This is the kind of vote we were
sent by our people to cast, and I wish to express my pride and my
gratitude to Members, my pride in the institution, and my gratitude for
Members who wrestled with this very difficult challenge and who have
helped us come together with a package we believe will
[[Page 23614]]
address the Main Street problems facing America as a result of the
credit crunch.
Right in the middle of the heat of a Presidential election, we have
been able to put that aside and come together and do something
important for our country. I think it is one of the finest moments in
the history of the Senate. I congratulate all Members of the Senate for
participating in this, and I obviously urge that it be supported.
I yield the floor.
The PRESIDING OFFICER. The majority leader.
Mr. REID. Mr. President, similar to all Senators, my office has been
flooded in recent days with calls and letters from constituents who are
deeply and rightfully concerned with the state of our economy and the
security of their savings. Here is one such letter I received from a
man in Henderson, NV, the second largest city in the State of Nevada.
He wrote:
I am a homeowner and have a wife and two kids. I have been
employed in Nevada for 5-plus years as a salesman in the
southern Nevada area. This area has been hit like no other,
it seems. My salary has dropped nearly 35 percent and does
not look good for the next couple of years. My family and I
are fighting to stay afloat in this cutthroat market. We have
done and redone our budget and seem to have made additional
cuts every month just to keep up with my declining income.
Please keep everybody in mind when passing a bailout bill
for Wall Street. My home is down more than $100,000 from the
time I purchased it in August 2006. I am fighting to stay
current. I don't want to see the big corporations take the
bailout and move on with the middle class left to fight for
themselves. We need a real solution that is in the American
citizens' interests and not straight out of the pockets of
Wall Street.
Thanks, and my family and I look forward to seeing an end
to this economic tragedy here in Las Vegas and the United
States.
The rescue package we are on the verge of passing is not for the
titans of Wall Street. It is not for those whose greed got us here, who
chose this greed over prudence. It is not for the CEOs who failed their
employees, then left town with multimillion-dollar golden parachutes.
This plan is for the man from Henderson whose letter I read. It is for
families in Las Vegas, Reno, Winnemucca, and Sparks, not statistics but
real people with problems they did not cause and cannot solve
themselves. It is for families across Nevada and across America who are
struggling every day to keep their jobs, their homes, and find a way to
make one paycheck last until another one.
Some Members in both Chambers of Congress ask how they can explain a
vote in favor of this legislation to their constituents. Here is how:
not with any sense of glee or satisfaction but with a sense of
confidence that when called upon to choose between what is easy and
what is right, we rejected the easy and chose the right.
There is not a Member of Congress who wouldn't rather use this money
to reduce our record debt, to invest in roads, schools, hospitals,
bridges, health care, education, or to provide our troops and veterans
with the care they deserve. But given this situation, supporting this
legislation is the only way to make the best of a crisis and return our
country to a path of economic stability, prosperity, and growth.
If we do not act responsibly tonight, we risk the crisis in which
senior citizens across America will lose their retirement savings,
small businesses won't make payroll, students won't be able to obtain
loans to go to college, and families won't be able to obtain mortgages
for their homes or loans for their cars.
In the words of Ralph Waldo Emerson:
Thought is the blossom; language the bud; action the fruit
behind it.
My friends, it is time for action.
Last week, President Bush and Secretary Paulson sent to Congress a
proposal that the Democrats and Republicans agreed was not the answer.
We proceeded to put politics aside and, after long hours and sleepless
nights, have come to a solution that the White House, the Treasury
Department, and the leaders from both parties on Capitol Hill all
believe will resolve this crisis by protecting taxpayers first.
On a bipartisan basis, we added oversight to safeguard any public
funds spent. On a bipartisan basis, we stopped CEOs from receiving
golden parachutes at our expense, taxpayers' expense. On a bipartisan
basis, we made sure this taxpayer money would be an investment, not a
giveaway, and that any future returns would go not to the corporations
but to the taxpayers. On a bipartisan basis, we ensured that homeowners
facing foreclosure would receive much needed help. And on a bipartisan
basis, we added a provision to increase Federal Deposit Insurance
Corporation insurance for bank deposits from $100,000 to $250,000 to
renew the American people's confidence that the money they put in local
banks will be protected.
In addition to these critical improvements, Democrats and Republicans
on a bipartisan basis decided to include other important components
that will lower taxes and create jobs. By fixing the alternative
minimum tax, this legislation will save the middle class $60 billion in
their taxes. That is what we are going to do tonight.
With new incentives for private sector entrepreneurs who are
developing and producing clean, homegrown alternative energy from the
Sun, the wind, the Earth--geothermal--we will create hundreds of
thousands of new jobs. With tax breaks for small businesses and big
businesses, we will encourage new investment in growth and new jobs.
In this bill is something called payment in lieu of taxes. The State
of Nevada is 87 percent owned by the Federal Government. You can't fly
over 40 percent of the State of Nevada; it is restricted military
airspace. States that have Federal land, such as the State of Nevada--
no State has it like the State of Nevada--but States that have large
Federal landholdings were told long ago that because the tax base was
restricted because of these Federal land holdings, the Congress would
provide money for these States to make up for the tax losses because of
the Federal landholdings. That is what payment in lieu of taxes is all
about. It has been in existence for decades, but we have never gotten
the amount of money we should. This bill does it. For every State west
of the Mississippi, this is big time stuff. This will allow especially
rural America and the West to be able to take care of their schools, to
do things that are so important.
There are so many good things in this bill. I was speaking earlier to
the Senator from Texas. Texas does not have an income tax, but they
have a large sales tax. This legislation will allow people in Texas and
Nevada and other places who pay sales tax but no income tax to get the
same benefit from States that have an income tax.
This is a fine piece of legislation, and we are finally on the verge
of passing a bill that Senators Kennedy and Domenici and the late
Senator Wellstone worked on for a long time to ensure those who suffer
from mental illness have access to health care equal to those who
suffer from physical illness. It would be a fitting tribute to Senator
Pete Domenici if we are able to pass this legislation into law in honor
of his 3\1/2\ decades of Senate service. That would be important, that
we do that.
We, the Senate--each Senator--are facing this evening a critical test
of leadership. So I ask all my colleagues, Democrats and Republicans,
to send a clear and resounding message to America--to the homeowners,
laborers, middle-class families, students, senior citizens who are
struggling and really suffering--a clear, resounding message that we
hear them and that help is on the way.
Mr. GREGG. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER (Mr. Pryor). Is there a sufficient second?
There is a sufficient second.
The yeas and nays are ordered.
Mr. REID. Mr. President, Senator McConnell, I would appreciate it if
Senators would vote from their chairs.
The PRESIDING OFFICER. Senators will vote from their chairs.
The question is on agreeing to the amendment. The clerk will call the
roll.
The legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from Massachusetts (Mr.
Kennedy) is necessarily absent.
[[Page 23615]]
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 74, nays 25, as follows:
[Rollcall Vote No. 212 Leg.]
YEAS--74
Akaka
Alexander
Baucus
Bayh
Bennett
Biden
Bingaman
Bond
Boxer
Brown
Burr
Byrd
Cardin
Carper
Casey
Chambliss
Clinton
Coburn
Coleman
Collins
Conrad
Corker
Cornyn
Craig
Dodd
Domenici
Durbin
Ensign
Feinstein
Graham
Grassley
Gregg
Hagel
Harkin
Hatch
Hutchison
Inouye
Isakson
Kerry
Klobuchar
Kohl
Kyl
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Lugar
Martinez
McCain
McCaskill
McConnell
Menendez
Mikulski
Murkowski
Murray
Nelson (NE)
Obama
Pryor
Reed
Reid
Rockefeller
Salazar
Schumer
Smith
Snowe
Specter
Stevens
Sununu
Thune
Voinovich
Warner
Webb
Whitehouse
NAYS--25
Allard
Barrasso
Brownback
Bunning
Cantwell
Cochran
Crapo
DeMint
Dole
Dorgan
Enzi
Feingold
Inhofe
Johnson
Landrieu
Nelson (FL)
Roberts
Sanders
Sessions
Shelby
Stabenow
Tester
Vitter
Wicker
Wyden
NOT VOTING--1
Kennedy
The PRESIDING OFFICER. Pursuant to the previous order, the amendment
having obtained 60 votes in the affirmative, the amendment is agreed
to.
The amendment (No. 5685) was agreed to.
Mr. REID. The next vote is exactly the same as this vote. It is my
understanding that there is a request for a rollcall vote. If that is,
in fact, the case, we will do that. But people need not sit at their
chairs because people, after they vote, can depart the Chamber.
We will be in session tomorrow. There will be minor business
transacted. We will be in morning business. We will try to clear some
bills if we can. We will see Friday--we will see what the House does.
They are coming back in session tomorrow. So we are going to have to be
in session until a decision is made when the House can take up the
legislation.
Everyone should understand, the week of November 17 we are going to
have an organizational meeting. We will be in session several days
during that period of time. We will tell everyone all about this. One
thing we are going to move to is a land package. We have talked to
everybody about this. It is something that Senator Bingaman and Senator
Salazar have talked to many of you about.
But to see what business will be conducted, we will wait and see
what, if anything, the House does. If they do not do anything, we
cannot do anything. So we will see what they do. So Members should keep
that time open.
Senator McConnell said, and I want to parrot what he said, I so
appreciate the cooperation we have had from everybody these past
several weeks. This has been a very difficult time for our country, a
difficult time for those of us who are elected to office. But I am very
happy with this vote tonight. I think it shows that when we work
together, we can accomplish good things. I think it speaks volumes.
Both of our Presidential candidates are here and voting and both
supporting this legislation. So I say to everyone, thank you very much.
This is a good vote we send to the House.
The PRESIDING OFFICER. The Republican leader.
Mr. McCONNELL. I think the majority leader has made it clear that we
will be back for a few days in November. I wish everybody well during
this recess. This is a fine accomplishment for the Senate. Let's go on
and have the next vote and head on to other business.
The PRESIDING OFFICER. There are now 2 minutes equally divided prior
to a vote on passage of the bill, as amended.
Mr. McCONNELL. We yield back.
The PRESIDING OFFICER. All time is yielded back.
The question is on the engrossment of the amendment and third reading
of the bill.
The amendment was ordered to be engrossed and the bill to be read a
third time.
The bill was read the third time.
The PRESIDING OFFICER. The bill having been read the third time, the
question is, Shall the bill pass?
Mr. DODD. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from Massachusetts (Mr.
Kennedy) is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 74, nays 25, as follows:
[Rollcall Vote No. 213 Leg.]
YEAS--74
Akaka
Alexander
Baucus
Bayh
Bennett
Biden
Bingaman
Bond
Boxer
Brown
Burr
Byrd
Cardin
Carper
Casey
Chambliss
Clinton
Coburn
Coleman
Collins
Conrad
Corker
Cornyn
Craig
Dodd
Domenici
Durbin
Ensign
Feinstein
Graham
Grassley
Gregg
Hagel
Harkin
Hatch
Hutchison
Inouye
Isakson
Kerry
Klobuchar
Kohl
Kyl
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Lugar
Martinez
McCain
McCaskill
McConnell
Menendez
Mikulski
Murkowski
Murray
Nelson (NE)
Obama
Pryor
Reed
Reid
Rockefeller
Salazar
Schumer
Smith
Snowe
Specter
Stevens
Sununu
Thune
Voinovich
Warner
Webb
Whitehouse
NAYS--25
Allard
Barrasso
Brownback
Bunning
Cantwell
Cochran
Crapo
DeMint
Dole
Dorgan
Enzi
Feingold
Inhofe
Johnson
Landrieu
Nelson (FL)
Roberts
Sanders
Sessions
Shelby
Stabenow
Tester
Vitter
Wicker
Wyden
NOT VOTING--1
Kennedy
The PRESIDING OFFICER. Pursuant to the previous order, the bill
having attained 60 votes in the affirmative, the bill, as amended, is
passed.
The bill (H.R. 1424), as amended, was passed.
Mr. DURBIN. I move to reconsider the vote and I move to lay that
motion on the table.
The motion to lay on the table was agreed to.
Mr. KOHL. Mr. President, I rise to briefly discuss the economic
stabilization bill which the Senate passed and is sending to the
President.
This economic crisis has been building over the past decade, fueled
by risky investments, deregulation, and human nature. It is hard to
pinpoint the exact reason for our current financial situation; instead
it is a tangled mess involving large investment banks and individual
homeowners. Homebuyers over extended themselves, mortgage lenders
offered more complicated and exotic loans and the government sponsored
enterprises and investment firms purchased bundled mortgages without
fully understanding the value of what they were purchasing.
Homeowners are losing their homes, communities are losing tax revenue
as foreclosures rise, banks are rapidly losing money, and our credit
markets are freezing up. Wall Street and Main Street have been tied
together, and the Federal Government is being forced to intervene to
help our economy and communities get back on track.
The provisions of this bailout are intended to restore liquidity and
confidence in our financial markets, provide relief for troubled
homeowners, hold Wall Street executives accountable, and ensure that
taxpayer dollars are being protected. The legislation creates the
Troubled Asset Relief Program in the Treasury Department, which will
allow the government to purchase impaired assets from financial
institutions, restructure or modify, then resell for a profit. The
Treasury Department is authorized to use
[[Page 23616]]
$250 billion immediately and upon written request from the President,
can use up to $700 billion to maintain TARP.
One significant improvement from the administration's original plan
is the creation of an oversight board over the newly created program.
The board will make recommendations to the Treasury Department and also
hold the Department to the principals and guidelines laid out in the
bill. Additionally, the Federal Government is enabled to acquire stocks
in the financial institutions which participate in the program,
allowing the government to recoup some of the lost money and benefit
from any future profits from the institution.
One particular area of concern I have, and I share with many of my
colleagues, is how Wall Street executives acted irresponsibly and
allowed greed to control the management of their companies. In most
companies, managers and executives are held accountable for its
performance; however, on Wall Street, management, was given large
bonuses and compensation, as their companies lost money or even failed.
Those same executives who put our entire economic stability at risk,
who have asked us for help, complained when Congress decided they
needed to be held accountable for their actions. I am pleased to say
that Congress ignored their objections and included limitations on
executive compensation for those firms which sell their troubled assets
to the Federal Government. However, I would still like those who have
been most involved in this crisis on Wall Street explain to the public
what role they played in this mess.
This is not an easy vote for any legislator. There are provisions in
the bill which I believe could have been written stronger and some
other ideas which should have been included. I believe that we should
have included additional financial regulations to restore the public's
confidence in Wall Street and make sure this never happens again. I am
also disappointed that this bill does not address the root of the
crisis and do more to directly help homeowners facing foreclosure. This
bill also puts too much power in the hands of one man the Secretary of
Treasury. Nevertheless, we cannot let the perfect be the enemy of the
good. Given the urgency and magnitude of this matter, I voted in favor
of the Emergency Economic Stabilization Act.
The PRESIDING OFFICER. The assistant majority leader is recognized.
Mr. DURBIN. Mr. President, I ask unanimous consent that the title
amendment, which is at the desk, be considered and agreed to, and the
motion to reconsider be laid upon the table.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment (No. 5686) was agreed to, as follows:
(Purpose: To amend the title of the bill)
Amend the title so as to read:
``To provide authority for the Federal Government to
purchase and insure certain types of troubled assets for the
purposes of providing stability to and preventing disruption
in the economy and financial system and protecting taxpayers,
to amend the Internal Revenue Code of 1986 to provide
incentives for energy production and conservation, to extend
certain expiring provisions, to provide individual income tax
relief, and for other purposes''.
____________________
MORNING BUSINESS
Mr. DURBIN. Mr. President, I ask unanimous consent that the Senate
proceed to a period of morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________
TRIBUTE TO SENATORS
pete domenici
Mr. CONRAD. Mr. President, I want to take this opportunity to pay
tribute to Pete Domenici, one of the finest Senators I have known and
one who represents the Senate at its best. Senator Domenici is someone
whom I respect greatly and whose counsel I have very much appreciated
over the years. I will miss him very much when he retires at the end of
this session.
Senator Domenici and I share many interests, but one above all is our
deep and abiding interest in the fiscal affairs of our Nation. In the
world of budgeting, Senator Domenici is a giant. He is, of course, one
of the pioneers on the Budget Committee. He joined the committee in
1975, literally a few months after it was created in July 1974. So he
was there at the beginning, helping to shape and guide this new
committee.
He rose to become chairman in 1981, and he served in that capacity
through 1987 and then again between 1995 and 2001. In 2001, we faced
the unique circumstance in a closely divided Senate, as he and I traded
off being chairman and ranking member in that year. In total, Senator
Domenici has served 34 years on the committee, 12 years as chairman and
10 years as ranking member--the most distinguished record of any
Member.
His impact on the Federal budget and the budget process has been
unprecedented. He authored many of the Senate's budget rules that we
use today to protect taxpayers. He also helped author major deficit-
reduction plans during the 1980s and 1990s, as well as the Federal
Credit Reform Act of 1990 and the Unfunded Mandates Reform Act of 1995.
But Senator Domenici will be remembered for more than his service on
the Budget Committee. He has been a strong and important voice on the
need to diversify our Nation's energy sources. As chairman of the
Energy and Natural Resources Committee, he helped enact the Energy
Policy Act of 2005. He has been a passionate advocate on the issue of
mental health and has been a leader in pushing for mental health parity
legislation. Senator Domenici was also one of the architects of the
Human Genome Project, which I believe people will look back on as one
of the greatest accomplishments of all time.
And, of course, Senator Domenici has been a tireless advocate on
behalf of the citizens of the beautiful State of New Mexico. Born in
Albuquerque, he is that State's longest serving Senator. As a young
man, Pete Domenici had many options. At one time, he pitched for the
Albuquerque Dukes, a farm team for the Brooklyn Dodgers, and may have
had aspirations of going to the major leagues. But I am sure that the
citizens of New Mexico--and, indeed, all of us--are happy that he chose
the path of public service.
Let me conclude by saying, and I know that I speak for all of my
colleagues, how much we respect, admire, and appreciate his service.
For me personally, it has been an absolute honor to serve along with
him on the Budget Committee. He has made an extraordinary contribution
to the work of the Budget Committee, to the Congress, and to the
country. We will miss him greatly.
JOHN WARNER
Mr. President, it is with real sadness that I bid farewell to one of
the most distinguished public servants I have known. Over the 22 years
I have spent in the Senate, I have respected and admired the work of
the senior Senator from Virginia, John Warner.
As a veteran of two wars and an unfailingly gracious man, he
understands the needs of our men and women in uniform and has worked
diligently to meet them. During his 6 years as the chairman of the
Armed Services committee, he was always helpful in my efforts to
improve the quality of life for those serving at military installations
in my State of North Dakota. I thank him for that.
In the five decades since Arthur Vandenberg reminded us that partisan
politics should stop at the water's edge, it has not always been
possible to live up to that ideal. In a day when there are huge
disagreements about the best course for our Nation, we cannot always
present a unified face to the rest of the world. But perhaps more than
anyone else in the Senate today, John Warner has epitomized that ideal.
His partnership with the Senator from Michigan, Carl Levin, in their
leadership of the Armed Services Committee has been an example to all
of us.
John has been a tremendous leader in the Senate on military affairs,
but I have also been proud to work with him on a number of bipartisan
initiatives. On big issues, Senator Warner always
[[Page 23617]]
puts country before party or ideology. Most recently, he has been a
valued member of our gang of 20 working on a bipartisan, new era energy
bill. I regret that we will not be able to finish it before he leaves
the Senate, but we are proud to count him as part of our current group.
After 30 years in the Senate, 2 years as Secretary of the Navy, and
honorable wartime service in both the Navy and Marine Corps, our Nation
owes a big debt of gratitude to John Warner. He has my great respect
and my thanks.
CHUCK HAGEL
Mr. President, as this Congress comes to a close we bid a fond
farewell to our colleague Chuck Hagel. As a Member of this body, Chuck
is completing 12 years of outstanding service to the people of Nebraska
and to the country. But I expect that he will find new ways to
contribute to the mission we all share: making the United States
stronger, safer, and more prosperous.
Chuck's first legislative service was as a U.S. Senator. I like to
think that those of us who were not seasoned legislators when we
arrived here draw on a diverse set of experiences as we find our way to
become effective lawmakers. Chuck Hagel's background was probably more
varied than most--decorated war veteran, businessman, broadcaster, and
deputy administrator of the Veterans' Administration, just to mention a
few of the areas in which he has distinguished himself. His successes
in these many disciplines undoubtedly helped him develop the
independent voice that we grew accustomed to hearing over his dozen
years in our midst.
For several years, we served together on the Budget Committee, a
legislative environment in which bipartisanship isn't always easy.
Chuck was always forthright and honest in our sometimes contentious
deliberations and was never afraid to go where the facts led him--even
if it meant irritating a colleague on his own side of the aisle.
We will miss him as a friend and as a fellow Senator, but I expect
the Nation will hear from Chuck Hagel again. We wish him the best as he
looks for new challenges.
Wayne Allard
Mr. President, I rise today to pay tribute to my colleague Senator
Wayne Allard. Senator Allard is retiring to honor a commitment he made
to the people of the State of Colorado to serve only two terms. I have
come to know Senator Allard best as a fellow member of the Budget
Committee. Even though we often disagreed, I always found him to be a
true gentleman.
Born and raised in Colorado, Senator Allard has always been true to
his roots and has fought to represent the best interests of his State.
His entry into public service came in 1982 when he was elected to the
Colorado State senate. While serving in the state legislature, he
maintained a successful veterinary practice he built with his wife
Joan.
Senator Allard's public service has spanned more than two decades.
After serving in the State legislature, he was elected to the U.S.
House of Representatives and subsequently the U.S. Senate. During his
time in the Senate, there are accomplishments that stand out. He
spearheaded legislation creating the country's 56th national park, the
Great Sand Dunes National Park. He also took on the extraordinary task
of overseeing the Capitol Visitors Center as chair of the Legislative
Branch Appropriations Subcommittee. Finally, he has been a steward of
the taxpayer and has led by example, returning unspent funds from his
office account to the U.S. Treasury.
I wish Senator Allard and his family many happy years ahead and thank
him for his years of public service.
Wayne Allard
Mr. ENSIGN. Mr. Presdient, President Ronald Reagan once said,''Let us
be sure that those who come after will say of us in our time, that in
our time we did everything that could be done. We finished the race; we
kept them free; we kept the faith.''
There can be no question that Senator Wayne Allard's time in public
office will be remembered by these words both here in this Chamber and
in his State of Colorado. Wayne will end his career in the U.S. Senate
because of a self-imposed term limit. He has never once wavered in his
belief that legislators are citizens first and lawmakers second.
As one of only two veterinarians in the Senate, I know the void the
Senate will feel. Leaving a veterinary practice to fight for what is
right in the U.S. Senate isn't exactly the norm. Wayne and I each made
this choice and we have stood shoulder to shoulder in legislating for
the humane treatment of animals. The legislation we put forth against
animal fighting has become law and has helped law enforcement put away
individuals who abuse animals. I am sad to see that our small, very
small, veterinary caucus will leave with Wayne.
Wayne's commitment to country and freedom is unshakeable, but his
dedication to fiscal conservatism has made him a hero for taxpayers
across the country, especially in his State of Colorado. Throughout his
time here, he has fought to pay down the debt by eliminating programs,
staying true to the belief that government should steer clear of a
wasteful spending black hole.
His efforts on the Appropriations Committee have been committed to
steering our country toward fiscal responsibility, and his voice will
be missed.
I hope this Chamber remembers the role Wayne played in fighting
against a bloated Federal Government and giving States the rights they
deserve to manage their own affairs. Let's not let his voice for
government responsibility fall on deaf ears. The burden of the taxpayer
rests on our shoulders, and that is even more so now with Wayne's
departure.
Wayne has been a voice and a crusader for Colorado, preferring the
scenery there to that of Washington. He has worked hard to ensure that
his constituents are as familiar with his face as they are with his
name. Colorado has greatly benefitted from his leadership, as has this
country.
It is with sadness, that I lose my friend here. But I know the impact
he has had on this body, his State, and our country. I wish him great
success in his future endeavors. I know he will continue to be an
advocate for life, liberty, and freedom.
We will continue to fight for the ideals Wayne came to this body
hoping to achieve, that ``Government of the people, by the people, for
the people, shall not perish from the Earth.''
JOHN WARNER
Mr. KERRY. Mr. President, it is a privilege to speak today about my
good friend and colleague, John Warner, who it has been an honor to
serve with in the Senate for almost 25 years.
At age 17, John enlisted in the Navy to serve our country during
World War II. After that, he attended Washington and Lee University on
the GI bill and went on to study law at the University of Virginia. In
1950, he interrupted his legal education to deploy to Korea as a
marine, eventually attaining the rank of captain before receiving his
law degree in 1953. Sixteen years later, John was appointed Under
Secretary of the Navy, and in 1972 rose to become Secretary of the
Navy. In 1978, the people of Virginia elected him their Senator, and he
has represented them and the rest of our country with courage and
dedication for over 30 years.
In particular, John has fought relentlessly for our men and women in
uniform in his leadership role as chairman and ranking member of the
Armed Services Committee. He has always had a special place in his
heart for our country's veterans. His background as a sailor, marine,
and Navy Secretary gave him the experience and insight needed to
address extraordinarily complicated and wide-ranging issues of vital
importance to our country's defense. Today he is recognized by all as
one of our country's foremost experts on national security matters, and
someone whose record of bipartisanship is simply unmatched.
That is a legend's biography, and through it courses the public
virtues of service, patriotism, grace and high-mindedness in a way few
have seen, but I know many will read about.
On a personal note, one of my fondest memories of John was of a
debate between us that occurred on the Senate
[[Page 23618]]
floor. It was late one night in June 2006, and I had proposed a
resolution setting a deadline on our combat presence in Iraq that
wasn't a popular position at that time. I was clearly outnumbered, and
the debate became heated and personal. In fact, my plan received only
13 votes, and Senator Warner wasn't one of them.
But even in times of disagreement, John had no trouble rising above
partisan bickering in service of a higher purpose. In the best
traditions and practices of the Senate, he rose to speak and engaged me
in a respectful and substantive dialogue on a controversial issue that
calmed the Senate chamber and I hope informed the American public.
I want to close by saying that I, the people of Virginia and this
country are grateful for John's distinguished service and will miss him
dearly. I wish him and his family my very best and look forward to
continuing to receive his wise counsel in the years ahead.
Chuck Hagel
Mr. President, for the past 12 years, I have had the privilege of
serving in the Senate with my friend Chuck Hagel. Upon his retirement
from the Senate, I wanted to take a moment to tell him how much he will
be dearly missed. Chuck Hagel will be missed not just by his colleagues
in the Senate, but also by those Americans for whom he is dedicated his
career to fight while serving in Washington, DC.
Although we sit on opposite sides of the aisle, I have found myself
standing with Senator Hagel on numerous occasions. Just in the past
couple of years, we have fought for increased pay for our troops,
establishing a center dedicated to the rehabilitation, treatment, and
research of servicemembers blinded in combat, and advocating for
additional mental health care resources for servicemembers returning
from combat.
Because of Senator Hagel's dedication to stand up for those who have
fought for our country, we have a modernized GI bill. We have a GI bill
that more accurately reflects the sacrifices that our men and women in
uniform are making. A modernized benefits package that will cover the
majority of tuition costs for our returning servicemembers, and I was
proud to stand with him in that effort as well.
His service to our country has been truly admirable. Senator Hagel
has had a truly remarkable career representing the State of Nebraska. I
thank him for his service to our country. I wish him the best in his
future endeavors.
John Warner
Mr. COCHRAN. Mr. President, my friend John Warner, the very
distinguished gentleman from Virginia, has decided to retire from the
Senate after 30 years of exemplary service.
John and I were sworn in as Senators on the same day. While our paths
had crossed a few times before becoming Members of this body, we became
good friends and neighbors as well as competitors on the tennis courts.
Before John was elected to the Senate, he had achieved national
prominence as the Administrator of the American Revolution Bicentennial
Administration. He also had served as Secretary of the Navy.
As a Senator, John has served prominently as chairman of the Armed
Services Committee where he worked effectively on shipbuilding issues
that were important to both of our States.
John Warner has served with great distinction in the Senate. He has
earned the respect of all Senators because of his stewardship and his
sense of responsibility for our national security interests, which he
has done so much to protect.
The Senate, the State of Virginia, and the Nation will greatly miss
having the benefit of John Warner's steady hand at the helm.
Wayne Allard
Mr. President, it has been a genuine pleasure to serve in this body
with the distinguished Senator from Colorado, Wayne Allard. He has made
significant contributions through his thoughtful and effective
leadership for the betterment of our country.
He has brought to the challenge of public service a seriousness of
purpose and sense of responsibility to do this job well, not for
personal aggrandizement but for the improvement of our national
security and our Nation's economy.
In the process, he has reflected credit on his State of Colorado and
his family. His personal qualities of humility and trustworthiness have
aided him as he has worked to contribute to the quality of this
legislation we have enacted.
Wayne Allard is one of the most respected Members of this body. He is
also one of the best like Senators. We are certainly going to miss
having the benefit of his leadership.
We wish him well in the years ahead.
____________________
TRIBUTE TO MARTIN AND SEIBERT L.C.
Mr. BYRD. Mr. President, I would like to take this opportunity to
congratulate one of the most upstanding and intellectually accomplished
law firms in the country on its historic 100 years in practice. Yes,
this year marks the 100th anniversary of the premier regional law firm
of Martin and Seibert L.C., which has offices in Martinsburg and
Charleston, WV, Winchester, VA, and Hagerstown, MD. The firm, founded
in 1908, offers an extraordinarily high level of professional,
competent, and courteous service. Nestled in the eastern panhandle of
West Virginia and surrounding environs, it is respected throughout the
area. I would like to ask my esteemed colleague, Senator Rockefeller,
if he shares my appreciation of the unique history and many
accomplishments of this exemplary firm?
Mr. ROCKEFELLER. Let me assure the Senator that I am very well aware
of the numerous and considerable contributions that have been made by
the law firm of Martin and Seibert L.C. over the past century. The
grandfather of one of the firm's current top partners, Clarence E.
Martin III, was an American original. The first Clarence E. Martin was
what one might call ``the real deal.'' Not only an astonishing legal
mind, he was also a pioneer, a leader, and was knighted by two Popes
for his service to the church and community, a tradition that has been
carried on by subsequent members of the firm. Clarence E. Martin not
only founded Martin and Seibert L.C., but was one of only two West
Virginians, and the only practicing West Virginia lawyer ever, to serve
as president of the American Bar Association, ABA, from 1932 to 1933.
Martin and Seibert L.C. has grown surely and steadily over the past
century. Clarence Martin founded the firm along with Cleveland M.
Seibert. These two men brought national attention to West Virginia, and
the solid foundation they built for Martin & Seibert, L.C. remains
evident today. The firm constantly strives to provide both the best
possible service for its clients, and responsible leadership for its
community.
Mr. BYRD. I know that my esteemed colleague, Senator Rockefeller,
joins me in taking this opportunity to congratulate Martin and Seibert
L.C. on the 100th anniversary of the establishment of their firm. May
God grant them many more years of success and service to the people of
West Virginia and surrounding localities.
____________________
HONORING OUR ARMED FORCES
private Jordan P. Thibeault
Mr. HATCH. Mr. President, I rise to pay tribute to PVT Jordan P.
Thibeault of South Jordan, UT, who recently lost his life in Iraq while
serving with the 1st Armored Division.
I believe it is my solemn duty to learn about the lives of those Utah
servicemembers who have fallen in the defense of our Nation.
Looking back on the 7 years of this conflict, I have always been
stuck by theses remarkable men and women. Such is the case with PVT
Jordan Thibeault.
He is remembered by the Utah community as a young man who grew up
loving to ride bikes, act in plays, and known as a helpful and hard-
working young man.
I was struck by the words of his family who released a statement on
their son's passing. So I will take this opportunity to share with the
Senate the
[[Page 23619]]
moving words from the Thibeault family:
Mankind today is faced with terrible calamities. Only a
select few are willing to forgo comforts of home, indeed the
very promise of a brighter future, to place themselves
between the forces of hate and oppression and the human
spirit yearning for peace and safety . . . [Jordan
Thibeault's] passing should give hope to all that there are
still those among us who are willing to give the ultimate
sacrifice to keep mankind safe and free.
Mr. President, no truer words have been spoken on the floor of the
Senate. Those eloquent words are not only a wonderful tribute but firm
evidence of the quality of the family that raised such a fine man.
MAJOR GENERAL RANDALL D. MOSLEY
Mr. BAUCUS. Mr. President, I rise today with my colleague Senator
Tester, to recognize MG Randall D. Mosley, Adjutant General for the
great state of Montana. MG Randall D. Mosley has served our Nation and
the State of Montana for over 38 years and has recently retired. The
Montana Guard was established in 1889. Since then, few adjutant
generals have faced as many challenges as Major General Mosley. We
Montanans were so lucky to have such a great citizen soldier at the
helm of our National Guard. I want to take a few moments to recount the
career of this great Montanan.
General Mosley's career is a model of public service and serves an
example for all those in the military. He never backed down to any
challenging issue, of which he had many. During his tenure, duty called
several thousand Montana National Guard members to Iraq and
Afghanistan. The deployments put great strains on the soldiers and
airmen that answered the call, as well as the families of the soldiers
that stayed at home. General Mosley worked tirelessly before, during,
and after each deployment to support his troops and their families.
General Mosley understood that troops returning home from overseas
need the support of the whole community. General Mosley worked to
improve community awareness of the challenges troops face upon
returning from combat. As it became clear that the wars in Iraq and
Afghanistan were creating new forms of injuries, he led an overhaul of
Montana's postdeployment health reassessment program. General Mosley
put together a task force with community leaders from around the state.
The task force developed better ways to care for his troops as they
returned home.
Thanks to General Mosley's leadership, the Montana National Guard has
one of the best yellow-ribbon programs in the country. It is a model
for the rest of the nation to follow. Improved mental health care is
now available to Montana's guardsmen and their families. The Guard
offers training workshops to help troops transition back to everyday
life. Montanans are truly grateful to General Mosley for his leadership
on this critical issue.
I now yield to my colleague from Montana, Senator Tester.
Mr. TESTER. Thank you, Senator Baucus. General Mosley really does
embody what the National Guard is all about--the citizen soldier. For
35 years he wore the uniform of his country with great pride and honor.
But he also takes tremendous pride in being from the State of Montana.
General Mosley's leadership also has been recognized well beyond
Montana's borders. He worked with United States Central Command for
over 14 years to develop Montana's partnership with the country of
Kyrgyzstan. The partnership has blossomed. Leaders in Kyrgyzstan have
learned many of the skills and knowledge they need to secure their
country's democratic future. General Mosley also worked to help the
Kyrgyzstan military develop a noncommissioned officer cadre. These
leaders will help Kyrgyzstan train and lead their soldiers now and in
the future. Montana's partnership with Kyrgyzstan helped their leaders
improve the cooperation between military and civilian authorities. In
large measure because of General Mosley's efforts, Kyrgyzstan's
military has developed strong ties with our military and has rapidly
advanced to meet the challenges of the 21st century.
General Mosley's career reminds us all of the value of public
service. We Montanans are deeply indebted to him. He is an outstanding
ambassador for the citizens of Montana and the men and women of the
Montana National Guard. He will be deeply missed, but we wish him well
in retirement and we thank him for a lifetime of service to our State
and our Nation.
____________________
DEFICIT IMPACTS
Mr. GRASSLEY. Mr. President, I have additional information to include
in the Record that helps illustrate a point I made at the end of my
speech yesterday regarding the comparative deficit impacts of the
McCain and Obama tax and spending plans.
I noted that Senator Obama proposes to increase the national debt by
a staggering $1.31 trillion more than Senator McCain over the next 10
years. This table illustrates that Senator Obama's combined annual tax
and spending plan increases the deficit more than Senator McCain's on a
cumulative basis beginning in 2009 and continuing each year thereafter
over 10 years.
Once again, this data raises the question whether Senator Obama is
serious about reducing our national debt by returning to responsible
fiscal policies. Senator McCain will need to expand on this point as
well.
I ask unanimous consent that this table be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
TOTAL DEFICIT IMPACT OF OBAMA AND MC CAIN TAX AND SPENDING PROPOSALS
[In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009-18
--------------------------------------------------------------------------------------------------------------------------------------------------------
Obama Deficit Impact
Revenue.................... $10 $84 $230 $309 $333 $352 $372 $394 $418 $445 $2,948
Spending................... 293 293 293 293 293 293 293 293 293 293 2,930
Additional Revenue Loss.... 71 71 71 71 71 71 71 71 71 71 705
------------------------------------------------------------------------------------------------------------------------
Total.................... 374 448 594 673 696 715 735 758 782 808 6,582
Cumulative............... ......... 822 1,415 2,088 2,784 3,499 4,234 4,992 5,774 6,582 .........
McCain Deficit Impact
Revenue.................... 109 152 326 439 452 403 487 547 601 655 4,170
Spending................... 92 92 92 92 92 92 92 92 92 92 924
Additional Revenue Loss.... 15 15 15 15 15 15 15 15 15 15 145
------------------------------------------------------------------------------------------------------------------------
Total.................... 215 259 433 546 558 510 594 654 708 762 5,240
Cumulative............... ......... 475 908 1,454 2,012 2,522 3,116 3,770 4,478 5,240 .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
____________________
ACCESSION OF ALBANIA AND CROATIA TO THE NATO ALLIANCE
Mr. OBAMA. Mr. President, I welcome last week's vote in the Senate
ratifying the protocols on the accession of Albania and Croatia to the
NATO Alliance. The membership of these two countries will strengthen
the Alliance, contribute to the stability of the Balkans, and reinforce
democracy in the region. Less than 15 years after NATO sent
peacekeeping troops to the Balkans to halt a bloody war, it is a
tribute to these nations' commitment to reforms that we are today one
step
[[Page 23620]]
closer to extending our Alliance and solidifying the peace. Albania and
Croatia will strengthen the Alliance by providing more capability to
help meet NATO's broader security missions. All NATO member states
should be encouraged to ratify the accession agreement for Albania and
Croatia so that they can formally join the Alliance at NATO's 60th
anniversary summit next April.
____________________
IDENTIFICATION OF SERGEANT TIMOTHY J. JACOBSEN
Mrs. BOXER. Mr. President, I rise today to pay tribute to SGT Timothy
J. Jacobsen, a soldier from my home State of California who paid the
ultimate price in service to our country in Vietnam.
On September 23, 2008--more than 33 years since the end of the
Vietnam war--the Department of Defense POW/Missing Personnel Office
announced that the remains of SGT Jacobsen had been identified and
would be returned to his family.
SGT Jacobsen grew up on a dairy ranch in Ferndale, CA--the fifth of
eight children born to Margie and Kermit Jacobsen. When his father
started his own cattle ranch, SGT Jacobsen spent much of his free time
working alongside him. He also started riding bulls at an early age,
and by the time he was 18, he had become Humboldt County's top-rated
bull rider.
In 1967 SGT Jacobsen's older brother Skip was drafted by the Army and
sent to Vietnam. Not long after Skip returned, SGT Jacobsen was drafted
and left his family to serve as a doorgunner in the 101st Airborne
Division of the United States Army.
On May 16, 1971, SGT Jacobsen was one of four United States soldiers
and an unknown number of Republic of Vietnam marines aboard a
helicopter on a combat assault mission near Hue, South Vietnam. As the
helicopter touched down at the landing zone, it came under heavy enemy
ground fire. The pilot tried to lift off, but the damaged aircraft
struck a tree line and exploded.
The remains of the four U.S. soldiers on board were not recovered at
that time, and a year later, SGT Jacobsen was declared killed in
action.
In 1994, recovery efforts were renewed when a joint U.S.-Socialist
Republic of Vietnam team surveyed the crash site. Unfortunately,
excavation of the site in 1995 did not uncover remains of the U.S.
soldiers aboard the helicopter. However, in 2006, two re-burial sites
associated with the incident were excavated, leading to the recovery of
SGT Jacobsen's remains.
SGT Jacobsen was posthumously awarded the Purple Heart, commemorating
his courage and extraordinary sacrifice in service to our country.
He will be buried on October 4 in Ferndale, CA. The Army offered SGT
Jacobsen full burial honors in Arlington National Cemetery, but his
family chose his final resting place close to home. Nothing can fully
account for the loss suffered by SGT Jacobsen's family, and all those
who loved him. But I hope this finally brings a sense of closure and
peace.
As we remember SGT Jacobsen and honor his service to the United
States we are also reminded of the nearly 1,800 service members who
remain unaccounted for from the Vietnam war.
Men and women like Timothy J. Jacobsen from towns and cities across
California, and across America, went off to fight in Vietnam. Many of
them never came back. We will never forget the lives they led and the
sacrifices they made. And we will never rest in our effort to bring
each and every American who gave their life home to a Nation that
honors their service, and a community that has never forgotten them.
____________________
SECRETARY WAYNE CLOUGH
Mr. LEAHY. Mr. President, on July 1, G. Wayne Clough became the new
Secretary of the Smithsonian Institution. Last week, the New York Times
wrote a profile on Dr. Clough that highlights his markedly different
leadership and style. This style is a welcome one to me.
As a member of the Smithsonian Board of Regents, I look forward to
working with Secretary Clough on the many challenges that face the
Smithsonian. So all Senators and their staff can see that he is off to
a solid beginning, I ask unanimous consent that the article in the New
York Times be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the the New York Times, Sept. 15, 2008]
Smithsonian Chief Hopes To Institute Big Reforms
(By Robin Pogrebin)
It is hard to picture G. Wayne Clough dropping $14,000 of
the Smithsonian Institution's money to charter a Learjet, or
$724 to put his family up at the Four Seasons for a night.
Part of his mandate, after all, is to guard against the
abuses that brought the ouster of his high-spending
predecessor, Lawrence M. Small.
But Dr. Clough, the new secretary of the Smithsonian--its
chief executive--is expected to do far more than set a good
example. He is charged with nothing less than transforming a
162-year-old bear of an institution--with 19 museums and
galleries, a zoo, 9 research centers, and an operating budget
of $1 billion--into an ethical, tightly run organization. ``I
go to work every day a little bit nervous,'' he said in an
interview last week in New York.
The Smithsonian has been through the wringer over the last
two years, with disclosures of improper spending and sharp
criticism from Congressional committees about sloppy
governance.
So after taking over on July 1, Dr. Clough, 66, a widely
respected former president of the Georgia Institute of
Technology, spent much of his first two months calling on
members of Congress. Winning back the good will of lawmakers
will be crucial, since the federal government provides 70
percent of the Smithsonian's operating budget.
Dr. Clough (pronounced cluff) said he had assured
legislators that reforms were already under way to guard
against future misconduct.
The Smithsonian's museum directors must now have their
travel approved by an undersecretary of the institution, Dr.
Clough said. Every new executive must undergo a thorough
background check, and ethics is a regular topic of discussion
among the Smithsonian's management.
Dr. Clough's own travel must now be approved by the
Smithsonian's chief financial officer. Dr. Clough has also
resigned from his salaried positions on three corporate
boards. From 2000 to 2006 his predecessor, Mr. Small, spent
64 business days serving on corporate boards that paid him a
total of $5.7 million.
Mr. Small's salary was $916,000 in 2007, but the
Smithsonian is paying Dr. Clough $490,000. He pays his own
rent on a town house near the fish market in southeast
Washington; Mr. Small used a Smithsonian housing allowance
for his town house in an affluent neighborhood in northwest
Washington. Dr. Clough's home is about a quarter-mile from
the Smithsonian museums, so he can walk to work; Mr. Small
used a chauffeur.
While he is earning less than he did at Georgia Tech, where
his salary package was worth $551,186, Dr. Clough said he
hadn't looked back. ``This is something I wanted to do,'' he
said.
He said he was excited by the idea of collaborations
between art and science at the Smithsonian, by the depth of
expertise to be found at its various museums and research
centers and by the Smithsonian's potential to be an education
resource for the country.
And he seems to be having a good time. He cited some
serendipitous encounters, like happening upon a photographer
at the National Museum of Natural History who had completed a
folio of rare plants with the help of Smithsonian biologists.
He observed researchers examining endangered languages at the
National Anthropological Archives of the Smithsonian in
Suitland, Md. And he watched the wing of a German World War
II plane being readied at the Paul E. Garber facility, also
in Suitland, for the Smithsonian's Steven F. Udvar-Hazy
Center near Dulles International Airport, an extension of the
National Air and Space Museum.
``I'm thrilled by these little pleasures,'' he said.
On his visit to New York, Dr. Clough spent four hours on
Thursday at the Cooper-Hewitt National Design Museum, another
Smithsonian museum, meeting the director, Paul Thompson, and
curators; viewing its collections; and talking with the
textile artist Sheila Hicks, who happened to be there.
``During all of these discussions, his interest in and
knowledge of design was very apparent,'' Mr. Thompson said.
It is clear that Dr. Clough will set a different tone. Mr.
Small came from the corporate corridors of Fannie Mae, but
Dr. Clough has spent his career on college campuses in the
unglamorous field of engineering.
Born in Douglas, Ga., Dr. Clough exudes a low-key Southern
charm. He is plain-spoken, unvarnished and sometimes a little
corny.
[[Page 23621]]
Asked about the tension at the Smithsonian between art and
science, he said: ``I love the arts. I love beauty. Every day
I try to notice something beautiful. It could be a flower, it
could be a painting, it could be a sculpture, it could be a
piece of music.''
As for setting the Smithsonian back on course, some changes
in governance were adopted before he arrived by the board of
regents, the organization's governing body, and by Cristian
Samper, who was appointed acting secretary after Mr. Small
resigned in March 2007. (Mr. Samper has returned to his post
as director of the natural history museum.)
The board now meets four times a year, not three. The
Smithsonian's inspector general, who conducts audits and
prevents waste, now reports directly to the board chairman,
not the secretary.
Dr. Clough said he planned to decentralize the institution,
to reduce the number of undersecretaries from four to three
and to give them more decision-making authority. ``I don't
want to have everything come to me if it doesn't need to,''
he said. ``We have got to be an agile institution.''
``My feeling on organizations is they should be as little
top-heavy as possible,'' he added. ``Let's take the money we
might be spending on the superstructure and give it to the
museums.''
He said he also hoped to improve coordination. The
Smithsonian has about a dozen educational centers, for
example, he said, ``but no pan-institutional concept'' for
education.
While he said he believed the federal government should
maintain its financial support, Dr. Clough said he embraced
Congress's message that the Smithsonian should raise more of
its own money to cover expenses. ``We need to get more self-
reliant,'' he said.
That means a major capital campaign of $1 billion over five
to seven years, a first for the institution, which will start
next year.
Dr. Clough said he would devote considerable effort to
cultivating donors. ``If we're going to get facilities gifts,
we need to have opportunities for people that they can
emotionally attach to,'' he said, like particular
exhibitions. ``You've got to work with donor intent.''
At the same time, he said, he recognized the perils of
giving contributors too much of a say in how their money is
spent, a challenge with which the Smithsonian is already
familiar. Last year some regents questioned the
appropriateness of a $5 million gift from the American
Petroleum Institute for the Ocean Initiative exhibition hall
of the natural history museum. The gift was rescinded.
``A donor might want programming input there is always
going to be that element of nuance there,'' Dr. Clough said.
``You have to understand the dangers and the possibilities.''
He said he also hoped to compete for federal money beyond
the direct annual appropriation. If the Smithsonian set out
to develop a school science and technology curriculum, for
example, Dr. Clough said, ``we might go to the Department of
Education and get that funded, as opposed to sitting back and
hoping that money comes to us.''
Other ideas include appealing to foundations and seeking
revenue-generating activity on the Web, making the
Smithsonian's extensive photography collection available for
commercial purposes, for instance. ``We're not looking to
make a profit,'' he said. ``We're just looking to recover our
costs.''
During his nearly 14 years as president of Georgia Tech,
Dr. Clough oversaw two capital campaigns that raised nearly
$1.5 billion in private gifts. Annual research expenditures
increased to $425 million from $212 million and enrollment to
more than 18,000 from 13,000. Georgia Tech has consistently
ranked among the nation's Top 10 public research
universities.
At the Smithsonian, Dr. Clough said he planned to spend the
next year developing a strategic plan ``to help us get a fix
on where we are'' and to set fund-raising priorities. He said
he wanted to consult people across the institution, with the
added dividend that it ``will help restore some of the
morale.''
The Smithsonian needs to be lean, but it must maintain the
basic levels of staffing that, for instance, allow the zoo to
keep feeding the animals, Dr. Clough said. The institution's
employment levels have shrunk in recent years, declining by
nearly 600 employees since fiscal year 1993 to the current
level of 5,960.
``We have to stabilize it,'' Dr. Clough said. ``We can't be
the institution we hope to be if we sit around and let that
happen.''
At the same time he understands Congress's concerns and
says he is ready to be grilled when the time arrives, perhaps
next spring, when appropriations hearings are usually held.
``It's O.K. for us to be asked our relevance and what we're
doing for the country,'' he said. ``I think we can make that
case.''
This article has been revised to reflect the following
correction: An article on Monday about plans for the
Smithsonian Institution outlined by G. Wayne Clough, its new
chief executive, misstated the goal of the institution's
capital campaign. It is to raise more than $1 billion over
five to seven years, not $5 million to $7 million.
____________________
TORTURE
Mr. FEINGOLD. Mr. President, since 2001, top officials in the Bush
administration have secretly authorized the use of abusive
interrogation techniques that in some cases have risen to the level of
torture. In doing so, they have shown flagrant disregard for statutes,
for treaties ratified by the United States, and for our own
Constitution. They have misled the American people, undermined our
values, and damaged our efforts to defeat al-Qaida.
There are some who downplay the abusive treatment of detainees that
has been uncovered at Abu Ghraib, Guantanamo Bay and elsewhere as
isolated incidents, conducted by a handful of rogue low-level
interrogators. But the facts indicate where the true responsibility
lies: with an administration that gave the green light to torture and a
Justice Department that said anything goes.
Make no mistake, torture is against the law. The United States is a
party to the Convention Against Torture, the Geneva Conventions, and
the International Covenant on Civil and Political Rights. The United
States Code criminalizes any act ``specifically intended to inflict
severe physical or mental pain or suffering.'' And in 2005, Congress
reiterated in the Detainee Treatment Act that cruel, inhumane or
degrading treatment of detainees in U.S. custody is not permitted, no
matter where those detainees are held.
Notwithstanding these obligations, top administration officials have
continuously sought and found ways to disregard the legal and ethical
boundaries on acceptable detainee treatment. On January 25, 2002,
Alberto Gonzales, in his capacity as counsel to the President, signed a
memo arguing that Taliban and al-Qaida detainees were not protected by
the Third Geneva Convention on the Treatment of Prisoners of War. He
stated that ``[i]n my judgment, this new paradigm renders obsolete
Geneva's strict limitations on questioning of enemy prisoners and
renders quaint some of its provisions . . .''
On February 2, 2002, the President issued an order determining that
al-Qaida and Taliban detainees were entitled to neither prisoner of war
protections under the Geneva Conventions nor the protections of Common
Article Three. Gonzales also solicited from the Department of Justice
Office of Legal Counsel, the now infamous ``Bybee memo,'' issued in
August 2002, which in the context of the criminal prohibition on
torture defined torture narrowly as the infliction of ``intense pain or
suffering of the kind that is equivalent to the pain that would be
associated with serious physical injury so severe that death, organ
failure, or permanent damage resulting in a loss of significant bodily
function will likely result.'' The memo also contained the extreme--and
dangerous--legal theory that the President, as commander in chief,
could disregard any congressional enactment that interfered with his
ability to interrogate enemy combatants. These positions were
reiterated in March 2003, when another OLC memo was sent to William J.
Haynes, general counsel of the Department of Defense.
And the OLC did not stop at general guidance. In a hearing this year
before a House subcommittee, Steven Bradbury, Principal Deputy
Assistant Attorney General at OLC, confirmed that his office had
advised the CIA that the regulated use of waterboarding did not
constitute torture for purposes of the criminal prohibition against
torture.
High-level administration officials also have not hesitated to issue
policies permitting abusive treatment of detainees. On November 27,
2002, Haynes sent a memo to Secretary of Defense Donald Rumsfeld that
asked him to approve 15 interrogation techniques for use at Guantanamo
Bay, including hooding, 20-hour interrogations, isolation, sensory
deprivation, forced nudity, threatening detainees with dogs, and
putting detainees in ``stress positions'' for up to four hours.
Rumsfeld not only approved the techniques, he added a hand-written
note: ``I stand for 8-10 hours a day. Why is standing limited to 4
hours?''
[[Page 23622]]
Rumsfeld later rescinded the authorization of some of these
techniques for use at Guantanamo, and reauthorized the use of others.
But the consequences of these high-level approvals were far-reaching. A
recent report by the Department of Justice Office of the Inspector
General revealed that techniques authorized by Rumsfeld were used on
detainees at Guantanamo Bay, both during the period they were
authorized and after they had been rescinded. And such behavior was not
limited to Guantanamo Bay. According to the 2004 ``Review of Department
of Defense Detention Operations and Detainee Interrogation
Techniques,'' known as the Church Report, the Combined Joint Task Force
in Afghanistan also developed, authorized and implemented interrogation
procedures similar to those Rumsfeld had approved in 2002. The Church
Report and the ``Final Report of the Independent Panel to Review DOD
Detention Operations,'' known as the Schlesinger Report, also document
how, in August 2003, MG Geoffrey Miller was sent from Guantanamo Bay to
Iraq, and brought with him Guantanamo policies allowing the use of
harsher interrogation techniques. Shortly thereafter, LTG Ricardo A.
Sanchez, the top military official in Iraq, formally adopted techniques
heavily influenced by those in use at Guantanamo, such as stress
positions, forced sleep adjustment, and the use of dogs, although some
of these were later rescinded.
While OLC was issuing memos effectively saying there were no legal
restrictions on interrogations and high-level officials were
authorizing abusive techniques, there is evidence to suggest that
interrogators on the ground were given very little information about
exactly what was and was not permitted. During a Judiciary Committee
hearing on interrogation policy in June, I asked Department of Justice
inspector general Glenn Fine whether he thought that military
interrogators had clear guidance on what techniques were permissible,
given the administration's shifting policies. He responded that changes
in policy ``didn't always get down to the level of the interrogators''
and that, at times, ``they weren't sure or aware of what exactly was
authorized.'' Likewise, the Schlesinger Report stated that ``[t]he
existence of confusing and inconsistent interrogation technique
policies contributed to the belief that additional interrogation
techniques were condoned.'' In light of all this, the administration's
insistence that low-level interrogators are solely to blame for
incidents of detainee abuse simply is not plausible.
Many individuals who were aware of what was happening raised
concerns. Secretary of State Colin Powell wrote a January 2002 memo
that weighed the costs and benefits of trying to evade the Geneva
Conventions, noting that to do so would ``reverse over a century of
U.S. policy and practice in supporting the Geneva Conventions and
undermine the protections of the rule of law for our troops.'' Others
raised concerns as well. According to the DOJ inspector general's
report on the involvement of the FBI in military interrogations,
several FBI agents ``became deeply concerned not only about the
efficacy of these techniques but also about their legality.'' In 2002,
the FBI Director decided unequivocally that FBI agents would not
participate in interrogations that used abusive techniques. In a
November 7, 2002, memorandum for the Office of the Army General
Counsel, Army COL John Ley stated that he believed that some of the
techniques that the Pentagon was considering for use at Guantanamo Bay
and that were later approved by Rumsfeld--could violate both the
Federal criminal prohibition on torture and the Uniform Code of
Military Justice. He expressed concern not only about the legality of
the interrogation techniques, but also about eroding public support and
losing the moral high ground. And in a hearing before the Senate Armed
Services Committee in June, RADM Jane Dalton, who served as legal
adviser to the Chairman of the Joint Chiefs of Staff from June of 2000
until June of 2003, testified that all four of the Armed Services were
concerned about authorizing new interrogation techniques.
Fortunately, in 2006 after the Detainee Treatment Act became law, the
Department of Defense finally agreed it would no longer authorize the
use of harsh interrogation techniques by military personnel, and
ordered that all personnel follow the interrogation policies laid out
in the Army Field Manual. I have strongly supported proposals to
require all intelligence agencies--specifically the CIA--to do the
same. For far too long, this administration has failed to abide by the
law and to protect our values. The use of abusive interrogation
techniques is unsupportable on moral, legal or national security
grounds. It does not represent who we are as a nation, and it does not
make America safer.
The responsibility for the use of immoral, illegal and counter-
productive interrogation techniques does not stop with the
interrogators who employed them. It extends to those in the highest
echelons of the Bush administration that sought to encourage these
techniques, who confused interrogators with constantly shifting
policies, and that ignored the many voices who told them that what they
were doing was unlawful and that it was not the American way. And it
extends to the President himself, who has acknowledged publicly that in
2003 he approved meetings of his most senior national security
officials to consider and sign off on so-called enhanced interrogation
techniques. The abuses that have occurred under this administration's
watch have constituted one of the darkest episodes in this Nation's
recent history. They have fed growing anger at and opposition to U.S.
policies, and in the process have undermined our efforts to combat al-
Qaida and associated extremist groups. The next administration will
have to work long and hard to undo the damage that has been done to our
country's reputation and national security and to restore the rule of
law.
____________________
RESOURCE FAMILY RECRUITMENT AND RETENTION ACT
Mr. ROCKEFELLER. Mr. President, I rise today to voice my support for
the Resource Family Recruitment and Retention Act of 2008, which was
introduced on September 16, 2008, by my good friend Senator Blanche
Lincoln of Arkansas. This is an important piece of legislation, and I
am proud to be an original cosponsor.
I have long been a member of the Congressional Coalition on Adoption
and worked in a bipartisan manner to support adoptive and foster
parents and children. In 1997, I strongly advocated for the passage of
the Adoption and Safe Families Act which has made a significant
difference in the lives of vulnerable children. Since the
implementation of the Adoption and Safe Families Act, the number of
children adopted out of foster care has more than doubled. In West
Virginia alone, more than 3,600 children have been adopted out of the
West Virginia foster care system. This is a real victory for these
children who deserve the love and comfort of a safe, permanent home.
However, with more than 500,000 children still in foster care, it is
clear that more needs to be done. This is why I was so pleased when the
Senate passed the Fostering Connections to Success and Increasing
Adoptions Act by unanimous consent. This legislation will provide
additional support for grandparents and other relatives who provide a
safe home for children in foster care. Additionally, this legislation
will allow states to continue to assist older foster children, those
who are 18, 19, 20, or 21 years old, so that these children aging out
of the system do not have to choose between pursuing an education or
working to prevent becoming homeless. I believe that this legislation
is another step towards the ultimate goal of each child having a safe,
permanent home.
Senator Lincoln's legislation would also help bring us closer to this
goal. A study conducted in 2005 by the U.S. Department of Health and
Human Services found that one in five foster homes leaves the system
each year. One-fifth of the foster parent population provides 60 to 80
percent of all foster care. Foster parents sacrifice in tremendous ways
to provide a home for vulnerable children. The Resource Family
Recruitment and Retention Act would
[[Page 23623]]
support their efforts by awarding grants to States to improve the
leadership, support, training, recruitment, and retention of foster
care, kinship care, and adoptive parents.
It is my hope that organizations and individuals such as Mr. Dennis
Sutton of the Children's Home Society of West Virginia, who has worked
tirelessly in his effort to secure a home for all of West Virginia's
vulnerable children, will have the financial support to find and retain
enough foster parents to make this goal a reality. Foster and adoptive
parents will greatly benefit from the Resource Family Recruitment and
Retention Act, but the big winners will be the children who are placed
loving homes. We need to invest and focus on these families.
____________________
AFRICOM
Mr. FEINGOLD. Mr. President, today marks the full operational launch
of the U.S. Africa Command, known as AFRICOM. I have long supported the
idea of a unified regional combatant command for Africa that recognizes
the continent's growing strategic importance for U.S. security and that
is coordinated with other U.S. agencies. As I have discussed many times
on the Senate floor, we can not pretend that weak and failing states,
protracted violent conflicts, maritime insecurity, narcotics and
weapons trafficking, large-scale corruption, and the misappropriation
and exploitation of natural resources are not relevant to our long-term
interests. At the same time, there are exciting economic and social
developments underway across Africa that provide openings for the
United States to help save lives, strengthen governance institutions,
and build long-term partnerships. It is not a question of whether the
United States needs to work proactively and collaboratively with
African nations in these areas but a question of how we should do so to
maximize our efficacy while minimizing potential backlash.
Toward that end, the standup of AFRICOM presents both opportunities
and risks. Indisputably, our Nation's military strength is one of our
greatest assets and may be necessary to deal with some of the emerging
national and transnational threats, such as narcotics trafficking,
piracy, and terrorism. Military training, equipping, and logistical
support are essential to develop strong, disciplined national
militaries and also strengthen regional peacekeeping, especially with
African Union missions currently operating in Somalia and Sudan.
Furthermore, in many postconflict societies, such as Liberia, our
military expertise can assist in demobilization, disarmament, and
reintegration while also helping to rebuild that country's army.
However, while militaries make important contributions in these
areas, they are insufficient to address the underlying causes of
violence and instability in Africa. Lasting security requires
reconciling political grievances, improving governance, strengthening
the rule of law, and promoting economic development: tasks for which
our military, or any military for that matter, cannot be the lead. To
advance and support those tasks, the United States needs to continue to
invest in our diplomatic, economic, humanitarian, and development
capacities on the continent. We need a unified interagency approach to
these challenges in which AFRICOM is supporting, not eclipsing, the
work of our diplomats, our aid workers, and other key partners.
I am concerned that the opposite is happening. Despite initial
ambitions to have 25 percent of AFRICOM's headquarters' positions
filled by nonmilitary staff, that number has been severely reduced
because of resource and staffing limitations in civilian agencies.
Furthermore, a report by the Government Accountability Office published
this July stated that concerns persist among civilian agencies and
nongovernmental organizations that the military is becoming the lead
for U.S. policy in Africa. Even as Pentagon officials claim this is not
their intention, it is hard to argue with the numbers. While civilian
agencies operating abroad continue to face resource constraints, more
and more resources are being invested in military relationships and
assistance in Africa.
Given this context, it is not surprising that some are casting
AFRICOM's emergence as a signal of further militarization of U.S.
Africa policy. Such perceptions of militarization are dangerous and
risk undermining our ability to engage local populations. As I have
said many times, the military has a critical role to play in helping
Africans address their security challenges, but we must be careful that
it does not outweigh or overshadow other forms of engagement. This is
especially true in cases where local security forces are engaging in
repressive tactics or committing serious human rights abuses, such as
in Chad or Ethiopia. In these cases, we run a very real risk that U.S.
military engagement could be seen by local populations as complicit in
those abuses and become a target of resulting grievances. Before we
jump at short-term opportunities to exert military influence, we need
to consider seriously the long-term risks to U.S. stature and
interests.
Mr. President, this is not to say that AFRICOM is not capable of such
nuanced strategic planning and interagency coordination. I have met
with General Ward and know that he is aware of both the opportunities
and risks as AFRICOM stands up. I still believe that a unified regional
combatant command can contribute to broader U.S. Government efforts to
confront the many security challenges in Africa and can provide
additional tools to pursue coherent and strategic objectives across the
continent. But to fulfill that potential, AFRICOM must demonstrate in
its inaugural months and years that it recognizes the unique political
realities throughout Africa, concentrates on its defined mandate, and
takes its lead from our diplomats. Simultaneously, we in Congress must
act to ensure that our diplomats have the resources they need to take
that lead in formulating and implementing comprehensive U.S. strategies
in Africa.
____________________
NATIONAL ADOPTION MONTH
Ms. LANDRIEU. Mr. President, I rise today in honor of National
Adoption Day and National Adoption Month. Senator Coleman and I
understand that the Senate passed our resolution recognizing National
Adoption Day and National Adoption Month. I stand before you today and
challenge every Member of Congress to take this opportunity to be the
voice for children who do not necessarily have someone to speak for
them.
As chair of the Congressional Coalition on Adoption, I strongly
believe that ``there is no such thing as an unwanted child, just
unfound families.'' The Hague Convention recognizes ``that the child,
for the full and harmonious development of his or her personality,
should grow up in a family environment, in an atmosphere of happiness,
love and understanding.'' Unfortunately, not all children have a family
of their own, but through adoption our children have the opportunity to
find their ``forever family.''
Nearly half of all Americans have been touched by adoption, and last
year more than 4,200 children became members of permanent loving
families through adoption celebrations that were held in all 50 States,
the District of Columbia, and Puerto Rico. I commend every State for
its efforts, but we still have miles to go.
Between 2002 and 2007, approximately 4.8 million children were
serviced by the U.S. foster care system, and only 310,000 of them were
adopted by ``forever families.'' Children in foster care are some of
the most vulnerable members of our society, and we must do everything
in our power to make sure they have the necessary tools to live a
normal healthy life. As Members of Congress we have taken a stance in
helping children move from foster care to permanent, adoptive homes by
passing the Fostering Connections to Success and Increasing Adoptions
Act of 2008. However, National Adoption Day gives us the chance to
experience firsthand the joys that adoption brings to the lives of our
children and their families.
[[Page 23624]]
President Bush has recognized the importance of adoption to children
and our Nation. That is why he declares November to be National
Adoption Month. This year National Adoption Day occurs on November 15
as a part of National Adoption Month. National Adoption Day is an event
to raise awareness of the 129,000 children in foster care who are
waiting for permanent families. Since the first National Adoption Day
in 2000, nearly 20,000 children have joined ``forever families'' on
this special day. This year we hope to have events in all 50 States,
the District of Columbia, and Puerto Rico.
I want you to picture what happens on this fall day, children
running, laughing, and playing with their new parent. Think about a
girl or boy planning their special outfit and joyously awaiting the
family celebration. Imagine the excitement welling up inside of a child
as she looks into her new parent's eyes and knows she is finally part
of a family. She will never dread the sound of a car coming to take her
away again or wonder where she will lay her head or which school she
will be moved to.
Now picture the other dramatically different reality. There are
approximately 513,000 current foster care children in the United
States, and 114,000 of them are waiting for adoption. Since 1987, the
number of children in foster care has nearly doubled, and the average
time a child remains in foster care has lengthened to nearly 3 years.
Each year, approximately 24,000 children in foster care will age out of
the system without ever being placed with a permanent family.
According to a survey by the Dave Thomas Foundation for Adoption,
many potential adoptive parents have considered foster care adoption,
but ``a majority of Americans hold misperceptions about the foster care
adoption process and the children who are eligible for adoption.'' For
example, ``two-thirds of those considering foster care adoption are
unnecessarily concerned that biological parents can return to claim
their children and nearly half of all Americans mistakenly believe that
foster care adoption is expensive, when in reality adopting from foster
care is without substantial cost.''
Most foster children entered into State custody because their parents
were either unable or unwilling to care for them. Not only are children
separated from parents, but in many cases, siblings are separated when
they are placed in foster care. Over half the children in foster care
are 10 years of age or older and have more difficulty being adopted.
These children are just waiting to flourish with the right parent's
guidance.
In Louisiana there are 4,541 children in foster care and 1,162 of
them are waiting to be adopted. I would like to share with you how
foster care and adoption has affected some of our children in
Louisiana.
Ian is 15 years old and first entered foster care at the age of 5 due
to physical abuse and lack of supervision by his mother. Ian's mother
surrendered her parental rights, and he and his three sisters were
placed for adoption. Ian's younger sisters were adopted by their foster
parents.
In November 2006, Ian was placed in a specialized foster home after
completing a facility program. This family has worked very closely with
Ian in learning to trust others, making appropriate choices, on
becoming part of a family unit, and being able to ``attach'' to others
in preparation of an adoptive family. Ian is working very hard to
adjust to a ``traditional family lifestyle'' and is progressing well in
this family setting. Ian states he wants an adoptive family that says,
``You are our child and we will not turn you away.''
Ian is very personable and is looking for acceptance in life. He is
polite, affectionate, and very adventurous. Ian enjoys playing
basketball, riding bikes, reading Harry Potter books, and playing video
games. Numerous recruitment efforts for an adoptive home have been made
since Ian was placed in the specialized foster home, but an adoptive
family has not been found to date. One of the greatest barriers to
adoption is a lack of resources of prospective adoptive families
willing to adopt older children.
While Ian is still desperately searching for someone to love and care
for him, Christopher, through all of his struggles, has found that
sense of permanency. Christopher is 12 years old and first entered
foster care at the age of 2 months. He was subject to abuse by his
biological father that resulted in a skull fracture, subdural hematoma,
bruises, bites, and burns. Christopher had many developmental delays
and problematic behaviors requiring placement in specialized foster
homes. Christopher's removal was requested by several foster placements
because of behavioral issues. In June 2006, a foster parent who had
provided respite for Christopher was asked to consider the fostering of
Christopher as the child had formed a very strong bond to this foster
parent and her children during his respite visits. Upon placement in
this home, drastic improvements were noted in Christopher's behavior,
socialization, academic achievements, and physical health. In all
appearances, Christopher was now functioning in the normal range for
his age and with minimal evidence of neurological impairment.
Christopher's neurologist continued to marvel at Christopher's
functioning considering the extensive injuries he had suffered as an
infant.
One day while the adoption social worker was visiting with
Christopher and his foster mother, Christopher said he wanted to change
his name to ``Kantrell.'' The social worker responded ``Kantrell (and
Christopher's last name), that does sound nice.'' Christopher replied
no, ``Kantrell'' and the last name of his foster mother. The social
worker stated that she immediately noted a glistening in the eye of the
foster mother who replied, ``Is that really what you want,
Christopher?'' Christopher responded that was very much his desire. The
adoption of Christopher was finalized in January 2008 with Christopher
changing his name to ``Kantrell.'' Kantrell has continued to thrive in
his adoptive home and is a delight to all who know him.
Each year, 79,000 children and youth who exit foster care leave
without a permanent home or belonging to a family. I could stand here
every day for the next month and talk about each child who needs to be
adopted out of foster care. The bottom line is that each of these
children, from 1 day old to 22 years old, needs permanency. They all
need a loving, nurturing family that will help them to grow, bring out
their unique personalities, and transform them into confident and happy
adults.
On National Adoption Day, I have faith that we can be the catalyst to
securing a permanent loving family for every child. The miracle of
adoption cannot be explained, but the loving parents who are holding
their children for the first time today are living examples of how
dreams can be realized. As an adoptive mother myself, I find that words
cannot adequately explain the miracle of adoption. I can only take a
moment to offer my most humble thanks, gratitude, and appreciation to
all those across the Nation who have given their Saturday to help find
waiting children safe and loving homes.
Let us continue to remember that when National Adoption Month and Day
end there are still thousands of children who need that sense of
permanency. I challenge Congress to make these children their first
priority and not another statistic to be studied. Please join us in
supporting National Adoption Day and National Adoption Month by
participating in events held across the country celebrating this most
joyous, hopeful act.
____________________
HIGHER EDUCATION LOANS
Ms. LANDRIEU. Mr. President, this past August the President signed
into law the Higher Education Opportunity Act which reauthorized
programs for postsecondary and higher education. Contained within the
reauthorization is the Education Disaster and Emergency Relief Loan
Program. The bill established a loan program within the U.S. Department
of Education to provide critically needed low-interest guaranteed loans
to institutions in the event of catastrophic natural or manmade
disasters.
[[Page 23625]]
The colleges and universities in Louisiana, particularly those in the
New Orleans area, remain in many ways financially crippled by Hurricane
Katrina. Three years after Katrina and Rita devastated Louisiana and
Mississippi these institutions still have nearly $700 million in
unrecovered losses. The estimates for Gustav and Ike are still not
finalized, but at this stage the damage is purported to be at least $46
million to State colleges and universities alone.
Before Katrina, the 11 colleges and universities in the New Orleans
area educated 70,000 students. Today, that number is only 50,000, but
it continues to slowly rebound. This growth comes despite the fact that
our institutions of higher education experienced more than $1 billion
in physical damages and operational losses due to the 2005 hurricanes
and have recovered less than half of those losses. Higher education
institutions are the largest employers in New Orleans both before and
after Katrina. The higher education industry in New Orleans continues
to attract millions of research dollars and supports industries as
diverse as biotechnology, aerospace, and medicine. The work of each
institution in the city can be seen in every aspect of the region's
recovery, from the redesign of the city's troubled public schools to
coastal restoration and hurricane protection to the provision of health
care across the region. They engage in this important work even as they
continue to struggle with mounting revenue losses, buildings that
remain in disrepair due to flooding, and the loss of key faculty and
staff.
I call today on the Secretary of Education to make the Education
Disaster Loan Program a top regulatory priority. It is my understanding
that some Department of Education officials have said that they will
not promulgate regulations on any newly created programs in the Higher
Education Act until funds are appropriated. This simply is not
acceptable. This issue has become a major roadblock in the current
disaster funding process, and it is my hope that the Secretary and the
Department will move expeditiously to establish regulations so that the
program may provide crucial assistance to the colleges and universities
impacted by Hurricanes Katrina, Rita, Gustav, Ike, and the Midwest
floods.
____________________
PRIVACY PROTECTIONS--S. 2321
Mr. LEAHY. Mr. President, I am pleased to announce that, today, after
several discussions, the Bush administration and lead sponsors of the
E-Government Reauthorization Act of 2008, S. 2321, have accepted an
amendment I have drafted to ensure that Americans' privacy comes first
when the Government purchases and uses their most sensitive personal
information. My amendment requires that Federal agencies must conduct
privacy impact assessments before employing outside contractors that
use and market Americans' sensitive personal data.
The addition of privacy protections to the E-Government
Reauthorization Act will help to better protect all Americans from the
growing threats of data breaches, identity theft, and other cyber
crimes. I am particularly pleased about the compromise reached today
because I am a proud supporter of this bill. In 2002, I was an original
cosponsor of E-Government Act, and in the intervening years, I have
worked to promote and strengthen this law.
The E-Government Reauthorization Act is a good bill that will now be
even better because of the privacy protections added by my amendment.
Recently, the Government Accountability Office released a report on
lessons learned about the Government data breaches at the Veterans'
Administration and elsewhere. That report found that Government
contractor responsibilities for preventing and responding to data
breaches should be clearly defined. My amendment takes a small but
important step toward addressing the growing problem of lax data
security by Government contractors by making sure that Americans'
privacy rights are not compromised when they entrust their sensitive
personal information to our Government.
I thank the lead sponsors of this bill for working with me on
compromise privacy language for this bill. I also thank the many
stakeholders who support this bill and my privacy amendment, including
the Center for Democracy and Technology, Symantec, and the Cyber
Security Industry Alliance.
I urge all Senators to support and pass this important legislation.
____________________
HONORING MARYLAND'S OLYMPIANS
Ms. MIKULSKI. Mr. President, today I rise to honor and congratulate
Maryland's Olympic athletes for their performance in the 2008 Beijing
Summer Olympic Games. These dedicated, disciplined, and accomplished
athletes are a source of great pride to Maryland and the country.
Therefore, it is with great enthusiasm that I commend:
Freddy Adu of Montgomery County, 2008 men's soccer team; Carmel
Anthony of Baltimore, 2008 men's basketball team; David Banks of
Potomac, 2008 men's Olympic rowing team; Maurice Edu of College Park,
2008 men's soccer team; Jun Gao of Montgomery County, 2008 women's
table-tennis team; Georgia Gould of Baltimore, 2008 women's cycling
team; Kathryn Hoff of Towson, 2008 women's Olympic swimming team; Gao
Jun of Gaithersburg, 2008 men's Olympic table tennis team; Bobby Lea of
Talbot County, 2008 men's Olympic cycling team; Mechelle Lewis of
Prince George's County, 2008 women's track & field team; Jessica Long
of Baltimore, 2008 Paralympics swimming team; Khan Bob Malaythong of
Rockville, 2008 men's Olympic badminton team; Tatyana McFadden of
Howard County, 2008 Paralympic wheelchair racing; Scott Parsons of
Montgomery County, 2008 men's canoe and kayak team; Michael Phelps II
of Baltimore, 2008 men's Olympic swimming team; Lauren Powley of the
University of Maryland, 2008 women's field hockey team; Dina Rizzo of
the University of Maryland, 2008 women's field hockey team; Robbie
Rogers of the University of Maryland, 2008 men's soccer team; Gary
Russell of Prince George's County, 2008 men's boxing team; Jamie
Schroeder of Johns Hopkins University Medical School, 2008 men's rowing
team; Phil Scholz of Loyola College, 2008 Paralympic men's swimming
team; Chris Seitz of the University of Maryland, 2008 men's soccer
team; Keli Smith of the University of Maryland, 2008 women's field
hockey team; Scott Steele of Baltimore County, 2008 men's wrestling
team; Natalie Woolfolk of Arnold, Maryland, 2008 women's weightlifting
team.
It is with special pride that I recognize the historical
accomplishments of Baltimore's own Michael Phelps. Michael Phelps has
gone where no Olympian has gone before. In this year's Olympic Games he
won a recordbreaking eight Gold Medals. That is a Gold Medal for every
race he swam in.
Before Michael Phelps shattered the record, the most Gold Medals ever
won by an individual at a single Olympics was seven. That feat was
accomplished by another American swimmer, Mark Spitz. And when Spitz
captured his seven Gold Medals in the 1972 Olympic Games, everyone said
it couldn't be topped.
Everyone, that is, except for Michael Phelps.
The intrepid Michael Phelps didn't just break world records at this
year's Olympic Games; he smashed them. He didn't simply win Gold Medals
in every race he swam; he also set seven new Olympic world records
along the way.
Like so many proud Marylanders and proud Americans, I watched Michael
Phelps win race after race. And leave it to Michael Phelps to leave
some of the best racing for last. What a race he swam August 16th. What
a race; what a nailbiter. Michael Phelps, on his quest to win his
seventh consecutive Gold Medal--this one in the men's 100 meter
butterfly--trailing behind, and then he came roaring back from seventh
place at the turn to edge Serbia's Milorad Cavic by one one-hundredth
of a second. What a race. What an epic race.
I will also never forget Phelps' last race of this year's Olympic
Games. It was the race that would determine whether Phelps would become
the first Olympic athlete to win eight Gold Medals during a single
Olympic Games. It
[[Page 23626]]
was the race that if won would mark Phelps as the greatest swimmer and,
perhaps, the greatest Olympian of all time.
I watched that historic race, as did so many Americans, with a racing
heart. It was the men's 4 x 100 medley. When the race was finished--
giving Phelps his eighth Gold Medal of the 2008 Beijing Olympic Games--
I heard a great eruption.
It was an eruption of pride and joy. It wafted out from apartments
and houses that left their windows open on that warm summer night. It
came from the streets below, where people spilled on sidewalks hugging
and hollering. It came from cars that tooted their horns in solemn
pride. It was in the air and all around that night.
Michael Phelps, born and raised in Rodgers Forge, MD, has gone where
no Olympic athlete has gone before. His performance at this year's
Olympic Games has placed him in the pantheon of the greatest athletes
of all time. And he has accomplished all this with great grace and
humility.
Throughout his exceptional swimming career, Phelps has always been
quick to praise those who have helped him along the way. He shows
special reverence to his mother Debbie, who, as a single mom juggling
kids and multiple jobs, taught him the values of perseverance and
courage in the face of obstacles.
As a young swimmer at the North Baltimore Aquatic Club, Phelps
arrived day after day and gave his maximum effort. His work ethic is a
testament to his strong, value-driven Baltimore upbringing. And he is
living proof that if you can dream it, you can achieve it.
I am so proud to welcome Michael Phelps back to Baltimore. He could
have gone on to any city. Instead, he came back to his family and to
his community. He came back to the city where he first learned the
values of hard work and perseverance.
So welcome home, Michael. And welcome home to all the Olympic
athletes who served Maryland--and our country--so proud at this year's
Olympic Games.
____________________
IDAHOANS SPEAK OUT ON HIGH ENERGY PRICES
Mr. CRAPO. Mr. President, in mid-June, I asked Idahoans to share with
me how high energy prices are affecting their lives, and they responded
by the hundreds. The stories, numbering well over 1,200, are
heartbreaking and touching. To respect their efforts, I am submitting
every e-mail sent to me through an address set up specifically for this
purpose to the Congressional Record. This is not an issue that will be
easily resolved, but it is one that deserves immediate and serious
attention, and Idahoans deserve to be heard. Their stories not only
detail their struggles to meet everyday expenses, but also have
suggestions and recommendations as to what Congress can do now to
tackle this problem and find solutions that last beyond today. I ask
unanimous consent to have today's letters printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
The company I work for has just closed the doors to the
center I have worked in for eight years and offered us jobs
in a center over 50 miles away. Because I am three miles
short of qualifying for a moving package, I (and 64 of my co-
workers) will be forced to commute over 50 miles each way
every day. We live in a rural area so public transportation
is not an option. To get a new job would cut my wages more
than half, so I must follow my job. I have three small
children (ages 2, 4 and 6), so I cannot stay away during the
week and go home only on weekends.
I do not know what I will do if the cost of gas continues
to rise. I, along with others that I know, could actually
lose everything we have worked so hard to achieve. For the
first time, I am really afraid of what is happening to my
country.
Please do something now.
The rising price of gasoline is hurting nearly every family
in America. We are tired of Congress doing nothing but bowing
down to the environmentalists.
It is time for Congress to develop a program which allows
the exploration of America's energy sources without
materially affecting our environment. Congress should put our
families first, ahead of the environmentalists!
Yalon, Pocatello.
____
In response to your request on the impact of high gas
prices, here is my story:
To help reduce the impact of higher fuel prices, I am
taking personal responsibility of my own actions. It is
actually really easy. I have made a habit of driving much
less by riding a bike, walking, combining trips and cutting
out unnecessary trips. The net impact has been less money
spent at the pump (conservation) and I am in better health
because of it.
As I ride around town, not a day goes by that I come across
people letting their vehicle run idle in a parking lot while
they do their errands. This includes sheriff's vehicles that
idle outside the nearby office. This lack of overall
awareness regarding high oil prices tells me we are not even
close to changing the wasteful consumption habits Americans
have adopted over many years. In the meantime, we learned
nothing from the 70s. Since then, our politicians have failed
to adopt a viable, self reliant energy policy. Instead, we
drive bigger vehicles and have become even more reliant on
mid-east oil. The money that is being sent overseas is what
allows the bad guys to fund the terrorist efforts. One in
which we are fighting at the cost of over 4,000 deaths, many
more permanent injuries and billions of borrowed taxpayer
dollars. At this point, there is absolutely no end in sight
for the war that most politicians will still not admit is all
about the oil. After five years of false promises, we now
have record oil prices and, what I believe is, over an eight
trillion dollar deficit.
What this all has meant for me is, I woke up. I now realize
how terribly screwed up things are in Washington. We are
running out of oil! And the rest of the world wants the same
standard of living we have! And the lack of resources and the
environment cannot allow things to stay the same way, period!
In summary, your e-mail tells me you are not looking at the
big picture. We cannot drill our way out of this. At best, it
would only be a band-aid. I fear too many people still
believe the same career politicians that are to blame for
getting us into the mess we are in. They will say whatever it
takes to fool voters that they have the right answers, even
though history proves otherwise. What a shame.
Although I know I am fooling myself to think otherwise, I
hope you have the guts to include this during your
presentation to the Senate. Thanks for your time.
Steve.
____
The one theme missing from so much of the concern over the
rising price of energy in our country is searching/
researching for alternatives! To continue to open up every
potential oil source in our own country is so short-sighted
since petroleum is a finite resource and does not solve the
real problem. Our leaders like you need to provide leadership
to help our nation find through research and development
alternative energy resources and stop this nonsense of giving
the oil companies access to every square inch of natural
landscape to extract oil. If our nation had had the guts to
deal with the need to diversify our nation's appetite for
petroleum energy back in the 1970s instead of letting the oil
and auto lobbies keep us dependent on their services, we
would not be in today's mess.
What concerns me is I hear you falling in step with the
international oil corporations [and other groups] that feel
threatened by the US being weaned off of oil products.
[Dynamic leadership that leads us to alternative energy
sources is most important.]
Catherine, Pocatello.
____
Per your request, I am sending information concerning my
concerns about the high fuel prices.
The population [of my town] is less than 1,000 in town with
less than 2,500 total in the entire county. The closest large
city is Blackfoot with Idaho Falls being the next closest.
Idaho Falls is larger, and it contains most of the trade
support that we need. For example, pet supplies and food for
us. It now means, thanks to the higher fuel prices, we can
only travel to Idaho Falls once a month. It takes over $120
to fuel my truck with diesel. With a round trip mileage of
close to 150 miles and making only 16 miles-per-gallon, I am
using close to \1/2\ a tank of fuel. I am retired and with
fixed income. This affects me in a big way. My wife and I
have a small vehicle for when driving is necessary within the
local area. Still with both vehicles, we are spending close
to $200 to $250 during a good month. These higher prices, in
our area, means we must cut on other items, such as dinner
out.
Arco currently is paying $4.19.9 for the lowest grade of
gasoline and $4.89.9 for diesel. The prices north of Mackay
are even higher; however, in Idaho Falls, unleaded regular is
still under $4 per gallon with diesel just under $4.30. We in
Arco cannot afford to travel to Idaho Falls or even Blackfoot
for the lower prices due to the mileage roundtrip.
In my opinion, this economy is very deep in recession and
very soon will be deep in a depression. The higher costs of
energy, food and other necessities are definitely making it
very difficult for us on fixed incomes to
[[Page 23627]]
survive well. I can remember a portion of the depression, and
if another occurs, the last one will be a ``cake walk''.
Guy, Arco.
____
Happy to see that you are starting to see the reality of
the things that I have been sending e-mails about over the
past year! I am glad that you are soliciting opinions from
your constituents. Here are my thoughts (again):
1. It is the housing bubble bursting that has precipitated
the collapse of the dollar. If you look at something stable
like gold or silver, you will see that it takes the same
amount of gold to buy a gallon of oil now as it has
throughout recent years. The dollar has lost tremendous value
due primarily from the Fed lowering interest rates and adding
liquidity to save (bail-out) banks and Wall Street.
2. There is no truth in bank balance sheets. They cook the
numbers constantly and no one seems to care that they
misrepresent earnings in order to sustain stock price and the
Dow. This in tern gets dumped onto ``we the people'' since it
creates a false sense of stability. Although this also is not
sustainable, it does provide these large institutions time to
try to manipulate the markets and make (steal) money from
unsuspecting investors. This has got to stop immediately.
Loosing 401K value by purchasing stock that is going to get
pounded when the truth of the sub-prime exposure eventually
gets reckoned. Let us stop this now. Let the banks take their
lumps and let the people have a chance to invest in properly
valued institutions.
3. Recent discovery of programs like ``Friends of Mozillo''
where housing committee leaders get preferred rates from
banks.
4. Environmental lobbies insisting that we do not go after
much needed oil. So, if the oil companies were to fund a few
lobbyists, could they really get their way and prevent us
from drilling? Should we allow this to continue? Should we
insist that it is essential to save our country and just get
the oil? I am told that the reserves in Alaska and Florida
alone hold enough oil that we would never need another drop
of Saudi oil? What are we waiting for?
5. Looking at the farming incentives for growing corn to
make ethanol is not financially sound. Spending more to farm
and wasting oil in the process makes no sense. Stop the
subsidies to farming corn. It really will not help and will
effect (negatively) the inflation we are already
experiencing. You say alternate energy. Let us get some tax
incentives for R and D here in Idaho. Attract business and
grow our economy by encouraging these types of businesses.
6. Initiatives to help grow American manufacturing. Giving
away all of our manufacturing jobs due to our short sighted
attitudes by American companies succeed will only lead to
higher unemployment, lower wages and declining property
values. Idaho for one should be doing everything they can to
encourage growth. Reducing tax obligations for corporations
and providing cash incentives for companies wanting to move
here would certainly help. If wages were substantially higher
then we could better afford the increases at the pump and
elsewhere.
7. Someone ask some tough questions of the Fed and its
polices. I mean reducing interest rates has only increased
the problem. Actually fixed 30-year rates have increased due
to lack of confidence. Restore confidence, get the rates of
short term debt back to sure up the dollar. It is sad that
the Fed is owned by the banks, allowing them to continue
unchallenged by Congress is ridiculous.
R.
____
I am a sole provider of a family of four. I have been
struggling to pay mortgage, insurance, food, electricity, and
clothing bills as well as paying the high cost of gasoline
for my vehicle to get to work. I feel as though I will need
to get an additional job to cover the expenses. I was
thinking about getting a loan to help with consolidating some
bills; however, that is only a bandage to my problem. The
problem is, that this year my employer only granted cost of
living increases at a 1.5%. That does not even help since the
true cost of living is far greater. I was grateful for the
increase; however, it does not help feed my family. I now
have to pay more than extra at the pump and now my vehicle
needs an oil change and that is more costs added on to my
transportation. I need the car for work in order to have
money to take care of my family. There has to be a better
solution to this problem.
Jan.
____
The point that must be stressed is that the economy of this
nation and, particularly in the West and more particularly in
wide open states like Idaho, is based on inexpensive personal
modes of transportation. We have no other options to get from
one place to another. (Neither horse and buggy nor any form
of mass transportation is available.) In my particular
situation, my wife and I are both retired and attempting to
live on a fixed retirement income. We both have health
conditions which require substantial travel to specialists
ranging from Idaho Falls on the north to Salt Lake City on
the south. (You must realize that Malad's medical facilities,
while greatly appreciated, are, relatively speaking. very
limited. We have only two general practitioners and for more
serious conditions are routinely referred to specialists in
the larger populated areas, again, typically ranging anywhere
from Idaho Falls to Salt Lake City.)
We have church commitments, requiring regular trips to Salt
Lake. Also, we have seven families scattered around southern
Idaho and northern Utah. We have had long continued
intercommunicative relationships with these families. Now,
with gas refills requiring anywhere from $50 to $100 and a
still limited budget, obviously, something has to give.
Windmills, solar panels and changing light bulbs will not cut
it. Quality of life has to fall, and, in the case of required
medical attention, can have serious consequences.
Additionally, we have two divorced daughters who have legal
requirements for child custody visits. In one case, the
intervening distance is over 300 miles; in the other case,
over 100. Transporting children over these distances
regularly and frequently, obviously, becomes extremely
onerous!
Also. I have a son, living in Pocatello, who has numerous
clients, and makes a substantial portion of his income, in
and around the Salt Lake-Provo area. Needless to say, with
$100 gas tanks, it becomes increasingly difficult to keep
these contacts economically viable, and has a serious impact
on his ability to earn an income.
And, of course, this does not even take into account
strictly pleasure trips to the mountains or to a lake for
relaxation. Or to one of the nearby cities for entertainment
opportunities not available in Malad. We basically become
prisoners in our own home! Again, our economy, our way of
life, is predicated on the ability to take advantage of
assets, attractions and opportunities not available in our
immediate locale, but readily available in the surrounding
areas. Our ability to make a living and contribute to the
economy, as well as enjoy what the economy has to offer us,
in economic, social, charitable and pleasure situations,
requires affordable transportation. We do not have that
ability now and that is solely the result of
shortsighted, faulty energy policy.
Finally, I truly resent the suggestion that this nation is
too rich and must be brought down to size. Choking off energy
will certainly bring us down, but unfortunately, not only
will it result in economically disastrous conditions here in
this country, but in the entire world also. I am still
looking for some responsible leadership out of Washington to
rectify this insane energy policy. I certainly hope you can
provide it.
J. Wesley.
____
This is a great idea! Thanks for the opportunity to share
my thoughts on energy with you.
I made some changes in my life three years ago that have
allowed me to reduce my gasoline costs substantially. I
started my own business and I now work from home thanks to
the wonder of the internet. I have been able to maintain my
(still somewhat minimal) salary but have eliminated an 80-
mile round-trip commute saving me hundreds of dollars a year
in fuel costs.
We are also planning on augmenting our propane heating
system with solar collectors. This will have a high upfront
cost, but we are doing it to reduce our carbon emissions.
Here is my energy wish list for Congress:
Give larger and more consistent economic incentives for
private and commercial solar and wind installation. Germany
did this with solar and it is a run-away success.
Please support solar thermal for commercial electric
production!! Idaho would be a great spot for solar thermal
farms. We could be a leader!
Improve the nation's high tension power grid so power can
be better distributed from new sources like solar thermal
farms.
Give incentives to car-makers to bring the price down on
electric plug-in cars. (See solar farms above for the power
source.)
Stop the coal-bed methane production in Wyoming and
Colorado. It is ruining the environment and endangering the
pronghorn, sage grouse, air quality and water supplies. It is
sad to watch this happening.
Please do not support nuclear energy. I lived through
Chernobyl in Europe in 1986. It was not fun. No one has
solved the nuclear waste problem and no one really wants the
stuff stored for centuries in their backyard.
More light rail systems in Idaho. I would use it if it was
available.
Thanks for listening--and for all your hard work in
Congress!
Linda, Driggs.
____
My daughter drives from Caldwell every day to her job as a
paralegal in Boise. She is divorced, and her husband pays
$100 per month child support. She has one minor child at home
and one child is 18 years old. The 18-year-old drives to
Boise to clean houses despite a continuing terrible case of
eczema. She married a young Marine in May. He is stationed in
Okinawa as a Private First Class. My daughter is on a very
limited budget and is having great difficulty continuing to
buy food for her children and pay for her gasoline to
continue working. I am
[[Page 23628]]
trying to help, but am widowed and on a limited income. My
husband was a World War II hero, whose honors included, among
over 50 medals, two Purple Hearts and the Legion of Merit. We
are trying to do our best to hang on but it gets harder every
day. I paid $50 to fill my gas tank yesterday at a discount
station. If the situation continues to decline, I do not know
how we will continue to be able to drive to work or the
grocery store. As of now, I am only driving when necessary,
and am limiting my spending in every way. Thank you for your
concern.
Sharon.
____________________
TRIBUTE TO LaPRELE AND JUDGE LLOYD GEORGE
Mr. ENSIGN. Mr. President, I rise today to honor a Nevada couple who
have spent their lives contributing to the community, committing to
their family, and serving as an example to us all.
Lloyd and LaPrele George have shared more than 50 years together.
During that half century, Lloyd served as a fighter pilot in the U.S.
Air Force, graduated from Brigham Young University, and earned his
juris doctorate from the University of California at Berkley. Since
1974 and an appointment to the Federal Bankruptcy Court, he has been
known fondly in Nevada as Judge George. He was appointed as a U.S.
district court judge in 1984, served 5 years as the chief U.S. district
judge, and assumed senior judge status in 1997.
I am reminded of Judge George every time I go to my southern Nevada
office, as the newest Federal building in Las Vegas proudly bears his
name. Judge George is a fixture in the Nevada legal community, but his
reputation extends beyond the walls of his courthouse and beyond the
borders of the United States. He has lectured on legal topics
nationally and internationally and often serves as an ambassador,
showing foreign dignitaries around the courthouse and introducing them
to southern Nevada.
While his name may be known by jurists around the world, his own
world has always revolved around his wife LaPrele, their 4 children,
and 13 grandchildren. In November, Opportunity Village, one of the most
respected local organizations in Las Vegas, will honor the George
Family with the ``Order of the Village.'' The Georges will be
recognized for their tireless advocacy on behalf of people with
intellectual disabilities.
Lloyd and LaPrele's oldest son Doug sparked their involvement in the
special needs community. At a time when it was expected that children
with intellectual disabilities would be sent to institutions, the
Georges instead embraced their son and became champions for those with
intellectual disabilities and an inspiration for their families. They
were involved in the early days of the Clark County Association of
Retarded Children, even cosigning the mortgage on the group's first
building. Over time, it evolved into Opportunity Village, Nevada's
largest private, not-for-profit community rehabilitation program.
Serving more than 3,000 people a year, Opportunity Village offers
Nevadans, like Doug George, a chance to earn a paycheck and feel a
sense of independence.
The Georges have shined the light of their service on southern Nevada
for many years. We have been blessed by their heartfelt involvement and
loving leadership. Judge George and LaPrele, thank you for your
commitment to your family and to our community. There is hope and
opportunity for many Nevadans because of you. May God continue to bless
you and your family.
____________________
ADDITIONAL STATEMENTS
______
TRIBUTE TO FALLEN WILDLAND FIREFIGHTERS
Mr. BAUCUS. Mr. President, I have a favorite quote about
firefighters: ``All men are created equal, then a few become firemen.''
Firefighters are indeed a rare breed--selfless and brave. It is a
tragedy when even one is lost. On September 1, Montana and America lost
not one but three firefighters in an airplane crash as they rushed to
quell the flames of a fire in California. Gene Wahlstrom, Greg
Gonsioroski, and Zachary VanderGriend may be gone from this Earth, but
they will never be forgotten. Their sacrifice and unwavering dedication
to the lives of others stand as an example for all Americans. These
brave men were based in Missoula, MT, and though they hailed from
Washington and Utah in addition to the Big Sky State, I am proud to
call them all Montanans.
Gene Wahlstrom began his 35-year flying career as a crop duster and
rose to the position of chief pilot for Neptune Aviation. Gene was a
Vietnam veteran and a natural leader and mentor. Folks who knew Gene
say he was a kind, genuine, accomplished, and loyal friend.
Most folks who knew Greg Gonsioroski just called him ``Gonzo.'' He
began his career as an airplane mechanic but decided to take to the
skies himself. Greg was a native of Baker, MT. A family man first,
father to Gabriel, Grady, and Gracelyn, and doting husband to Kim, he
will be remembered as a gentle giant and a loving and patient father,
husband, and friend.
Zachary VanderGriend was a new employee with Neptune Aviation but not
new to flying--he had dreamed of being a pilot since he was 2 years
old. Zachary got his pilot's license when he was 17 and spent much of
his time in volunteer programs such as the Young Eagles. As noted in
his eulogy, Zachary was a devoted Christian who loved to fly ``because
it was there he felt closest to God.''
I believe service is one of the most honorable things a person can
do. Whether it is service to ones community, State, or country, service
is the most noble of all human endeavors.
In Montana and indeed across much of the West, fires are an almost
constant threat. It is the price we pay for living in one of the most
beautiful places on earth. So every year we place our belongings, our
homes and our lives in the hands of firefighters--too often without a
second thought.
The loss of Gene, Greg, and Zachary gives us pause. As a Montanan and
an American, I feel tremendous sadness in their passing but also
tremendous gratitude for the time we were graced with their
presence.
____________________
REMEMBERING NATHAN WEXLER
Mr. BIDEN. Mr. President, the State of Delaware lost one of
its most remarkable citizens on September 10, with the passing of
Nathan Wexler at the age of 97.
I first met Nate many years ago during one of my early campaigns,
when he showed up in my campaign headquarters offering to volunteer.
From that day forward, though he had retired from his dry cleaning
business and was at an age when most folks are ready to slow down, Nate
was one of our most active volunteers.
A talented artist, Nate began a second career as a professional sign
painter. Indeed, one of the staples of our campaign's offices was a
large sign that he painted many years ago. I have had several
campaigns, and several campaign headquarters, but Nate's sign remains,
a reminder of his commitment as well as his friendship.
But for all of Nate's artistic talent, his most enduring
characteristic was his love of people, and his ability to inspire
loyalty and affection from everyone he came in contact with.
Many of the volunteers on my campaigns have been young people, full
of idealism and eager to learn. They have often been young enough to be
Nate's grandchildren or even great-grandchildren. But Nate always
relished their idealism. He tried to see people and events through
their eyes and learn from that point of view, and he gently shared his
experience and wisdom. It was remarkable to see the affection and
respect he engendered in those idealistic kids.
My family and I were privileged to spend time with Nate in settings
away from the political arena, and those occasions were simply a
delight. They were times rich with humor and wit, as well as wisdom.
Our conversations were filled with insight, not just into the past and
present, but looking far into
[[Page 23629]]
the future at the challenges our Nation and world will face. Nate knew
that he would never face those challenges, but that his great
grandchildren and great-great-grandchildren would.
Nate Wexler leaves behind a large family and friends of all ages and
from all walks of life. He will be missed tremendously, but he lives on
in all of us who were fortunate enough to know and to learn from
him.
____________________
HONORING CALIFORNIA'S LOST FIREFIGHTERS
Mrs. BOXER. Mr. President, I ask my colleagues to join me in
honoring the lives of Shawn Blazer, Scott Charlson, Edrik Gomez,
Matthew Hammer, Dan Packer, Andrew Jackson Palmer, Jim Ramage, Steven
Renno, Bryan Rich, Roark Schwanenberg, and David Steele. These brave
men lost their lives while working to protect Californians from
devastating forest fires.
On August 5, 2008, seven firefighters and two helicopter pilots were
tragically killed in a helicopter accident while bravely fighting the
Iron Complex Fire in Trinity County. I would like to say a few words
about each of these men.
Shawn Blazer of Medford, OR, had been working as a firefighter for 1
year and told his family and friends that he had ``discovered his
calling.'' Shawn was dedicated to his family and had been caring for
his mother when he died. He had a passion for photography, computer
games and playing sports. He is remembered for his dedication and love
for his friends and family.
Scott Charlson of Phoenix, OR, was a student at Southern Oregon
University and worked as a firefighter during the summer to put himself
through college. He had a passion for journalism, especially covering
sporting events. His classmates recalled his ethics, excellence in
reporting and kind and caring nature.
Edrik Gomez of Ashland, OR, was a student at Southern Oregon
University, double majoring in communications and political science and
was in his first year as a firefighter. Gomez was known as a leader
with great compassion and for his lighthearted spirit, interest in
politics and close bond with his family and friends.
Matthew Hammer of Grants Pass, OR, was a recent graduate from Corban
College with a degree in business. He married his college sweetheart
this summer and had planned on making 2008 his last fire season as a
firefighter. He is remembered as an athletic, friendly, fun-loving
person who excelled under pressure.
Jim Ramage of Redding, CA, was a helicopter pilot who served in the
U.S. Army during the Vietnam war and had a distinguished career with
the U.S. Forest Service and CAL Fire. Friends and family remember Jim's
passion for aviation and protecting public safety. He is remembered for
the bonds he created with his friends and the great love he had for his
family.
Steven ``Caleb'' Renno of Cave Junction, OR, was a track and field
coach for his alma mater, Illinois Valley High School, where he
excelled in both track and cross country. After high school he attended
Southern Oregon University and worked as a firefighter during summers.
He will be remembered for his talent as a runner and as an avid
traveler.
Bryan Rich of Central Point, OR, was a talented framing carpenter who
recently began a career in firefighting. He loved spending time
outdoors, playing sports and is remembered for his dedication to his
family.
Roark Schwanenberg of Lostine, OR, was a U.S. Army trained helicopter
pilot, who many of his colleagues consider one of the best helicopter
pilots, with whom they have worked. He is remembered for his humor,
great skill as a pilot, and love for his family and friends.
David Steele of Bend, OR, was a student at Central Oregon Community
College and worked as a firefighter during the summer to pay for his
education. He planned on becoming a career firefighter after graduating
from both Fire Fighting and Emergency Medical Technician schools.
Friends and family remember his strong work ethic, love of his family
and big heart.
We also mourn the loss of two other brave firefighters from the State
of Washington who lost their lives battling California wildfires this
summer.
Dan Packer of Sumner, WA, was the Chief of the East Piece Fire
Department and past president of the Washington State Fire Chiefs. He
had a passion for public safety and was known for his ability to relate
to anyone. Chief Packer is remembered for his strong leadership
abilities and dedication to his family. Chief Packer lost his life
while battling the Panther Fire in Siskiyou County on July 26, 2008.
Andrew Jackson Palmer of Port Townsend, WA, was a 2008 graduate of
Port Townsend High School where he was a standout athlete on the
football team. Andy enjoyed playing a variety of sports and spending
time with his friends and family. Andy's loved ones recall his kind
heart, honesty and integrity. Andy tragically died while fighting the
Iron Complex Fire in Trinity County on July 25, 2008.
These brave firefighters and pilots, like all those who fight fires
across California, put their lives on the line to protect our
communities. My heart goes out to their families and loved ones and my
thoughts and prayers are with them. We are forever indebted to them for
their courage, service and sacrifice.
____________________
TRIBUTE TO JO PRICE CRAVEN
Mr. BUNNING. Mr. President, I would like to recognize Ms. Jo
Price Craven, principal of Piner Elementary School in Morning City, KY.
Ms. Jo Price Craven was recently honored by the National Association of
Elementary School Principals as one of the recipients of the 2008
National Distinguished Principals Award.
The National Distinguished Principals Program was established in 1984
as an annual event to honor exemplary elementary school principals who
set the pace, character, and quality of the education children receive
during their early school years. One principal is chosen from each of
the 50 States and the District of Columbia, and this year Ms. Jo Price
Craven has been selected as a National Distinguished Principal from the
Commonwealth of Kentucky.
Throughout her time at Piner Elementary School, Principal Jo Price
Craven has displayed herself to be an example of excellence in primary
education. Her educational philosophy fosters a school environment that
is considerate and challenging to allow teachers at Piner Elementary to
mobilize and enhance student performance.
Kentuckians are extremely proud of Ms. Jo Price Craven. I am honored
to pay tribute to her, and I encourage my colleagues to join me in
wishing Principal Craven continued success as she continues her
exceptional work in education.
____________________
RECOGNIZING MS. KELSEY LANDT
Mr. BUNNING. Mr. President, today I recognize Ms. Kelsey Landt
of Paducah, KY, who is a premed senior at the University of Kentucky at
13 years old. Before her teenage years Kelsey participated in spinal
cord injury research at the University of Kentucky, and while at the
National Institute of Neurological Disorders and Stroke, she utilized
transcranial magnetic stimulation to understand reward processing. At
the age of 10, she presented her work at the 2005 Community College
Conference for Student Research in Madisonville, KY, and this year, she
participated in a summer internship program at the National Institutes
of Health in Maryland. At an age when many children look to hangout at
a local mall, Kelsey has already built a resume that mirrors those
students who were born more than a decade before her.
In addition to her academic activities, Kelsey is involved in
community life. She is presently the youngest account holder at the
Community Foundation of West Kentucky where she raises money for
medical and research based charitable organizations. She is a regular
at the local Salvation Army and makes time to volunteer at a local
children's hospital in Lexington, KY.
After earning a bachelor's degree in biology at the University of
Kentucky
[[Page 23630]]
next spring, Kelsey will begin her postbaccalaureate position at the
National Institutes of Health and then hopes to attend medical school.
Like most Kentuckians, I look forward to seeing all that she will
accomplish as she works toward her goal of becoming a medical
scientist.
____________________
CONGRATULATING WALKER INTERMEDIATE SCHOOL
Mr. BUNNING. Mr. President, I would like to take this
opportunity to congratulate Walker Intermediate School on being named a
President's Challenge State Champion by the President's Council on
Physical Fitness, PCPFS, for 2007-2008. Their accomplishment is an
example for all schools across the Commonwealth and our Nation.
Each year the PCPFS State Champion award is presented in all 50
states to 3 schools with the highest number of students scoring at or
above the 85th percentile on the President's Challenge Physical Fitness
Test. The test measures four components of physical fitness: a 1-mile
run-walk for heart and lung endurance; curl ups for abdominal strength
and endurance; a ``sit and reach'' stretch for muscular flexibility;
pullups for upper body strength and endurance; and a shuttle run for
agility. The inclusion of Walker Intermediate School in this group is a
credit to the dedication of its students, staff, and administration.
Walker Intermediate School is a role model to other institutions
through its dedication to helping students gain physical fitness skills
and to understanding the health benefits of regular physical activity.
In a time in which many young people are faced with weight related
problems, Walker Intermediate has proven to be a leader by encouraging
students and adults to engage in physical activity.
Walker Intermediate School is an inspiration to the citizens of
Kentucky and to student and community leaders everywhere. I look
forward to seeing all they will accomplish in the future.
____________________
CONGRATULATING WEST KNOX ELEMENTARY SCHOOL
Mr. BUNNING. Mr. President, I would like to take this
opportunity to congratulate West Knox Elementary School on being named
a President's Challenge State Champion by the President's Council on
Physical Fitness, PCPFS, for 2007-2008. Their accomplishment is an
example for all schools across the Commonwealth and our Nation.
Each year the PCPFS State Champion award is presented in all 50
States to 3 schools with the highest number of students scoring at or
above the 85th percentile on the President's Challenge Physical Fitness
Test. The test measures four components of physical fitness: a 1-mile
run-walk for heart and lung endurance; curl ups for abdominal strength
and endurance; a ``sit and reach'' stretch for muscular flexibility;
pullups for upper body strength and endurance; and a shuttle run for
agility. The inclusion of West Knox Elementary School in this group is
a credit to the dedication of its students, staff, and administration.
West Knox Elementary School is a role model to other institutions
through its dedication to helping students gain physical fitness skills
and to understanding the health benefits of regular physical activity.
In a time in which many young people are faced with weight related
problems, West Knox Elementary has proven to be a leader by encouraging
students and adults to engage in physical activity.
West Knox Elementary School is an inspiration to the citizens of
Kentucky and to student and community leaders everywhere. I look
forward to seeing all they will accomplish in the future.
____________________
BOISE AIR TRAFFIC CONTROL TOWER
Mr. CRAPO. Mr. President, as an Idahoan, I have many reasons
to be proud of the accomplishments of fellow Idahoans, and today, I
have yet another: in early September, the Federal Aviation
Administration notified the Boise Air Traffic Control Tower--BOI ATCT--
that it had been selected as National Facility of the Year for fiscal
year 2007. In a category that included 112 other facilities nationwide,
the BOI ATCT scored higher than the others on safety metrics, employee
focus, innovation and customer service. I congratulate Gordon Stewart,
BOI ATCT manager and his staff for their teamwork, positive, winning
attitudes and overall excellence. As Gordon noted recently, he and his
team are ``ever cognizant of the public trust bestowed upon our
profession, and with that knowledge we constantly strive to move the
bar of excellence higher. . . . The greatest tool at our disposal is
communication.'' This award comes on the heels of a regional award that
the BOI ATCT team won for fiscal year 2006.
I wish BOI ATCT continued success in its service and its highly
effective partnerships with the Boise Airport, Idaho Air and Army
National Guard, National Interagency Fire Center, passenger and cargo
airlines and corporate and general aviation. It is good to know that an
airport that I frequently use abides by such high standards of safety
and service.
____________________
ATLANTIC COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school board members in the Atlantic
Community School District, and to report on their participation in a
unique Federal partnership to repair and modernize school facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the State government in Iowa, which selects worthy school
districts to receive these grants for a range of renovation and repair
efforts--everything from updating fire safety systems to building new
schools or renovating existing facilities. In many cases, this Federal
funding is used to leverage public and/or private local funding, so it
often has a tremendous multiplier effect in a local school district.
The Atlantic Community School District received two Harkin fire
safety grants totaling $180,960 which it used for improvements to the
fire safety systems at the elementary and middle schools and to address
deficiencies on the fire safety report. The Federal grants have made it
possible for the district to provide quality and safe schools for their
students.
Excellent schools do not just pop up like mushrooms after a rain.
They are the product of vision, leadership, persistence, and a
tremendous amount of collaboration among local officials and concerned
citizens. I salute Superintendent Wendy Prigge, former Superintendent
Mark Schweer, the entire staff, administration, and governance in the
Atlantic Community School District. In particular, I would like to
recognize the leadership of the board of education--President Phil
Hascall, Vice President Jody Lorence, Kristy Pellett, Dennis Davis, Jon
Martens, and former members Jan Myers, Steve Jacobs, and Glen Smith. In
addition, district staff Barb Nelson, now deceased, Denise Bridges, Jan
Kerns, and Jerry Jensen should also be recognized for their work on the
grant application and implementation.
As we mark the 10th anniversary of the Harkin school grant program in
Iowa, I am obliged to point out that many thousands of school buildings
and facilities across the United States are in dire need of renovation
or replacement. In my State of Iowa alone, according to a recent study,
some 79 percent of public schools need to be upgraded or repaired. The
harsh reality is that the average age of school buildings in the United
States is nearly 50 years.
[[Page 23631]]
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends but during the week go to school in rundown
or antiquated facilities. This sends exactly the wrong message to our
young people about our priorities. We have to do better.
That is why I am deeply grateful to the professionals and parents in
the Atlantic Community School District. There is no question that a
quality public education for every child is a top priority in that
community. I salute them and wish them a very successful new school
year.
____________________
CAL COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school board members in the CAL Community
School District, and to report on their participation in a unique
Federal partnership to repair and modernize school facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the State government in Iowa, which selects worthy school
districts to receive these grants for a range of renovation and repair
efforts--everything from updating fire safety systems to building new
schools or renovating existing facilities. In many cases, this Federal
funding is used to leverage public and/or private local funding, so it
often has a tremendous multiplier effect in a local school district.
The CAL Community School District received a 1999 Harkin grant
totaling $205,000 which it used to help build an addition to the
elementary school and a 2004 Harkin grant totaling $162,250 to provide
space for pre-kindergarten programs, before and after school programs,
vocational agriculture programs and science. The district also received
fire safety grants totaling $99,978 to improve emergency lighting,
install fire alarms and make other safety improvements throughout the
district. The Federal grants have made it possible for the district to
provide quality and safe schools for their students.
Excellent schools do not just pop up like mushrooms after a rain.
They are the product of vision, leadership, persistence, and a
tremendous amount of collaboration among local officials and concerned
citizens. I salute the entire staff, administration, and governance in
the CAL Community School District. In particular, I would like to
recognize the leadership of the board of education--Mark Johansen, Beth
Eddy, Shawn Elphic, Steve Muhlenbruch and Therron Miller and former
board members Roy Plagge, Darwin Hill, Jacki Anderson, Craig Johnson
and Lee Schaefer. I would also like to recognize superintendent Steven
Lane and former superintendents Dr. James Jess, Charles Stalker and
Lyle Schwartz and the CAL Education Foundation.
As we mark the 10th anniversary of the Harkin school grant program in
Iowa, I am obliged to point out that many thousands of school buildings
and facilities across the United States are in dire need of renovation
or replacement. In my State of Iowa alone, according to a recent study,
some 79 percent of public schools need to be upgraded or repaired. The
harsh reality is that the average age of school buildings in the United
States is nearly 50 years.
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends but during the week go to school in rundown
or antiquated facilities. This sends exactly the wrong message to our
young people about our priorities. We have to do better.
That is why I am deeply grateful to the professionals and parents in
the CAL Community School District. There is no question that a quality
public education for every child is a top priority in that community. I
salute them and wish them a very successful new school year.
____________________
CENTRAL CITY COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school-board members in the Central City
Community School District, and to report on their participation in a
unique Federal partnership to repair and modernize school facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the State government in Iowa, which selects worthy school
districts to receive these grants for a range of renovation and repair
efforts--everything from updating fire safety systems to building new
schools or renovating existing facilities. In many cases, this Federal
funding is used to leverage public and/or private local funding, so it
often has a tremendous multiplier effect in a local school district.
The Central City Community School District received a 2004 Harkin
grant totaling $500,000 which it used to help build a new high school
building and expand curricular offerings and afterschool programs,
improve available technology, and improve accessibility for students
with disabilities. This school is a modern, state-of-the-art facility
that befits the educational ambitions and excellence of this school
district. Indeed, it is the kind of school facility that every child in
America deserves. The district also received a fire safety grant in
2002, totaling $30,000, which was used to install a new fire alarm
system and to make ventilation improvements in the multipurpose and
high school buildings.
Excellent schools do not just pop up like mushrooms after a rain.
They are the product of vision, leadership, persistence, and a
tremendous amount of collaboration among local officials and concerned
citizens. I salute the entire staff, administration, and governance in
the Central City Community School District. In particular, I would like
to recognize the leadership of the board of education--David Goodlove,
Neil Mattias, Crystal Murphy, Leanna Palmer and Eric Rauch and former
board members Kirk Hayes, Teresa Uhlenkamp and Sue Pillard. I would
also like to recognize superintendent John Dotson, former
superintendent Bill Mertens, high school principal David Glynn and
business manager Karla Hogan.
As we mark the 10th anniversary of the Harkin school grant program in
Iowa, I am obliged to point out that many thousands of school buildings
and facilities across the United States are in dire need of renovation
or replacement. In my State of Iowa alone, according to a recent study,
some 79 percent of public schools need to be upgraded or repaired. The
harsh reality is that the average age of school buildings in the United
States is nearly 50 years.
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends but during the week go to school in rundown
or antiquated facilities. This sends exactly the wrong message to our
young people about our priorities. We have to do better.
That is why I am deeply grateful to the professionals and parents in
the Central City Community School District. There is no question that a
quality public education for every child is a top priority in that
community. I salute them and wish them a very successful new school
year.
[[Page 23632]]
____________________
CLARION-GOLDFIELD COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school board members in the Clarion-
Goldfield Community School District, and to report on their
participation in a unique Federal partnership to repair and modernize
school facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the State government in Iowa, which selects worthy school
districts to receive these grants for a range of renovation and repair
efforts--everything from updating fire safety systems to building new
schools or renovating existing facilities. In many cases, this Federal
funding is used to leverage public and/or private local funding, so it
often has a tremendous multiplier effect in a local school district.
The Clarion-Goldfield Community School District received a 1999
Harkin grant totaling $192,946 which it used to help build an addition
to the middle school. The district also received three fire safety
grants totaling $75,000 for fire alarms, exit signs, fire rated doors
and other safety improvements throughout the district. The Federal
grants have made it possible for the district to provide quality and
safe schools for their students.
Excellent schools do not just pop up like mushrooms after a rain.
They are the product of vision, leadership, persistence, and a
tremendous amount of collaboration among local officials and concerned
citizens. I salute the entire staff, administration, and governance in
the Clarion-Goldfield Community School District. In particular, I would
like to recognize the leadership of the board of education--president
Clint Middleton, vice president Missy Schultz, Dr. Timothy Nagel, Dana
Langfitt, and Beth Jackson and former board members Bruce Frink, Sally
Woodley, Terry Lerdal and Denny McGrath. I would also like to recognize
superintendent Dr. Robert Olson, board secretary Fern Spellmeyer, head
custodian Duane Wempen, high school principal Dennis March, middle
school principal Steve Haberman and former elementary school principal
John Suhumskie.
As we mark the 10th anniversary of the Harkin school grant program in
Iowa, I am obliged to point out that many thousands of school buildings
and facilities across the United States are in dire need of renovation
or replacement. In my State of Iowa alone, according to a recent study,
some 79 percent of public schools need to be upgraded or repaired. The
harsh reality is that the average age of school buildings in the United
States is nearly 50 years.
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends but during the week go to school in rundown
or antiquated facilities. This sends exactly the wrong message to our
young people about our priorities. We have to do better.
That is why I am deeply grateful to the professionals and parents in
the Clarion-Goldfield Community School District. There is no question
that a quality public education for every child is a top priority in
that community. I salute them and wish them a very successful new
school year.
____________________
CORWITH-WESLEY COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school board members in the Corwith-
Wesley Community School District, and to report on their participation
in a unique Federal partnership to repair and modernize school
facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the State government in Iowa, which selects worthy school
districts to receive these grants for a range of renovation and repair
efforts--everything from updating fire safety systems to building new
schools or renovating existing facilities. The Federal grant has made
it possible for the district to provide quality and safe schools for
their students.
The Corwith-Wesley Community School District received several Harkin
fire safety grants totaling $125,000 which it used to make extensive
fire safety upgrades and repairs at the high school and other Corwith
and Wesley school facilities. The Federal grants have made it possible
for the district to provide quality and safe schools for their
students.
Excellent schools do not just pop up like mushrooms after a rain.
They are the product of vision, leadership, persistence, and a
tremendous amount of collaboration among local officials and concerned
citizens. I salute the entire staff, administration, and governance in
the Corwith-Wesley Community School District. In particular, I would
like to recognize the leadership of the board of education--president
Keith Hauswirth, Jonathan Chambers, Pete Wilhite, Tracy Studer, and
Susan Burrs, and former members, president Doug DeGroote, Craig Larson,
Judy Grandgenett, Dan Beenken, Gayle Trenary, and Leslie Ludwig. I
would also like to recognize superintendent Willie Stone, former
superintendents Don West, Dale Johnson, and Jim McDermott, and high
school secretary Allyson Thompson.
As we mark the 10th anniversary of the Harkin school grant program in
Iowa, I am obliged to point out that many thousands of school buildings
and facilities across the United States are in dire need of renovation
or replacement. In my State of Iowa alone, according to a recent study,
some 79 percent of public schools need to be upgraded or repaired. The
harsh reality is that the average age of school buildings in the United
States is nearly 50 years.
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends but during the week go to school in rundown
or antiquated facilities. This sends exactly the wrong message to our
young people about our priorities. We have to do better.
That is why I am deeply grateful to the professionals and parents in
the Corwith-Wesley Community School District. There is no question that
a quality public education for every child is a top priority in that
community. I salute them and wish them a very successful new school
year.
____________________
COUNCIL BLUFFS COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school board members in the Council
Bluffs Community School District, and to report on their participation
in a unique Federal partnership to repair and modernize school
facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the
[[Page 23633]]
State government in Iowa, which selects worthy school districts to
receive these grants for a range of renovation and repair efforts--
everything from updating fire safety systems to building new schools or
renovating existing facilities. In many cases, this Federal funding is
used to leverage public and/or private local funding, so it often has a
tremendous multiplier effect in a local school district.
The Council Bluffs Community School District received Harkin grants
totaling $2,914,250 which it used to help modernize and make safety
improvements throughout the district. The district received a 1999
construction grant for $750,000 to help replace windows and update HVAC
systems at Longfellow, Lewis and Clark and Pusey Elementary Schools, a
2002 grant for $1 million to help upgrade plumbing at Thomas Jefferson
High School and Edison, Roosevelt and Washington Schools and a 2003
grant for $500,000 to help upgrade the HVAC and electrical systems, at
Washington School and to help build a preschool restroom at Rue
Elementary School. The district also received three fire safety grants
totaling $675,000 to install sprinkler systems, fire alarm systems and
make other safety improvements at several schools in the district. The
Federal grants have made it possible for the district to provide
quality and safe schools for their students.
Excellent schools do not just pop up like mushrooms after a rain.
They are the product of vision, leadership, persistence, and a
tremendous amount of collaboration among local officials and concerned
citizens. I salute the entire staff, administration, and governance in
the Council Bluffs Community School District. In particular, I would
like to recognize the leadership of the board of education--President
Marvin Arnpriester, Vice President Mark McGee, David Coziahr, J.J.
Harvey, Janine Headen, Glen Mitchell, and Gina Malloy Primmer, and
former board members Billi Harrill, Melanie Bates, Bobbette Behrens,
Louie Carta, Francis Clark, Pam Collins, Randy Ewing, Marilyn Heider,
Rick Killion, Kenneth Petersen, Mark Peterson, Cathy Ryba, Rita
Sealock, David Strom, and Tim Wichman. I would also like to recognize
Superintendent Martha Bruckner, former Superintendent Richard Christie,
Longfellow principal, Peg Shea, Executive Director for Finance and
Support Services, Greg Rodgers, and Administrator Neal Evans.
As we mark the 10th anniversary of the Harkin school grant program in
Iowa, I am obliged to point out that many thousands of school buildings
and facilities across the United States are in dire need of renovation
or replacement. In my State of Iowa alone, according to a recent study,
some 79 percent of public schools need to be upgraded or repaired. The
harsh reality is that the average age of school buildings in the United
States is nearly 50 years.
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends, but during the week go to school in rundown
or antiquated facilities. This sends exactly the wrong message to our
young people about our priorities. We have to do better.
That is why I am deeply grateful to the professionals and parents in
the Council Bluffs Community School District. There is no question that
a quality public education for every child is a top priority in that
community. I salute them and wish them a very successful new school
year.
____________________
EDDYVILLE-BLAKESBURG COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school board members in the Eddyville-
Blakesburg Community School District, and to report on their
participation in a unique Federal partnership to repair and modernize
school facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the State government in Iowa, which selects worthy school
districts to receive these grants for a range of renovation and repair
efforts--everything from updating fire safety systems to building new
schools or renovating existing facilities. In many cases, this Federal
funding is used to leverage public and/or private local funding, so it
often has a tremendous multiplier effect in a local school district.
The Eddyville-Blakesburg Community School District received a 2000
Harkin grant totaling $133,750 which it used to help build a new
commons area at the elementary school. The district also received two
fire safety grants totaling $47,013 for electrical work, to install a
fire alarm system and make other repairs at the elementary school. The
Federal grants have made it possible for the district to provide
quality and safe schools for their students.
Excellent schools do not just pop up like mushrooms after a rain.
They are the product of vision, leadership, persistence, and a
tremendous amount of collaboration among local officials and concerned
citizens. I salute the entire staff, administration, and governance in
the Eddyville-Blakesburg Community School District. In particular, I
would like to recognize the leadership of the board of education--Kevin
Lane, Jeff Claypool, Dave Friedman, Dan Hulbert, Deb Bahr, Ed Glenn and
Gay Murphy and former board members Orbie Brittain, Maurice Gardner,
Greg Roberts, Lawrence Smith, Richard Lettington and Cindy Donohue. I
would also like to recognize superintendent Dr. Dean Cook and former
superintendent Dr. Allen Meyer.
As we mark the 10th anniversary of the Harkin school grant program in
Iowa, I am obliged to point out that many thousands of school buildings
and facilities across the United States are in dire need of renovation
or replacement. In my State of Iowa alone, according to a recent study,
some 79 percent of public schools need to be upgraded or repaired. The
harsh reality is that the average age of school buildings in the United
States is nearly 50 years.
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends but during the week go to school in rundown
or antiquated facilities. This sends exactly the wrong message to our
young people about our priorities. We have to do better.
That is why I am deeply grateful to the professionals and parents in
the Eddyville-Blakesburg Community School District. There is no
question that a quality public education for every child is a top
priority in that community. I salute them and wish them a very
successful new school year.
____________________
GREENE COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school board members in the Greene
Community School District, and to report on their participation in a
unique Federal partnership to repair and modernize school facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the State government in Iowa, which selects worthy school
districts to receive these grants for a range of renovation and repair
efforts--everything from updating fire safety systems to building
[[Page 23634]]
new schools or renovating existing facilities. In many cases, this
Federal funding is used to leverage public and/or private local
funding, so it often has a tremendous multiplier effect in a local
school district.
The Greene Community School District received a 2001 Harkin grant
totaling $266,699 which it used to help build an addition to the high
school. This school is a modern, state-of-the-art facility that befits
the educational ambitions and excellence of this school district.
Indeed, it is the kind of school facility that every child in America
deserves. The district also received three fire safety grants totaling
$75,000 to install new hoods in the kitchens at the elementary and high
schools, to install fire alarms and door closures and make other
repairs.
Excellent schools do not just pop up like mushrooms after a rain.
They are the product of vision, leadership, persistence, and a
tremendous amount of collaboration among local officials and concerned
citizens. I salute the entire staff, administration, and governance in
the Greene Community School District. In particular, I would like to
recognize the leadership of the board of education--Gary Hatcher, Laura
Schafer, Troy Feldman, Barbara Brinkman and John Moellers and former
board members Sara Trepp, Stanley Cousins, Robb Holtz, Jeff Lindell and
Warren Van Dyke. I would also like to recognize superintendent Steve
Ward and John Backer for his leadership of the citizens' committee
which supported the bond referendum for the project.
As we mark the 10th anniversary of the Harkin School Grant program in
Iowa, I am obliged to point out that many thousands of school buildings
and facilities across the United States are in dire need of renovation
or replacement. In my State of Iowa alone, according to a recent study,
some 79 percent of public schools need to be upgraded or repaired. The
harsh reality is that the average age of school buildings in the United
States is nearly 50 years.
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends but during the week go to school in rundown
or antiquated facilities. This sends exactly the wrong message to our
young people about our priorities. We have to do better.
That is why I am deeply grateful to the professionals and parents in
the Greene Community School District. There is no question that a
quality public education for every child is a top priority in that
community. I salute them and wish them a very successful new school
year.
____________________
KEOKUK COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school board members in the Keokuk
Community School District, and to report on their participation in a
unique Federal partnership to repair and modernize school facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the State government in Iowa, which selects worthy school
districts to receive these grants for a range of renovation and repair
efforts--everything from updating fire safety systems to building new
schools or renovating existing facilities. In many cases, this Federal
funding is used to leverage public and/or private local funding, so it
often has a tremendous multiplier effect in a local school district.
The Keokuk Community School District received a 1999 Harkin grant
totaling $750,000 which it used to help renovate Hawthorne Elementary
School and build a library addition for the Middle School. And in 2002,
the district began construction of an alternative school with a
$481,250 Harkin grant, as well as funds from a bond referendum and
proceeds from a local option sales tax. This facility opened in 2005
and provides an unique learning environment for 75-100 students each
day. In addition, nearly $455,000 in Harkin Fire Safety Grants have
been awarded to the Keokuk Community School District between 1999 and
2004 for the new alarm systems, new windows, and fire doors to assure
the safety of students, teachers and staff. These schools are modern,
state-of-the-art facility that befits the educational ambitions and
excellence of this school district. Indeed, it is the kind of school
facility that every child in America deserves.
Excellent schools do not just pop up like mushrooms after a rain.
They are the product of vision, leadership, persistence, and a
tremendous amount of collaboration among local officials and concerned
citizens. I salute the entire staff, administration, and governance in
the Keokuk Community School District. In particular, I would like to
recognize the leadership of the board of education.
As we mark the tenth anniversary of the Harkin school grant program
in Iowa, I am obliged to point out that many thousands of school
buildings and facilities across the United States are in dire need of
renovation or replacement. In my State of Iowa alone, according to a
recent study, some 79 percent of public schools need to be upgraded or
repaired. The harsh reality is that the average age of school buildings
in the United States is nearly 50 years.
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends but during the week go to school in rundown
or antiquated facilities. This sends exactly the wrong message to our
young people about our priorities. We have to do better.
That is why I am deeply grateful to the professionals and parents in
the Keokuk Community School District. There is no question that a
quality public education for every child is a top priority in that
community. I salute them and wish them a very successful new school
year.
____________________
MARTENSDALE-ST. MARYS COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school board members in the Martensdale-
St. Marys Community School District and to report on their
participation in a unique Federal partnership to repair and modernize
school facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the State government in Iowa, which selects worthy school
districts to receive these grants for a range of renovation and repair
efforts--everything from updating fire safety systems to building new
schools or renovating existing facilities. In many cases, this Federal
funding is used to leverage public and/or private local funding, so it
often has a tremendous multiplier effect in a local school district.
The Martensdale-St. Marys Community School District received a 2003
Harkin grant totaling $500,000 which it used to help build a classroom
addition and perform renovations in the existing school. The district
also received a $25,000 fire safety grant to upgrade lighting and
wiring in the area of the stage. The Federal grants have made it
possible for the district to provide quality and safe schools for their
students.
Excellent schools do not just pop up like mushrooms after a rain.
They are
[[Page 23635]]
the product of vision, leadership, persistence, and a tremendous amount
of collaboration among local officials and concerned citizens. I salute
the entire staff, administration, and governance in the Martensdale-St.
Marys Community School District. In particular, I would like to
recognize the leadership of the board of education--Velvet Van Hoose,
Scott Anderson, Cathy Seymour, Nicole Bunch, and John Della Vedova, and
former board members Merle Allen, Larry Henson, Pat Connor, Dean Gavin,
and Holly Estell. I would also like to recognize superintendent Jean
Peterson, former superintendent Peggy Huisman, business manager Jane
Cassady, and maintenance director Jim Lynch.
As we mark the 10th anniversary of the Harkin school grant program in
Iowa, I am obliged to point out that many thousands of school buildings
and facilities across the United States are in dire need of renovation
or replacement. In my State of Iowa alone, according to a recent study,
some 79 percent of public schools need to be upgraded or repaired. The
harsh reality is that the average age of school buildings in the United
States is nearly 50 years.
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends but during the week go to school in rundown
or antiquated facilities. This sends exactly the wrong message to our
young people about our priorities. We have to do better.
That is why I am deeply grateful to the professionals and parents in
the Martensdale-St. Marys Community School District. There is no
question that a quality public education for every child is a top
priority in that community. I salute them and wish them a very
successful new school year.
____________________
NEW LONDON COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school board members in the New London
Community School District, and to report on their participation in a
unique Federal partnership to repair and modernize school facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the State government in Iowa, which selects worthy school
districts to receive these grants for a range of renovation and repair
efforts--everything from updating fire safety systems to building new
schools or renovating existing facilities. The Federal grant has made
it possible for the district to provide quality and safe schools for
their students.
The New London Community School District received several Harkin fire
safety grants totaling $100,000 which it used to make extensive
upgrades to school facilities. The grants enabled the district to
upgrade electrical wiring, install emergency lighting and make other
safety repairs. The Federal grants have made it possible for the
district to provide quality and safe schools for their students.
Excellent schools do not just pop up like mushrooms after a rain.
They are the product of vision, leadership, persistence, and a
tremendous amount of collaboration among local officials and concerned
citizens. I salute the entire staff, administration, and governance in
the New London Community School District. In particular, I would like
to recognize the leadership of the board of education--president Laurie
Hempen, vice president Bob McPheron, Dennis Carter, Kelly Kadel, and
Joel Prottsman, and former members, Virginia Ekstrand, Sid Schmitt,
Rhonda Mixon, David Gates, and Gary Schweitzer. I would also like to
recognize superintendent Chuck Reighard, former superintendent Robert
Cardoni, and former board secretary Nancy Blow.
As we mark the 10th anniversary of the Harkin school grant program in
Iowa, I am obliged to point out that many thousands of school buildings
and facilities across the United States are in dire need of renovation
or replacement. In my State of Iowa alone, according to a recent study,
some 79 percent of public schools need to be upgraded or repaired. The
harsh reality is that the average age of school buildings in the United
States is nearly 50 years.
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends but during the week go to school in rundown
or antiquated facilities. This sends exactly the wrong message to our
young people about our priorities. We have to do better.
That is why I am deeply grateful to the professionals and parents in
the New London Community School District. There is no question that a
quality public education for every child is a top priority in that
community. I salute them and wish them a very successful new school
year.
____________________
OSKALOOSA COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school board members in the Oskaloosa
Community School District, and to report on their participation in a
unique Federal partnership to repair and modernize school facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the State government in Iowa, which selects worthy school
districts to receive these grants for a range of renovation and repair
efforts--everything from updating fire safety systems to building new
schools or renovating existing facilities. In many cases, this Federal
funding is used to leverage public and/or private local funding, so it
often has a tremendous multiplier effect in a local school district.
The Oskaloosa Community School District received a 2000 Harkin grant
totaling $500,000 which it used to help build an addition to and
remodel classrooms in the high school building. The addition doubled
the amount of classroom space available to students and greatly
improved their learning environment. This school is a modern, state-of-
the-art facility that befits the educational ambitions and excellence
of this school district. Indeed, it is the kind of school facility that
every child in America deserves. The district also received a 1999 fire
safety grant, totaling $62,000, which was used to purchase smoke
detectors and emergency lighting in several buildings.
Excellent schools do not just pop up like mushrooms after a rain.
They are the product of vision, leadership, persistence, and a
tremendous amount of collaboration among local officials and concerned
citizens. I salute the entire staff, administration, and governance in
the Oskaloosa Community School District. In particular, I would like to
recognize the leadership of the board of education--president David
Meinert, vice-president Don Patterson, Laurie Palmer, John Grahek, Anne
Whitis, Lin Yoder, and Jon Denniston, and former members Patrick Sodak,
Bruce Smith, David Dickinson, and Brian Keefer. I would also like to
recognize Superintendent Dr. Carolyn McGaughey, retired principal Mike
Christensen, and board secretary Chad Vink.
[[Page 23636]]
As we mark the 10th anniversary of the Harkin school grant program in
Iowa, I am obliged to point out that many thousands of school buildings
and facilities across the United States are in dire need of renovation
or replacement. In my State of Iowa alone, according to a recent study,
some 79 percent of public schools need to be upgraded or repaired. The
harsh reality is that the average age of school buildings in the United
States is nearly 50 years.
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends, but during the week go to school in rundown
or antiquated facilities. This sends exactly the wrong message to our
young people about our priorities. We have to do better.
That is why I am deeply grateful to the professionals and parents in
the Oskaloosa Community School District. There is no question that a
quality public education for every child is a top priority in that
community. I salute them and wish them a very successful new school
year.
____________________
POCAHONTAS AREA COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school board members in the Pocahontas
Area Community School District, and to report on their participation in
a unique Federal partnership to repair and modernize school facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the State government in Iowa, which selects worthy school
districts to receive these grants for a range of renovation and repair
efforts--everything from updating fire safety systems to building new
schools or renovating existing facilities. The Federal grant has made
it possible for the district to provide quality and safe schools for
their students.
The Pocahontas Area Community School District received several Harkin
fire safety grants totaling $100,000 which it used to make hardware,
electrical, and safety upgrades in several of their facilities. The
Federal grants have made it possible for the district to provide
quality and safe schools for their students.
Excellent schools do not just pop up like mushrooms after a rain.
They are the product of vision, leadership, persistence, and a
tremendous amount of collaboration among local officials and concerned
citizens. I salute the entire staff, administration, and governance in
the Pocahontas Area Community School District. In particular, I would
like to recognize the leadership of the board of education, Raymond
Seehusen, John Behrendsen, Daniel Duitscher, Greg Fritz, Richard
Garner, Darwin Eaton, and Jeff Kerns, and former members Jann Ricklefs,
Timothy Cook, Thomas Nedved, Jody Lyon, Roger Witt, William Thomas,
Stephen Baade, and Diane Harrison. I would also like to recognize
superintendent Joseph Kramer, former superintendents Michael Wright and
Dennis Pierce, and board secretary Diane Pattee.
As we mark the 10th anniversary of the Harkin school grant program in
Iowa, I am obliged to point out that many thousands of school buildings
and facilities across the United States are in dire need of renovation
or replacement. In my State of Iowa alone, according to a recent study,
some 79 percent of public schools need to be upgraded or repaired. The
harsh reality is that the average age of school buildings in the United
States is nearly 50 years.
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends, but during the week go to school in rundown
or antiquated facilities. This sends exactly the wrong message to our
young people about our priorities. We have to do better.
That is why I am deeply grateful to the professionals and parents in
the Pocahontas Area Community School District. There is no question
that a quality public education for every child is a top priority in
that community. I salute them and wish them a very successful new
school year.
____________________
RED OAK COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school board members in the Red Oak
Community School District, and to report on their participation in a
unique Federal partnership to repair and modernize school facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the State government in Iowa, which selects worthy school
districts to receive these grants for a range of renovation and repair
efforts--everything from updating fire safety systems to building new
schools or renovating existing facilities. In many cases, this Federal
funding is used to leverage public and/or private local funding, so it
often has a tremendous multiplier effect in a local school district.
The Red Oak Community School District received a 1998 Harkin grant
totaling $250,000 which it used to help build Inman Primary School.
This school is a modern, state-of-the-art facility that befits the
educational ambitions and excellence of this school district. Indeed,
it is the kind of school facility that every child in America deserves.
The district also received three fire safety grants totaling $147,822
to install fire doors, update emergency lighting and make other repairs
at schools throughout the district.
Excellent schools do not just pop up like mushrooms after a rain.
They are the product of vision, leadership, persistence, and a
tremendous amount of collaboration among local officials and concerned
citizens. I salute the entire staff, administration, and governance in
the Red Oak Community School District. In particular, I would like to
recognize the leadership of the board of education president--Charla
Schmid, vice president Lee Fellers, Amy Liddell, Rod DeVries, and
Elizabeth Dilley, and former board members Roger Carlson, Bryant Amos,
and Gale Haufle. I would also like to recognize superintendent Terry
Schmidt, former superintendents Dick Drey and Kurt Kaiser, Inman
principal Buck Laughlin, and former board secretary the late Sue
Wagaman.
As we mark the 10th anniversary of the Harkin school grant program in
Iowa, I am obliged to point out that many thousands of school buildings
and facilities across the United States are in dire need of renovation
or replacement. In my State of Iowa alone, according to a recent study,
some 79 percent of public schools need to be upgraded or repaired. The
harsh reality is that the average age of school buildings in the United
States is nearly 50 years.
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends but during the week go to school in rundown
or antiquated facilities. This sends exactly the wrong message to our
young people about our priorities. We have to do better.
That is why I am deeply grateful to the professionals and parents in
the Red Oak Community School District. There is no question that a
quality public education for every child is a
[[Page 23637]]
top priority in that community. I salute them and wish them a very
successful new school year.
____________________
SOUTH TAMA COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school-board members in the South Tama
Community School District, and to report on their participation in a
unique Federal partnership to repair and modernize school facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the State government in Iowa, which selects worthy school
districts to receive these grants for a range of renovation and repair
efforts--everything from updating fire safety systems to building new
schools or renovating existing facilities. In many cases, this Federal
funding is used to leverage public and/or private local funding, so it
often has a tremendous multiplier effect in a local school district.
The South Tama Community School District received a 2004 Harkin grant
totaling $500,000 which it used to help build a new elementary school.
This school is a modern, state-of-the-art facility that befits the
educational ambitions and excellence of this school district. Indeed,
it is the kind of school facility that every child in America deserves.
Excellent schools do not just pop up like mushrooms after a rain.
They are the product of vision, leadership, persistence, and a
tremendous amount of collaboration among local officials and concerned
citizens. I salute the entire staff, administration, and governance in
the South Tama Community School District. In particular, I would like
to recognize the leadership of the board of education--president
Michelle Yuska, vice president Ron Hala, Jackie Dvorak, Mark McFate and
Anne Michael and former board members G. Joe Lyon, Margaret Kubik, Alan
Upah and Donald Wacha. I would also like to recognize superintendent
Kerri Nelson, former superintendent Larry Molacek, business manager
Joanna Hofer, former business manager John Legg and director of
buildings and grounds Tim Downs.
As we mark the 10th anniversary of the Harkin school grant program in
Iowa, I am obliged to point out that many thousands of school buildings
and facilities across the United States are in dire need of renovation
or replacement. In my State of Iowa alone, according to a recent study,
some 79 percent of public schools need to be upgraded or repaired. The
harsh reality is that the average age of school buildings in the United
States is nearly 50 years.
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends but during the week go to school in rundown
or antiquated facilities. This sends exactly the wrong message to our
young people about our priorities. We have to do better.
That is why I am deeply grateful to the professionals and parents in
the South Tama Community School District. There is no question that a
quality public education for every child is a top priority in that
community. I salute them and wish them a very successful new school
year.
____________________
WATERLOO COMMUNITY EDUCATION
Mr. HARKIN. Mr. President, in Iowa and across the United
States, a new school year has begun. As you know, Iowa public schools
have an excellent reputation nationwide, and Iowa students' test scores
are among the highest in the Nation.
I would like to take just a few minutes today to salute the dedicated
teachers, administrators, and school board members in the Waterloo
Community School District and to report on their participation in a
unique Federal partnership to repair and modernize school facilities.
This fall marks the 10th year of the Iowa Demonstration Construction
Grant Program. That is its formal name, but it is better known among
educators in Iowa as the program of Harkin grants for Iowa public
schools. Since 1998, I have been fortunate to secure a total of $121
million for the State government in Iowa, which selects worthy school
districts to receive these grants for a range of renovation and repair
efforts--everything from updating fire safety systems to building new
schools or renovating existing facilities. In many cases, this Federal
funding is used to leverage public and/or private local funding, so it
often has a tremendous multiplier effect in a local school district.
The Waterloo Community School District received 15 Harkin grants
totaling $5,434,952 which it used to help modernize and make safety
improvements throughout the district. The Waterloo Community School
District received seven construction grants totaling $3,786,616 which
have helped the district build Walter Cunningham School of Excellence,
Irving Elementary School, Lincoln Elementary School, and Poyner
Elementary School. The grants have also helped with a classroom
addition and renovations at Lowell Elementary School and with
renovation projects at East High School, West High School and Kingsley
Elementary School. These schools are the modern, state-of-the-art
facilities that befit the educational ambitions and excellence of this
school district. Indeed, they are the kind of schools that every child
in America deserves.
The district also received eight fire safety grants totaling
$1,648,336 to install fire alarm systems and make other repairs at East
High School, Central Middle School, Hoover Middle School, Logan Middle
School, Bunger Middle School, McKinstry Elementary School, and Kingsley
Elementary School. The Federal grants have made it possible for the
district to provide quality and safe schools for their students.
Excellent schools do not just pop up like mushrooms after a rain.
They are the product of vision, leadership, persistence, and a
tremendous amount of collaboration among local officials and concerned
citizens. I salute the entire staff, administration, and governance in
the Waterloo Community School District. In particular, I would like to
recognize the leadership of the board of education--President Bernice
Richard, Vice President Barb Opheim, Pam Miller, Lyle Schmitt, Michael
Kindschi, Judy Fossell and Mike Young, and former board members Doug
Faas, Don Hanson, Craig Holdiman, Lance Dunn, Bob Heaton, Robert
Krause, Robert Smith, and Dave Juon. I would also like to recognize
superintendent Dr. Gary Norris, former superintendents Dr. Dewitt Jones
and Dr. Arlis Swartzendruber, director of buildings and grounds Marty
Metcalf, former director of buildings and grounds Jack Fitzgerald,
board secretary Sharon Miller, along with a number of building
principals including Mary Meier, Bob Tyson, Martin Van Roekel, Dr. Gail
Moon, Elizabeth Crowley, Vicky Smith, Dr. Mary Jo Wagner, Kari
Gunderson, Bob Wright, Dr. Loleta Montgomery, Brian Ortman, Phillip
Anderson, Jennifer Hartman, Marla Padget, and Pam Zeigler.
As we mark the 10th anniversary of the Harkin school grant program in
Iowa, I am obliged to point out that many thousands of school buildings
and facilities across the United States are in dire need of renovation
or replacement. In my State of Iowa alone, according to a recent study,
some 79 percent of public schools need to be upgraded or repaired. The
harsh reality is that the average age of school buildings in the United
States is nearly 50 years.
Too often, our children visit ultramodern shopping malls and gleaming
sports arenas on weekends but during
[[Page 23638]]
the week go to school in rundown or antiquated facilities. This sends
exactly the wrong message to our young people about our priorities. We
have to do better.
That is why I am deeply grateful to the professionals and parents in
the Waterloo Community School District. There is no question that a
quality public education for every child is a top priority in that
community. I salute them and wish them a very successful new school
year.
____________________
TRIBUTE TO VICE ADMIRAL CONRAD C. LAUTENBACHER, JR.
Mr. INOUYE. Mr. President, although many Americans may never
have heard of National Oceanic and Atmospheric Administration, or NOAA,
the agency plays a significant role in the daily lives of Americans,
whether it is providing daily weather forecasts, supporting marine
commerce, or monitoring our climate.
For nearly 7 years, NOAA has been guided by the leadership of VADM
Conrad C. Lautenbacher. When he retires on October 31, Admiral
Lautenbacher will leave a lasting legacy at NOAA that has helped
strengthen our knowledge and understanding of our oceans and
atmosphere.
Life on Earth relies on the ocean. Our oceans regulate our planet's
climate, support global commerce, and provide food. The livelihoods of
millions of Americans rely on our oceans. Yet, we know little about
what lies beneath the surface of our oceans. Ninety-five percent of our
oceans are unexplored. Working with the Senate Commerce Committee,
Admiral Lautenbacher commissioned America's first ship for ocean
exploration, the Okeanos Explorer. The ship's missions will include
reconnaissance to search unknown areas and map the deep seafloor.
Through telepresence, the ship and its discoveries will be connected to
live audiences so they can see what lies beneath the waters and help
inspire a new generation of ``aquanauts.''
Under Admiral Lautenbacher's leadership, the National Weather Service
has improved its severe weather warnings. Seconds make a difference
during flash floods, tornados, tsunami, and severe thunderstorms. With
improved scientific knowledge, NOAA is providing storm-based warnings
that give the public more geographically specific information about
severe weather. These storm-specific warnings allow first responders
and those in harm's way to take the necessary actions to protect lives
and property.
An important part of NOAA's mission is to understand and predict
changes in the Earth's environment. Admiral Lautenbacher has led U.S.
efforts working with more than 60 countries and the European Commission
to develop the Global Earth Observation System of Systems, GEOSS. Earth
observations are critical to our understanding of complex climate and
ocean systems. With improved data about the interconnectedness of Earth
systems, we will be better equipped to help emergency managers make
evacuation decisions, to aid State and local decisionmakers in
protecting coastal communities and improving infrastructure
development, and to more accurately predict weather and climate changes
that affect our economy.
Admiral Lautenbacher also worked closely with Senator Stevens and me
to reauthorize the Magnuson-Stevens Fishery Conservation and Management
Act. This act marks a natural evolution in fisheries management because
it recognizes not only the need to carefully manage fish populations,
but the ocean ecosystems our fisheries occupy.
Given the size of the U.S. Exclusive Economic Zone in the Pacific and
the reliance of Hawaii and the Pacific Islands on the oceans, NOAA's
programs are of critical importance to the Pacific. More than lending
technical assistance, Admiral Lautenbacher matched word to deed by
growing NOAA's capacity in the Pacific region--from establishing a new
National Marine Fisheries Service regional office and lab, to breaking
ground on a NOAA Pacific Regional Facility, to developing the data and
environmental monitoring infrastructure needed to support science-based
management.
Admiral Lautenbacher has my gratitude and deserves our Nation's
gratitude for his dedication to public service. I wish him well as he
moves into the next chapter of his life.
____________________
TRIBUTE TO BOB DeMERSSEMAN
Mr. JOHNSON. Mr. President, I rise today to recognize and
congratulate Bob DeMersseman of Rapid City, SD, for over 22 years of
service with the Rapid City Economic Development Partnership.
Mr. DeMersseman is retiring this December after an impressive career
of service with the Economic Development Partnership. For 19 of the 22
years, Bob served as president of the organization. During his tenure,
Bob and his staff and the city's economic development groups have
created and expanded two industrial parks, set up the low-interest
Rapid Fund loan fund, developed the Western Research Alliance to
promote a growing technology community and created the Black Hills
Business Development Center, an incubator to help researchers,
inventors and entrepreneurs turn their ideas into commercial ventures.
Bob has been instrumental in forging vital and important
relationships and partnerships with area Chambers of Commerce, economic
development organizations, universities and community officials. There
was a time when local communities didn't foster such working
relationships and with the guidance and advice of leaders like Bob,
this improved tremendously. Today, when one Black Hills community
attracts or expands a business, other communities realize that they
also benefit.
While developing partnerships and relationships between communities
and their leaders, Bob has also realized that economic development and
attracting businesses and industries to the local area has become
increasingly competitive. Bob along with other Rapid City and Black
Hills leaders have done a commendable job in creating and developing
more tools for the tool box to promote Rapid City and the Black Hills
to national and international prospects. He has helped to acquire and
expand land tracts for business and industrial parks, worked hard to
promote and market Rapid City and the Black Hills communities and
provided valuable guidance on issues impacting the future promotion and
growth of Rapid City and the Black Hills region. He has worked hard to
expand Rapid City's economic base.
Here is what a few of Bob's peers say about his impact on economic
development in the Rapid City area. ``In my opinion, Bob has been at
the front end of developing a very diversified economic development
program for Rapid City, and he will be remembered for putting a lot of
great things in place,'' said Mark Merchen, chairman of Black Hills
Vision, a group working to create a regional technology corridor.
``Bob has been such a key part of our team effort to create economic
development in Rapid City,'' said Pat Burchill, chairman of the Rapid
City Economic Development Foundation, the partnership's real estate
arm. ``Our success has a lot to do with Bob's efforts.''
I commend Bob for his passionate dedication and tireless work to
expand and enhance Rapid City's economic potential as well as helping
to develop and promote that same potential in the Black Hills region. I
wish him all the best in his retirement and know that he will bring a
high level of enthusiasm, energy, dedication and commitment to his
retirement endeavors.
____________________
REMEMBERING MICHAEL PROCTOR SMITH
Ms. LANDRIEU. Mr. President, today I wish to celebrate the
life of Michael Proctor Smith, who passed away at his home in New
Orleans on Friday, September 26, 2008. He was 71. Michael, a native of
New Orleans, was an award-winning professional freelance photographer
who chronicled the music, culture, and folklife of New Orleans and the
State of Louisiana for over 40 years.
[[Page 23639]]
Michael was well known for documenting New Orleans social club
parades and jazz funerals, neighborhood traditions, Mardi Gras Indians,
spiritual church ceremonies, and many of the city and State's renowned
jazz, blues, rhythm and blues, and gospel musicians. He was a fixture
at every New Orleans Jazz & Heritage Festival since it began in 1970
until his retirement in 2005. His works are internationally recognized
and are permanent collections at a number of museums including the
Bibliothque National in Paris, the Metropolitan Museum of Art, the
Smithsonian Institution, the Historic New Orleans Collection, the New
Orleans Museum of Art, the Ogden Museum of Southern Art, and the
Louisiana State Museum.
In the last few years, Michael had been honored with numerous awards
celebrating his work. He received a Lifetime Achievement Award from the
Louisiana Endowment for the Humanities in 2002 and was named Music
Photographer of the Year by Offbeat magazine. In 2004 he received a
Mayor's Arts Award from the Arts Council of New Orleans and a Clarence
John Laughlin Lifetime Achievement Award from the New Orleans/Gulf
South chapter of the American Society of Media Photographers. In 2005,
he received the Delgado Society award from the New Orleans Museum of
Art, the first photographer to be so honored. The recipient of two
Photographer's Fellowships from the National Endowment for the Arts,
Michael's prints have toured worldwide through the U.S. Information
Agency.
Michael's photographs grace the covers of many CDs and record albums,
illustrate numerous books and magazine articles published in America
and Europe, and are a staple of documentary films on the rich cultural
history of New Orleans and Louisiana.
He was also an original owner and founder of Tipitina's, an iconic
music club located at the corner of Napoleon Avenue and Tchoupitoulas
Street in uptown New Orleans.
Michael is survived by his partner Karen Louise Snyder; his brother
Joseph Byrd Hatchitt Smith; two daughters, Jan Lamberton Smith and
Leslie Blackshear Smith; and three grandchildren, Chance King Doyle,
Leslie Elizabeth Doyle, and Francis Brandon Arant.
____________________
TRIBUTE TO LOUISIANA WWII VETERANS
Ms. LANDRIEU. Mr. President, I am proud to honor a group of 88
World War II veterans from every region of Louisiana who are traveling
to Washington, DC, this weekend to visit the various memorials and
monuments that recognize the sacrifices of our Nation's invaluable
service members.
Louisiana HonorAir, a group based in Lafayette, LA, is sponsoring
this Saturday's trip to the Nation's Capital. The organization is
honoring each surviving World War II Louisiana veteran by giving them
an opportunity to see the memorials dedicated to their service. On this
trip, the veterans will visit the World War II, Korea, Vietnam and Iwo
Jima memorials. They will also travel to Arlington National Cemetery to
lay a wreath on the Tomb of the Unknowns.
This is the first of four flights Louisiana HonorAir will make to
Washington, DC, this fall.
World War II was one of America's greatest triumphs, but was also a
conflict rife with individual sacrifice and tragedy. More than 60
million people worldwide were killed, including 40 million civilians,
and more than 400,000 American service members were slain during the
long war. The ultimate victory over enemies in the Pacific and in
Europe is a testament to the valor of American soldiers, sailors,
airmen and marines. The years 1941 to 1945 also witnessed an
unprecedented mobilization of domestic industry, which supplied our
military on two distant fronts.
In Louisiana, there remain today more than 33,000 living WWII
veterans, and each one has a heroic tale of achieving the noble victory
of freedom over tyranny. The oldest in this HonorAir group was born in
1913. Two of these veterans began their service in the Louisiana
National Guard as early as 1936, and were activated for Federal service
in 1941.
This group served in every branch of the military, including 29 in
the U.S. Army, 14 in the U.S. Army Air Corps, 23 in the U.S. Navy, 8 in
the U.S. Marine Corps, 2 in the U.S. Merchant Marines, one in the U.S.
Coast Guard and one in the Women's Reserve of the U.S. Naval Reserve.
Our heroes served across the globe, participating in major invasions
such as the Battle of the Bulge, the Battle of Huertgen Forest, and the
battles of Tunisia, Naples-Foggia, Rome, Anzio, Po Valley and North
Apennines. They served in Europe, North Africa and the Pacific Theater.
One was wounded in Germany, and another was captured as a prisoner of
war.
Many of these veterans earned Purple Hearts, including one with three
Battle Stars. One of our veterans went on to serve in both Korea and
Vietnam, retiring in 1967.
I ask the Senate to join me in honoring these 88 veterans, all
Louisiana heroes, who we welcome to Washington this weekend and
Louisiana HonorAir for making these trips a reality.
____________________
TRIBUTE TO ROBERT ROTH
Ms. LANDRIEU. Mr. President, I wish to take a few moments to
acknowledge the life and work of a very ordinary, yet extraordinary,
American named Bob Roth of Bristow, VA. Bob died of cancer earlier this
year, at the young age of 44, leaving behind a wife of 19 years and
five young children. His was one of far too many vibrant young lives
cut short by this terrible disease. As was his way in life, Bob fought
cancer to the very end attacking the disease as ferociously as it
attacked him.
Recent developments in the FBI anthrax case had brought the case back
into the media in the last month. I want to pause and recognize that
the recent breaks in the case were built upon the hard work of Special
Agent Roth and his team. Many of us remember what it was like on
Capitol Hill in October of 2001 when an anthrax-laced letter appeared
in Senator Daschle's office and another in Senator Leahy's office.
Spores were found at the U.S. Supreme Court, and postal workers who
handled the letters died from inhalation. No one felt entirely safe
from one of the most deadly germs known to man.
The FBI was immediately on the case, and a September 2003 Washington
Post article explained their approach in the following manner:
To run the anthrax case day to day, Assistant FBI director
Van Harp turned to veteran FBI agent Bob Roth whose
meticulous style mirrored his own. Roth sometimes referred to
himself as a cops-and-robbers kind of guy, best suited to
pursuing the mobsters, embezzlers and kidnappers who had
always been the FBI's bread and butter. But this case posed
an entirely new set of challenges, and Roth was willing to
try almost anything to solve it . . . the FBI's
frustrations with the case were palpable. At one meeting at
the Washington field office, agents talked candidly about the
toll the long hours were exacting on their families. Roth
vented, too, groaning to no one in particular, ``Get me out
of this.''
But he never asked to get out. Long after the media lost interest,
Agent Roth worked tirelessly. As the FBI slogged through one of the
most complicated, high-profile cases it ever faced, Agent Bob Roth
served his country as a pioneer in the efforts to fight domestic
terrorism and weapons of mass destruction. He literally risked his life
investigating scenes and evidence from the anthrax case. He was later
honored by being promoted to Assistant Section Chief of the Bureau's
newly created Weapons of Mass Destruction Directorate. It was a role he
had little time to address because he spent the last year of his life
fighting against his own personal WMD: multiple myeloma, an aggressive
bone cancer.
Bob was an exemplary father, devoted husband, committed Christian,
community leader, and Government servant. He served 16 years for the
FBI and was highly commended and decorated for his exceptional life and
unfailing integrity, for his leadership and excellence in his
profession for his inspiring example as a devoted husband and loving
father to five beautiful children for his character and long service
[[Page 23640]]
to our country, and for his pioneering efforts in fighting against
weapons of mass destruction.
I ask that the Congressional Record reflect the impressive
contributions made by Special Agent Robert Roth to his country.
____________________
TRIBUTE TO MARY KEATING
Ms. LANDRIEU. Mr. President, today I celebrate the life of
Mary Keating, who, until she passed away last October, was a proud
resident of the city and great State of New York for nearly 78 years.
Mary first came to America at the young age of 17, far from her home
and her family in Derry, Kilshanny, County Clare, Ireland. Not long
after she arrived, she met and married Martin Keating, who also hailed
from County Clare. She and Martin shared many passions, most notably
their love for their family, their friends, and their deep, abiding
faith in God. While neither of them were musicians, they relished the
Irish country sets of their native Clare and carried them with them to
this country, eventually to meet and dance them on the Rockaway Beach
boardwalks, which as far as they were concerned was simply the last
parish in Clare. As one of her youngest grandchildren, Ronan, observed,
if you visited their home you would find a layer of dust on the top of
the knob on their radio because it had not been moved from its resting
spot on the Irish music station in decades.
Music was not the only way that Mary celebrated her Irish heritage.
It also could be found in her love to entertain friends and family. It
was well known in their neighborhood and beyond that there was always
an extra spot at the dinner table in the Keating home. As Mary would
say, ``what is one extra potato in the pot?'' One could never visit her
home without enjoying at least a cup of tea and an assortment of food.
Three generations of Keatings grew up savoring her specialties such
Irish soda bread, turnips, and leg of lamb. Much to their chagrin, her
daughters and granddaughters have never been able to make a soda bread
half as delicious as Mary's, simply because the ``recipe'' was all done
by taste and memory. As her granddaughter Kristin noted, the only one
of Mary's dishes her grandchildren will not miss is her ``lumpy''
mashed potatoes, especially since Martin was a firm believer in the
notion that children should finish everything they are served.
Mary will be remembered by all who knew her as a strong and caring
woman who lived a life guided by her faith and values. Long before
recycling became the politically correct thing to do, Mary Keating
saved and reused every bread bag, rubber band, piece of tinfoil, and
jar she ever brought into the house. Old jelly jars were magically
transformed into milk glasses and bread bags were used to store
everything from school lunch to sea shells from Rockaway Beach.
Even though Mary has left this world, her legacy will continue
through the lives and work of her 8 children, 20 grandchildren, and 24
great-grandchildren. I know this because her granddaughter, Kathleen
Keating Strottman, served as my staff for over 7 years and I saw many
of these traits in her. In honor of Mary's Irish heritage, I would like
to close my remarks with the refrain of an Irish ballad, ``The Lovely
Rose of Clare'':
Oh my lovely rose of Clare, you're the sweetest girl I
know, You're the queen of all the roses, the pretty flowers
that grow, You are the sunshine of my life, so beautiful and
fair, And I will always love you, my lovely rose of
Clare.
____________________
HONORING HUSSON COLLEGE
Ms. SNOWE. Mr. President, today I honor one of the jewels of
Maine higher education, Husson College, in Bangor, ME, which will
officially make its much-anticipated transition to Husson University on
October 11, 2008.
I know I join with countless Husson students and alumni from
practically every town in Maine, as well as from around the country and
the world, in expressing my deep-seated pride in what Husson College
has accomplished since its founding in 1898 by Chesley Husson, and for
what it will achieve in the years ahead as Husson University. Although
the name has changed, the longstanding hallmarks of Husson which have
served its students so exceptionally well for 110 years will not only
remain the same, but will also be strengthened more than ever. A
broader-based institution than it was just 20 years ago, Husson--at
this watershed moment of becoming a university--secures an even greater
presence on the educational landscape, offering multiple degrees
through various schools and bolstering its overall capacity to bring to
its students a wide range of dynamic and diverse programs, especially
at the graduate level.
From the dawn of the 20th century to the beginning of the 21st,
Husson has, at its core, strived to prepare its graduates for success
in life and in professional careers, by cultivating a learning
discipline, regimen, and environment tailored to each student that
ultimately facilitates individual growth and progress. Ushering Husson
College--now Husson University--into the 21st century is, fittingly,
its 21st president, Dr. Bill Beardsley, who, since 1987, has been
continually drawing from Husson's rich past, while simultaneously
focusing on what lies just over the horizon.
With Bill's unsurpassed vision, Husson is still--and will forever
be--an institution focused on teaching rather than research--a place
for imparting and acquiring knowledge that both fosters student
development and equips its graduates with the educational tools to be
valued civic and business leaders. Furthermore, because of Bill's
unparalleled reputation and ingenuity as an innovator, Husson has also
been at the forefront of developing a cutting-edge curriculum that
takes into account marketplace changes, demographic shifts, and
economic trends. So, it is little wonder that under Bill's vibrant and
effective leadership, Husson has more than tripled its matriculation of
freshman students, more than doubled its number of tradition-
al undergraduates--when considering those attending the New England
School of Communications--and has undergone a stunning expansion on its
campus to accommodate new schools and programs, not to mention more
alumni.
Nothing speaks more to Husson's tradition of commitment to the
student--and the primacy of a hands-on education that is accessible and
affordable--than a student-to-teacher ratio that is an exceptional 19
to 1, 70 faculty members dedicated only to teaching in the classroom,
and tuition costs that are purposely kept from skyrocketing, and where
nearly 90 percent of Husson students qualify to receive Federal, State,
community, or campus-based financial aid.
Additionally, as Husson espouses a teaching emphasis emblematic of a
college, it offers curriculum possibilities that integrate liberal arts
and sciences, professional and technical studies, and learning outside
the classroom that are indicative of its status as a university. Many
schools may offer degrees in business, but at Husson, that area of
study can be specialized to include not only financial management, but
also hospitality management, small/family business management, and
sports management--compelling and rigorous pathways of learning that
can be significantly attractive to highly-motivated, professionally-
centered students.
As Chair and now ranking member of the Senate Committee on Small
Business and Entrepreurship, I can tell you firsthand that this
approach to business education that creates greater personalization
yields benefits in an increasingly competitive marketplace for
employers and prospective employees alike. And those rewards extend
beyond the boundaries of business classes.
For example, how many schools nationwide have a chemistry major that
contains a prepharmacy track or paralegal studies or boatbuilding
technology program or graduate programs in nursing, physical therapy,
occupational therapy, and a graduate course of study in pharmacy being
developed? And how many institutions would have
[[Page 23641]]
responded to a medical shortage in underserved, rural areas that could
not afford a doctor with the vision of producing nurse practitioners?
But that is precisely what Husson did in 1981 when it partnered with
Eastern Maine Medical Center to establish the Husson College/Eastern
Maine Medical Center Baccalaureate School of Nursing.
Husson is continually assessing and examining ways to be of greater
value both to its students and the communities Husson serves. Husson's
desire to address real-world challenges by innovatively calibrating
fields of discipline is in part what makes Husson stand out--and
frankly unique--in the pantheon of small universities.
And just as Husson looks to meet its students more than halfway in
developing their academic, individualized pursuits, Husson also
endeavors to make receiving a Husson education more achievable for more
Maine students with its education centers in South Portland, Presque
Isle, and just recently, The Boat School in Eastport, ME, as well as
Unobskey College, located in Calais, ME.
And as much as Husson provides to its students, its graduates return
the favor with an allegiance and a desire to give back to their alma
mater that is awe inspiring. There is a story that Bill Beardsley
recounted recently in a Bangor Metro article about a young man, the
first of his family to attend college and a Husson student, who is able
to attend Husson because of a gift from his grandfather. But the young
man came to Bill because that money was running out and to explain his
situation. Dr. Beardsley knew he was a good student and a credit to the
Husson community.
Between the two of them, they were determined to find a solution.
Bill offered, among other items, a small loan. Together, they made it
work, which is truly the Husson way, treating every student personally
and as an individual, whether it is considering one's major to arriving
at a payment plan in order to spur their trajectories as students and
as human beings.
It is been a long time since Husson's days of preparing students for
careers in commerce, teaching and telegraphy, or since it purchased a
dairy farm that it converted beautifully into its present idyllic
campus. And bridging the span of those years are Paul Husson, Chesley
Husson's grandson, who still works at the university, and Husson
graduate and legend, Clara Swan, former Husson coach, athletic
director, professor, and Dean for whom the Swan Center is named.
They understand better than anyone that, while Husson may transition
from a college to a university, and even though new disciplines may
emerge, the Husson experience and outlook on education endures, from--
to paraphrase part of the Husson mission statement--its dedication to
excellence in teaching, its adherence to forging a personalized
collegiate experience with its students, its development of individual
self-worth, and a curriculum which promotes clear thinking and
communication skills.
The college that time and again was the defining force behind so many
students and graduates in the last century will now be the university
that will propel new generations into this age and beyond, and it will
do so with the same bedrock foundation that places the individual
education of each student first and the forward-looking focus that
enables Husson students and graduates to set and reach any goal. Husson
University understands, conveys, and puts into action what the English
poet, Robert Browning, once so eloquently expressed in words ``a man's
reach should exceed his grasp or what's a Heaven for?''
____________________
FISHMAN REALTY GROUP
Ms. SNOWE. Mr. President, today I recognize Fishman Realty
Group of Portland, a 12 person real estate firm providing vital
assistance to naval personnel transitioning from Brunswick Naval Air
Station in my home State of Maine as a result of the 2005 Base
Realignment and Closure round. In this effort, Fishman Realty Group
manages the Army Corps of Engineers' Homeowners' Assistance Program, a
crucial initiative that enables departing Navy personnel to sell their
homes to the Federal government. In turn, service members and their
families are able to purchase homes elsewhere without missing a step in
not only their service, but also their livelihood. Given the housing
crisis our country is currently facing, fostering a smooth transition
for our service members is an absolute necessity.
With the Brunswick Naval air Station slated for closure in 2011, the
prospect that our current precarious housing market would hinder naval
families from selling their homes is certainly unsettling. For
instance, service members reassigned to another base could potentially
face large losses on their homes--impeding the ability of these men and
women to purchase homes elsewhere and continue their duties.
That is why Fishman Realty Group has proven to be a beacon in
combating markets depressed by crumbling housing prices. Through the
Homeowners' Assistance Program, Fishman Realty Group is responsible for
maintaining and listing the properties that the government has acquired
from the departing personnel, preventing financial loss for their
families, and protecting an already depressed market from further
economic turmoil. As the sailors of Brunswick Naval Air Station depart,
they need not fear that their homes will become financial burdens.
The effort of Fishman Realty Group is a shining example of how small
businesses can make a tangible and tremendous difference during an
economic downturn. Founded by Alan Fishman in 1987, Fishman Realty
Group offers full service real estate brokering and property management
throughout the greater Portland area. Additionally, the firm couples
these offerings with local appraisers, lenders, and engineers; and
facilitates transactions within and around the Portland community. In
these challenging times for the housing market, it is a testament to
Fishman Realty Group's business integrity that it reaches out to help
military families, demonstrating that their business ethic is
fundamentally grounded in putting others first.
In 21 years of service to Portland communities, Fishman Realty Group
has transformed landscapes and expanded opportunities for hundreds of
businesses and families. I wish Fishman Realty Group and its employees
continued success, and I thank them for their commitment to the
community of Brunswick Naval Air Station.
____________________
UNITED RADIO BROADCASTERS
Mr. VITTER. Mr. President, today I wish to briefly discuss
some of the amazing efforts broadcasters have made and are currently
undertaking not due to government mandates or regulation, but rather as
stewards of the public airwaves and as proud members of their local
communities.
We all know how my home State and our gulf neighbors were ravaged by
the 2005 hurricane season. What many do not realize however is that our
local broadcasters performed heroically during this traumatic time.
Despite personal losses and risks to their own safety, broadcasters
worked feverishly to keep their signals on the air before, during, and
after these devastating storms. Their efforts in the wake of Hurricane
Katrina literally proved to be a life line to many victims who were
stranded by the storm.
Even when towers did go down during Katrina, the citizens of
Louisiana witnessed a rare phenomenon in today's world. Radio
broadcasters, who were competitors just the day before, banded together
combining resources and personnel to establish the United Radio
Broadcasters of New Orleans. By putting aside self interests, the
United Radio Broadcasters were able to keep the citizens of Louisiana
up to date with vital and even life saving information.
Today, we continue to see similar efforts benefiting communities
across the country. For example, in a recent edition of Radio Guide,
there is an inspiring article about steps one broadcaster is taking to
improve its connection to the local community in times
[[Page 23642]]
of need. Clear Channel has unveiled a series of emergency response
teams that can be deployed to areas hit by natural disasters.
Specifically, these teams operate as radio stations on wheels. Armed
with mobile towers, generators, satellite/Internet connectivity, and
other radio infrastructure needs, they have the ability to keep a
station on the air even if the station's permanent studio or tower is
knocked out of commission. Some of these emergency assets were
successfully deployed in Baton Rouge during Hurricane Gustav last
month. While it is my hope that these capabilities rarely, if ever,
have to be used, it is comforting to know they are at the ready.
This endeavor and similar investments being made by broadcasters
across the country represent a strong commitment to serving local
communities. While many here in Washington want to increase the level
of regulation placed upon local broadcasters, I would point out that
the examples I spoke of today were not dictated from some federal
agency. Rather, these efforts were voluntarily undertaken by the men
and women who are committed to serving the needs of their local
listeners.
____________________
MESSAGES FROM THE PRESIDENT
Messages from the President of the United States were communicated to
the Senate by Mrs. Neiman, one of his secretaries.
____________________
EXECUTIVE MESSAGES REFERRED
As in executive session the Presiding Officer laid before the Senate
messages from the President of the United States submitting sundry
nominations which were referred to the appropriate committees.
(The nominations received today are printed at the end of the Senate
proceedings.)
____________________
MESSAGE FROM THE HOUSE
______
ENROLLED BILL SIGNED
At 2:26 p.m., a message from the House of Representatives, delivered
by Mr. Zapata, one of its reading clerks, announced that the Speaker
pro tempore (Mr. Hoyer) has signed the following enrolled bill:
S. 3023. An act to amend title 38, United States Code, to
improve and enhance compensation and pension, housing, labor
and education, and insurance benefits for veterans, and for
other purposes.
The enrolled bill was subsequently signed by the President pro
tempore (Mr. Byrd).
____________________
EXECUTIVE AND OTHER COMMUNICATIONS
The following communications were laid before the Senate, together
with accompanying papers, reports, and documents, and were referred as
indicated:
EC-8154. A communication from the Principal Deputy, Office
of the Under Secretary of Defense (Personnel and Readiness),
transmitting the report of (3) officers authorized to wear
the insignia of the next higher grade in accordance with
title 10, United States Code, section 777; to the Committee
on Armed Services.
EC-8155. A communication from the Administrator,
Agricultural Marketing Service, Department of Agriculture,
transmitting, pursuant to law, the report of a rule entitled
``National Organic Program; Amendment to the National List of
Allowed and Prohibited Substances (Livestock)'' (RIN0581-
AC81) received on September 30, 2008; to the Committee on
Agriculture, Nutrition, and Forestry.
EC-8156. A communication from the Administrator,
Agricultural Marketing Service, Department of Agriculture,
transmitting, pursuant to law, the report of a rule entitled
``Apricots Grown in Designated Counties in Washington;
Increased Assessment Rate'' ((Docket No. AMS-FV-08-
0052)(FV08-922-1 FR)) received on September 30, 2008; to the
Committee on Agriculture, Nutrition, and Forestry.
EC-8157. A communication from the Administrator,
Agricultural Marketing Service, Department of Agriculture,
transmitting, pursuant to law, the report of a rule entitled
``Irish Potatoes Grown in Colorado; Reinstatement of the
Continuing Assessment Rate'' ((Docket No. AMS-FV-08-
0048)(FV08-948-2 FR)) received on September 30, 2008; to the
Committee on Agriculture, Nutrition, and Forestry.
EC-8158. A communication from the Administrator,
Agricultural Marketing Service, Department of Agriculture,
transmitting, pursuant to law, the report of a rule entitled
``Irish Potatoes Grown in Washington; Relaxation of Handling
and Import Regulations'' ((Docket No. AMS-FV-08-0036)(FV08-
946-1 IFR)) received on September 30, 2008; to the Committee
on Agriculture, Nutrition, and Forestry.
EC-8159. A communication from the Assistant Secretary for
Export Administration, Bureau of Industry and Security,
Department of Commerce, transmitting, pursuant to law, the
report of a rule entitled ``Encryption Simplification''
(RIN0694-AE18) received on September 30, 2008; to the
Committee on Banking, Housing, and Urban Affairs.
EC-8160. A communication from the Assistant Secretary for
Export Administration, Bureau of Industry and Security,
Department of Commerce, transmitting, pursuant to law, the
report of a rule entitled ``De Minimis U.S. Content in
Foreign Made Items'' (RIN0694-AC17) received on September 30,
2008; to the Committee on Banking, Housing, and Urban
Affairs.
EC-8161. A communication from the Associate Managing
Director--Performance Evaluation and Records Management,
Federal Communications Commission, transmitting, pursuant to
law, the report of a rule entitled ``Amendment of Section
90.20(e)(6) of the Commission's Rules'' ((FCC 08-186)(WT
Docket No. 06-142)) received on September 30, 2008; to the
Committee on Commerce, Science, and Transportation.
EC-8162. A communication from the Associate Managing
Director--Performance Evaluation and Records Management,
Federal Communications Commission, transmitting, pursuant to
law, the report of a rule entitled ``Amendment of Section
73.202(b), Table of Allotments, FM Broadcast Stations:
Beeville, Christine, George West, and Tilden, Texas'' ((DA
08-70)(MB Docket No. 07-78)) received on September 30, 2008;
to the Committee on Commerce, Science, and Transportation.
EC-8163. A communication from the Associate Managing
Director--Performance Evaluation and Records Management,
Federal Communications Commission, transmitting, pursuant to
law, the report of a rule entitled ``Amendment of Section
73.622(i), Final DTV Table of Allotments, Television
Broadcast Stations: Castle Rock, Colorado'' ((DA 08-2031)(MB
Docket No. 08-106)) received on September 30, 2008; to the
Committee on Commerce, Science, and Transportation.
EC-8164. A communication from the Associate Managing
Director--Performance Evaluation and Records Management,
Federal Communications Commission, transmitting, pursuant to
law, the report of a rule entitled ``Amendment of the
Commission's Rules Regarding Maritime Automatic
Identification Systems'' ((FCC 08-208)(WT Docket No. 04-344))
received on September 30, 2008; to the Committee on Commerce,
Science, and Transportation.
EC-8165. A communication from Director, Office of Surface
Mining, Department of the Interior, transmitting, pursuant to
law, the report of a rule entitled ``Wyoming Abandoned Mine
Land Reclamation Plan'' ((SATS No. WY-036-FOR)(Docket ID OSM-
2008-0008)) received on September 30, 2008; to the Committee
on Energy and Natural Resources.
EC-8166. A communication from the Administrator of the
Environmental Protection Agency, transmitting, pursuant to
law, the report of a rule entitled ``RCRA Hazardous Waste
Identification of Methamphetamine Production Process By-
products''; to the Committee on Environment and Public Works.
EC-8167. A communication from the Director, Office of
Congressional Affairs, Nuclear Regulatory Commission,
transmitting, pursuant to law, the report of a rule entitled
``Adjustment of Civil Penalties for Inflation'' (RIN3150-
AI45) received on September 26, 2008; to the Committee on
Environment and Public Works.
EC-8168. A communication from the Director, Regulatory
Management Division, Environmental Protection Agency,
transmitting, pursuant to law, the report of a rule entitled
``Approval and Promulgation of Air Quality Implementation
Plans; Ohio; Removal of Vehicle Inspection and Maintenance
Programs for Cincinnati and Dayton'' ((EPA-R05-OAR-2007-
1100)(FRL-8723-9)) received on September 30, 2008; to the
Committee on Environment and Public Works.
EC-8169. A communication from the Director, Regulatory
Management Division, Environmental Protection Agency,
transmitting, pursuant to law, the report of a rule entitled
``Approval and Promulgation of Air Quality Implementation
Plans; Revised Format for Materials Being Incorporated by
Reference for Maine'' ((ME-064-7013a)(FRL-8719-7)) received
on September 30, 2008; to the Committee on Environment and
Public Works.
EC-8170. A communication from the Director, Regulatory
Management Division, Environmental Protection Agency,
transmitting, pursuant to law, the report of a rule entitled
``Approval of Revised Municipal Waste Combustor State Plan
for Designated Facilities and Pollutants: Indiana'' ((EPA-
R05-OAR-2007-0952)(FRL-8722-8)) received on September 30,
2008; to the Committee on Environment and Public Works.
EC-8171. A communication from the Director, Regulatory
Management Division, Environmental Protection Agency,
transmitting,
[[Page 23643]]
pursuant to law, the report of a rule entitled ``Regulation
of Fuels and Fuel Additives: Modifications to Renewable Fuel
Standard Program Requirements'' ((RIN2060-AO80)(FRL-8723-3))
received on September 30, 2008; to the Committee on
Environment and Public Works.
EC-8172. A communication from the Director, Regulatory
Management Division, Environmental Protection Agency,
transmitting, pursuant to law, the report of a rule entitled
``Aspergillus flavus NRRL 21882; Exemption from the
Requirement of a Tolerance'' ((EPA-HQ-OPP-2008-0381)(FRL-
8383-9)) received on September 30, 2008; to the Committee on
Environment and Public Works.
EC-8173. A communication from the Chief of Trade and
Commercial Regulations Branch, Customs and Border Protection,
Department of Homeland Security, transmitting, pursuant to
law, the report of a rule entitled ``Haitian Hemispheric
Opportunity Through Partnership Encouragement Acts of 2006
and 2008'' (RIN1505-AB82) received on September 26, 2008; to
the Committee on Finance.
EC-8174. A communication from the Chief of Publications and
Regulations Branch, Internal Revenue Service, Department of
the Treasury, transmitting, pursuant to law, the report of a
rule entitled ``No-Rule Areas under Section 409A'' (Rev.
Proc. 2008-61) received on September 30, 2008; to the
Committee on Finance.
EC-8175. A communication from the Regulation Coordinator,
Centers for Medicare and Medicaid Services, Department of
Health and Human Services, transmitting, pursuant to law, the
report of a rule entitled ``Medicare Program; Hospital
Inpatient Prospective Payment Systems and Fiscal Year 2009
Rates: Final Fiscal Year 2009 Wage Indices and Payment Rates
Including Implementation of Section 124 of the Medicare
Improvement for Patients and Providers Act for 2008''
(RIN0938-AP15) received on September 30, 2008; to the
Committee on Finance.
EC-8176. A communication from the Regulation Coordinator,
Centers for Medicare and Medicaid Services, Department of
Health and Human Services, transmitting, pursuant to law, the
report of a rule entitled ``Medicaid Program; Self-Directed
Personal Assistance Services Program State Plan Option (Cash
and Counseling)'' (RIN0938-AO52) received on September 30,
2008; to the Committee on Finance.
EC-8177. A communication from the Chief of the Publications
and Regulations Branch, Internal Revenue Service, Department
of the Treasury, transmitting, pursuant to law, the report of
a rule entitled ``2008 National Pool'' (Rev. Proc. 2008-57)
received on October 1, 2008; to the Committee on Finance.
EC-8178. A communication from the Chief of the Publications
and Regulations Branch, Internal Revenue Service, Department
of the Treasury, transmitting, pursuant to law, the report of
a rule entitled ``Travel Per Diem Revenue Procedure'' (Rev.
Proc. 2008-59) received on October 1, 2008; to the Committee
on Finance.
EC-8179. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed agreement for the export of
defense articles or defense services sold commercially under
contract in the amount of $50,000,000 or more to Germany; to
the Committee on Foreign Relations.
EC-8180. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification regarding the proposed blanket transfer of
major defense equipment having an original acquisition value
of more than $14,000,000 to Norway, Greece, Portugal, Spain,
the Republic of Korea, Chile, Canada, New Zealand, Germany,
Australia, and Japan; to the Committee on Foreign Relations.
EC-8181. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed manufacturing license
agreement for the manufacture of significant military
equipment to Turkey; to the Committee on Foreign Relations.
EC-8182. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed technical assistance
agreement for the export of technical data, defense services,
and defense articles in the amount of $50,000,000 or more to
Mexico; to the Committee on Foreign Relations.
EC-8183. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed technical assistance
agreement for the export of defense services and defense
articles in the amount of $50,000,000 or more to Saudi
Arabia; to the Committee on Foreign Relations.
EC-8184. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification regarding the proposed transfer of major
defense equipment with an original acquisition value of more
than $14,000,000 to Germany; to the Committee on Foreign
Relations.
EC-8185. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed manufacturing license
agreement for the manufacture of significant military
equipment with the United Kingdom; to the Committee on
Foreign Relations.
EC-8186. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
a certification of a proposed manufacturing license agreement
for the manufacture of significant military equipment abroad
and the export of defense services and defense articles in
the amount of $50,000,000 or more to France; to the Committee
on Foreign Relations.
EC-8187. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed license for the export of
defense articles that are firearms controlled under Category
I of the United States Munitions List sold commercially under
contract in the amount of $1,000,000 or more to Iraq; to the
Committee on Foreign Relations.
EC-8188. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed manufacturing license
agreement to include the export of technical data, defense
services, and defense articles in the amount of $100,000,000
or more to Japan; to the Committee on Foreign Relations.
EC-8189. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed technical assistance
agreement for the export of technical data, defense services,
and defense articles in the amount of $50,000,000 or more to
South Korea; to the Committee on Foreign Relations.
EC-8190. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed technical assistance
agreement for the export of technical data, defense services,
and defense articles in the amount of $50,000,000 or more to
Algeria and France; to the Committee on Foreign Relations.
EC-8191. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed technical assistance
agreement for the export of technical data, defense services,
and defense articles in the amount of $100,000,000 or more to
the Netherlands, United Kingdom, Luxembourg, Belgium, Sweden,
Germany, France, and Spain; to the Committee on Foreign
Relations.
EC-8192. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed agreement for the export of
defense articles or defense services sold commercially under
contract in the amount of $50,000,000 or more to Japan; to
the Committee on Foreign Relations.
EC-8193. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed technical assistance
agreement for the export of technical data, defense services,
and defense articles in the amount of $100,000,000 or more to
the United Kingdom and Spain; to the Committee on Foreign
Relations.
EC-8194. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed manufacturing license
agreement to include the export of technical data, defense
services, and defense articles in the amount of $100,000,000
or more to the United Kingdom; to the Committee on Foreign
Relations.
EC-8195. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to law, a report entitled
``Report of U.S. Citizen Expropriation Claims and Certain
Other Commercial and Investment Disputes''; to the Committee
on Foreign Relations.
EC-8196. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to law, the report of a rule
entitled ``Amendment to the International Traffic in Arms
Regulations: Registration Fee Change'' (RIN1400-AC50)
received on September 26, 2008; to the Committee on Foreign
Relations.
EC-8197. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
[[Page 23644]]
the certification of an application for a license for the
export of defense articles or defense services to be sold
under a contract in the amount of $50,000,000 or more to
Singapore; to the Committee on Foreign Relations.
EC-8198. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed manufacturing license
agreement for the manufacture of significant military
equipment abroad and the export of defense services and
defense articles in the amount of $100,000,000 or more to
Japan; to the Committee on Foreign Relations.
EC-8199. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to law, the report of a rule
entitled ``Amendment to the International Arms Traffic in
Arms Regulations: Eritrea'' (22 CFR Part 126) received on
September 30, 2008; to the Committee on Foreign Relations.
EC-8200. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed technical assistance
agreement for the export of major defense articles to include
technical data, defense services, and defense articles in the
amount of $14,000,000 or more to the United Arab Emirates; to
the Committee on Foreign Relations.
EC-8201. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed technical assistance
agreement for the export of defense articles, including
technical data, and defense services in the amount of
$50,000,000 or more to Singapore; to the Committee on Foreign
Relations.
EC-8202. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed manufacturing license
agreement to include the export of technical data, defense
services, and defense articles in the amount of $100,000,000
or more to Greece; to the Committee on Foreign Relations.
EC-8203. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed retransfer of defense
articles or defense services in the amount of $50,000,000 or
more to Saudi Arabia; to the Committee on Foreign Relations.
EC-8204. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed agreement for the export of
defense articles or defense services sold commercially under
contract in the amount of $50,000,000 or more to the Republic
of Korea; to the Committee on Foreign Relations .
EC-8205. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed technical assistance
agreement to include the export of technical data, defense
services, and defense articles regarding major defense
equipment in the amount of $14,000,000 or more to Qatar; to
the Committee on Foreign Relations.
EC-8206. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed technical assistance
agreement to include the export of technical data, defense
services, and defense articles in the amount of $50,000,000
or more to Italy; to the Committee on Foreign Relations.
EC-8207. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to law, the report of a rule
entitled ``Visas: Documentation of Nonimmigrants Under the
Immigration and Nationality Act, As Amended'' (22 CFR Part
41) received on September 30, 2008; to the Committee on
Foreign Relations.
EC-8208. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed technical assistance
agreement for the export of technical data, defense services,
and defense articles in the amount of $50,000,000 or more to
Italy; to the Committee on Foreign Relations.
EC-8209. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed manufacturing license
agreement for the manufacture of significant military
equipment abroad with Japan; to the Committee on Foreign
Relations.
EC-8210. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification regarding the proposed transfer of major
defense equipment with an original acquisition value of more
than $14,000,000 to Turkey; to the Committee on Foreign
Relations.
EC-8211. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed technical assistance
agreement for the export of defense articles, including
technical data, and defense services in the amount of
$50,000,000 or more to Mexico; to the Committee on Foreign
Relations .
EC-8212. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed technical assistance
agreement for the export of technical data, defense services,
and defense articles in the amount of $50,000,000 or more to
Sweden; to the Committee on Foreign Relations.
EC-8213. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to the Arms Export Control Act,
the certification of a proposed technical assistance
agreement to include the export of technical data, defense
services, and defense articles in the amount of $50,000,000
or more to South Korea, United Kingdom, and France; to the
Committee on Foreign Relations.
EC-8214. A communication from the Acting Assistant
Secretary, Office of Legislative Affairs, Department of
State, transmitting, pursuant to law, the report of a rule
entitled ``Amendment to the International Traffic in Arms
Regulations: Registration Fee Change'' (RIN1400-AC50)
received on September 30, 2008; to the Committee on Foreign
Relations.
EC-8215. A communication from the General Counsel, Office
of Management and Budget, Executive Office of the President,
transmitting, pursuant to law, the report of a vacancy and
designation of an acting officer for the position of
Administrator, Office of Federal Procurement Policy, received
on September 30, 2008; to the Committee on Homeland Security
and Governmental Affairs.
EC-8216. A communication from the Director of the Office of
Standards, Regulations, and Variances, Mine Safety and Health
Administration, Department of Labor, transmitting, pursuant
to law, the report of a rule entitled ``Mine Rescue Team
Equipment'' (RIN1219-AB56) received September 30, 2008; to
the Committee on Health, Education, Labor, and Pensions.
EC-8217. A communication from the Director of the Office of
Standards, Regulations, and Variances, Mine Safety and Health
Administration, Department of Labor, transmitting, pursuant
to law, the report of a rule entitled ``Fire Extinguishers in
Underground Coal Mines'' (RIN1219-AB40) received October 1,
2008; to the Committee on Health, Education, Labor, and
Pensions.
____________________
REPORTS OF COMMITTEES
The following reports of committees were submitted:
By Mr. INOUYE, from the Committee on Commerce, Science, and
Transportation, with amendments:
H.R. 1187. To expand the boundaries of the Gulf of the
Farallones National Marine Sanctuary and the Cordell Bank
National Marine Sanctuary, and for other purposes (Rept. No.
110-516).
By Mr. LIEBERMAN, from the Committee on Homeland Security
and Governmental Affairs, with an amendment in the nature of
a substitute:
S. 2148. A bill to provide for greater diversity within,
and to improve policy direction and oversight of, the Senior
Executive Service (Rept. No. 110-517).
By Mr. LEAHY, from the Committee on the Judiciary, without
amendment:
S. 2838. A bill to amend chapter 1 of title 9 of United
States Code with respect to arbitration (Rept. No. 110-518).
By Mr. DORGAN, from the Committee on Indian Affairs, with
an amendment in the nature of a substitute:
S. 1779. A bill to establish a program for tribal colleges
and universities within the Department of Health and Human
Services and to amend the Native American Programs Act of
1974 to authorize the provision of grants and cooperative
agreements to tribal colleges and universities, and for other
purposes (Rept. No. 110-519).
By Mr. LIEBERMAN, from the Committee on Homeland Security
and Governmental Affairs, with an amendment in the nature of
a substitute:
H.R. 404. A bill to require the establishment of customer
service standards for Federal agencies.
By Mr. LIEBERMAN, from the Committee on Homeland Security
and Governmental Affairs, without amendment:
S. 547. A bill to establish a Deputy Secretary of Homeland
Security for Management, and for other purposes.
By Mr. LIEBERMAN, from the Committee on Homeland Security
and Governmental Affairs, with amendments:
[[Page 23645]]
S. 967. A bill to amend chapter 41 of title 5, United
States Code, to provide for the establishment and
authorization of funding for certain training programs for
supervisors of Federal employees.
By Mr. LIEBERMAN, from the Committee on Homeland Security
and Governmental Affairs, with an amendment in the nature of
a substitute:
S. 1000. A bill to enhance the Federal Telework Program.
S. 1924. A bill to amend chapter 81 of title 5, United
States Code, to create a presumption that a disability or
death of a Federal employee in fire protection activities
caused by any of certain diseases is the result of the
performance of such employee's duty.
S. 2583. A bill to amend the Improper Payments Information
Act of 2002 (31 U.S.C. 3321 note) in order to prevent the
loss of billions in taxpayer dollars.
S. 3384. A bill to amend section 11317 of title 40, United
States Code, to require greater accountability for cost
overruns on Federal IT investment projects.
By Mr. LIEBERMAN, from the Committee on Homeland Security
and Governmental Affairs, without amendment:
S. 3474. A bill to amend title 44, United States Code, to
enhance information security of the Federal Government, and
for other purposes.
S. 3662. An original bill to establish the Controlled
Unclassified Information Office, to require policies and
procedures for the designation, marking, safeguarding, and
dissemination of controlled unclassified information, and for
other purposes.
____________________
INTRODUCTION OF BILLS AND JOINT RESOLUTIONS
The following bills and joint resolutions were introduced, read the
first and second times by unanimous consent, and referred as indicated:
By Mr. SCHUMER:
S. 3659. A bill to amend the Internal Revenue Code of 1986
to provide for the disclosure of schedule M-3 to the
Securities and Exchange Commission, to provide for the public
disclosure of certain information on such schedule, to
provide penalties for failure to file such schedule or
inaccurately reporting information on such schedule, and for
other purposes; to the Committee on Finance.
By Ms. KLOBUCHAR (for herself and Mr. Nelson of
Florida):
S. 3660. A bill to amend the Consumer Product Safety Act to
require residential carbon monoxide detectors to meet the
applicable ANSI/UL standard by treating that standard as a
consumer product safety rule, to encourage States to require
the installation of such detectors in homes, and for other
purposes; to the Committee on Commerce, Science, and
Transportation.
By Mr. VOINOVICH (for himself, Mr. Domenici, Ms.
Murkowski, Mrs. Dole, and Mr. Alexander):
S. 3661. A bill to amend the Atomic Energy Act of 1954 to
establish a United States Nuclear Fuel Management
Corporation, and for other purposes; to the Committee on
Environment and Public Works.
By Mr. LIEBERMAN:
S. 3662. An original bill to establish the Controlled
Unclassified Information Office, to require policies and
procedures for the designation , marking, safeguarding, and
dissemination of controlled unclassified information, and for
other purposes; from the Committee on Homeland Security and
Governmental Affairs; placed on the calendar.
By Mr. ROCKEFELLER:
S. 3663. A bill to require the Federal Communications
Commission to provide for a short-term extension of the
analog television broadcasting authority so that essential
public safety announcements and digital television transition
information may be provided for a short time during the
transition to digital television broadcasting; to the
Committee on Commerce, Science, and Transportation.
By Mr. ROCKEFELLER:
S. 3664. A bill to provide for the extension of a certain
hydroelectric project located in the State of West Virginia;
to the Committee on Energy and Natural Resources.
By Mr. AKAKA (for himself and Mr. Pryor):
S. 3665. A bill to amend chapter 63 of title 5, United
States Code, to modify the rate of accrual of annual leave
for administrative law judges, contract appeals board
members, and immigration judges; to the Committee on Homeland
Security and Governmental Affairs.
By Ms. KLOBUCHAR (for herself and Mr. Hatch):
S. 3666. A bill to require certain metal recyclers to keep
records of their transactions in order to deter individuals
and enterprises engaged in theft and interstate fencing of
stolen copper, and for other purposes; to the Committee on
Commerce, Science, and Transportation.
By Mr. LAUTENBERG (for himself and Mr. Vitter):
S. 3667. A bill to clarify the application of section
14501(d) of title 49, United States Code, to prevent the
imposition of unreasonable transportation terminal fees; to
the Committee on Commerce, Science, and Transportation.
By Mr. BIDEN:
S. 3668. A bill to create a grant program for collaboration
programs that ensure coordination among criminal justice
agencies, adult protective services agencies, victim
assistance programs, and other agencies or organizations
providing services to individuals with disabilities in the
investigation and response to abuse of or crimes committed
against such individuals; to the Committee on the Judiciary.
By Mr. VOINOVICH:
S. 3669. A bill to reduce gas prices by promoting domestic
energy production, alternative energy, and conservation, and
for other purposes; to the Committee on Energy and Natural
Resources.
By Mr. BUNNING:
S. 3670. A bill to regulate certain State and local
taxation of electronic commerce, and for other purposes; to
the Committee on Commerce, Science, and Transportation.
By Mrs. FEINSTEIN:
S. 3671. A bill to amend the Commodity Exchange Act to
require the Commodity Futures Trading Commission to develop
and impose aggregate position limits on certain large over-
the-counter transactions and classes of large over-the-
counter transactions; to the Committee on Agriculture,
Nutrition, and Forestry.
By Mr. BAUCUS:
S. 3672. A bill to amend title 23, United States Code, to
improve economic opportunity and development in rural States
through highway investment, and for other purposes; to the
Committee on Environment and Public Works.
By Mr. BAUCUS:
S. 3673. A bill to amend title 23, United States Code, to
improve highway transportation in the Untied States,
including rural and metropolitan areas; to the Committee on
Environment and Public Works.
By Mrs. CLINTON:
S. 3674. A bill to amend the Public Health Service Act to
establish a Wellness Trust; to the Committee on Health,
Education, Labor, and Pensions.
By Mr. KERRY:
S. 3675. A bill to amend the Internal Revenue Code of 1986
to provide for the treatment of certain excessive employee
remuneration, and for other purposes; to the Committee on
Finance.
By Mr. SANDERS:
S. 3676. A bill to support the recruitment and retention of
volunteer firefighters and emergency medical services
personnel, and for other purposes; to the Committee on
Homeland Security and Governmental Affairs.
By Ms. SNOWE (for herself and Mrs. Feinstein):
S. 3677. A bill to establish a Special Joint Task Force on
Financial Crimes; to the Committee on the Judiciary.
By Mrs. BOXER:
S. 3678. A bill to promote freedom, human rights, and the
rule of law in Vietnam; to the Committee on Foreign
Relations.
____________________
SUBMISSION OF CONCURRENT AND SENATE RESOLUTIONS
The following concurrent resolutions and Senate resolutions were
read, and referred (or acted upon), as indicated:
By Ms. LANDRIEU:
S. Res. 701. A resolution honoring the life of Michael P.
Smith; to the Committee on the Judiciary.
By Mr. NELSON of Florida:
S. Con. Res. 105. A concurrent resolution directing the
Clerk of the House of Representatives to correct the
enrollment of H.R. 6063; considered and agreed to.
____________________
ADDITIONAL COSPONSORS
S. 602
At the request of Mr. Pryor, the name of the Senator from Florida
(Mr. Nelson) was added as a cosponsor of S. 602, a bill to develop the
next generation of parental control technology.
S. 714
At the request of Mr. Akaka, the name of the Senator from Illinois
(Mr. Obama) was added as a cosponsor of S. 714, a bill to amend the
Animal Welfare Act to ensure that all dogs and cats used by research
facilities are obtained legally.
S. 766
At the request of Mrs. Clinton, the name of the Senator from Oregon
(Mr. Wyden) was added as a cosponsor of S. 766, a bill to amend the
Fair Labor Standards Act of 1938 to provide more effective remedies of
victims of discrimination in the payment of wages on the basis of sex,
and for other purposes.
S. 826
At the request of Mr. Menendez, the names of the Senator from New
Mexico (Mr. Bingaman), the Senator from Minnesota (Ms. Klobuchar), the
Senator
[[Page 23646]]
from Missouri (Mrs. McCaskill) and the Senator from Arkansas (Mrs.
Lincoln) were added as cosponsors of S. 826, a bill to posthumously
award a Congressional gold medal to Alice Paul, in recognition of her
role in the women's suffrage movement and in advancing equal rights for
women.
S. 1376
At the request of Mr. Leahy, his name was added as a cosponsor of S.
1376, a bill to amend the Public Health Service Act to revise and
expand the drug discount program under section 340B of such Act to
improve the provision of discounts on drug purchases for certain safety
net provides.
S. 1588
At the request of Ms. Landrieu, the name of the Senator from Montana
(Mr. Tester) was added as a cosponsor of S. 1588, a bill to amend the
Public Health Service Act, the Employee Retirement Income Security Act
of 1974, and the Internal Revenue Code of 1986 to require that group
and individual health insurance coverage and group health plans provide
coverage for treatment of a minor child's congenital or developmental
deformity or disorder due to trauma, infection, tumor, or disease.
S. 2020
At the request of Mr. Lugar, the name of the Senator from Maine (Ms.
Snowe) was added as a cosponsor of S. 2020, a bill to reauthorize the
Tropical Forest Conservation Act of 1998 through fiscal year 2010, to
rename the Tropical Forest Conservation Act of 1998 as the ``Tropical
Forest and Coral Conservation Act of 2007'', and for other purposes.
S. 2510
At the request of Mr. Isakson, the name of the Senator from Texas
(Mr. Cornyn) was added as a cosponsor of S. 2510, a bill to amend the
Public Health Service Act to provide revised standards for quality
assurance in screening and evaluation of gynecologic cytology
preparations, and for other purposes.
S. 2736
At the request of Mr. Kohl, the name of the Senator from Pennsylvania
(Mr. Casey) was added as a cosponsor of S. 2736, a bill to amend
section 202 of the Housing Act of 1959 to improve the program under
such section for supportive housing for the elderly, and for other
purposes.
S. 2908
At the request of Mr. Thune, his name was added as a cosponsor of S.
2908, a bill to amend title II of the Social Security Act to prohibit
the display of Social Security account numbers on Medicare cards.
S. 3140
At the request of Mr. Webb, the name of the Senator from New Jersey
(Mr. Menendez) was added as a cosponsor of S. 3140, a bill to provide
that 4 of the 12 weeks of parental leave made available to a Federal
employee shall be paid leave, and for other purposes.
S. 3484
At the request of Mr. Specter, the name of the Senator from
Connecticut (Mr. Dodd) was added as a cosponsor of S. 3484, a bill to
provide for a delay in the phase out of the hospice budget neutrality
adjustment factor under title XVIII of the Social Security Act.
S. 3487
At the request of Ms. Mikulski, her name was added as a cosponsor of
S. 3487, a bill to amend the National and Community Service Act of 1990
to expand and improve opportunities for service, and for other
purposes.
At the request of Mrs. Lincoln, her name was added as a cosponsor of
S. 3487, supra.
S. 3507
At the request of Mr. Reed, the name of the Senator from Indiana (Mr.
Bayh) was added as a cosponsor of S. 3507, a bill to provide for
additional emergency unemployment compensation.
S. 3512
At the request of Mr. Durbin, the name of the Senator from North
Dakota (Mr. Dorgan) was added as a cosponsor of S. 3512, a bill to
require the Secretary of Health and Human Services to remove social
security account numbers from Medicare identification cards and
communications provided to Medicare beneficiaries in order to protect
Medicare beneficiaries from identity theft.
S. 3529
At the request of Mr. Lugar, the name of the Senator from Illinois
(Mr. Durbin) was added as a cosponsor of S. 3529, a bill to authorize
appropriations for fiscal years 2010 through 2014 to provide assistance
to foreign countries to promote food security, to stimulate rural
economies, and to improve emergency response to food crises, to amend
the Foreign Assistance Act of 1961, and for other purposes.
S. 3532
At the request of Ms. Snowe, the name of the Senator from Illinois
(Mr. Durbin) was added as a cosponsor of S. 3532, a bill to amend the
Internal Revenue Code of 1986 to allow the Secretary of the Treasury to
establish the standard mileage rate for use of a passenger automobile
for purposes of the charitable contributions deduction and to exclude
charitable mileage reimbursements from gross income.
S. 3552
At the request of Mr. Lieberman, the name of the Senator from
Michigan (Ms. Stabenow) was added as a cosponsor of S. 3552, a bill to
conserve the United States fish and aquatic communities through
partnerships that foster fish habitat conservation and improve the
quality of life for the people of the United States and for other
purposes.
S. 3553
At the request of Ms. Murkowski, the name of the Senator from
Mississippi (Mr. Cochran) was added as a cosponsor of S. 3553, a bill
to exempt certain charitable flights from certain regulations
applicable to commercial flights.
S. 3644
At the request of Mr. Vitter, his name was added as a cosponsor of S.
3644, a bill to require the Secretary of Agriculture to provide crop
disaster assistance to agricultural producers that suffered qualifying
quantity or quality losses for the 2008 crop year due to a natural
disaster.
S. 3656
At the request of Mr. Schumer, the names of the Senator from Iowa
(Mr. Harkin), the Senator from Oregon (Mr. Wyden), the Senator from
Massachusetts (Mr. Kerry), the Senator from Colorado (Mr. Salazar), the
Senator from Washington (Ms. Cantwell), the Senator from California
(Mrs. Feinstein), the Senator from California (Mrs. Boxer) and the
Senator from Wisconsin (Mr. Feingold) were added as cosponsors of S.
3656, a bill to preserve access to healthcare under the Medicare and
Medicaid programs.
S. RES. 616
At the request of Mrs. Lincoln, the name of the Senator from Ohio
(Mr. Brown) was added as a cosponsor of S. Res. 616, a resolution
reducing maternal mortality both at home and abroad.
S. RES. 664
At the request of Mrs. Dole, the name of the Senator from Mississippi
(Mr. Cochran) was added as a cosponsor of S. Res. 664, a resolution
celebrating the centennial of Union Station in Washington, District of
Columbia.
____________________
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. ROCKEFELLER:
S. 3663. A bill to require the Federal Communications Commission to
provide for a short-term extension of the analog television
broadcasting authority so that essential public safety announcements
and digital television transition information may be provided for a
short time during the transition to digital television broadcasting; to
the Committee on Commerce, Science, and Transportation.
Mr. ROCKEFELLER. Mr. President, I rise today to introduce the Short-
term Analog Flash and Emergency Readiness Act. This simple piece of
legislation will help make sure those consumers who fail to make the
transition to Digital Television, DTV, by February 17, 2009 are not
left without access to emergency information. This bill will also allow
those consumers to understand what steps they need to take in order to
restore their television signals.
I voted against the Deficit Reduction Act of 2005, which directs that
on February 18, 2009, over-the-air full-power
[[Page 23647]]
television broadcasts, which are currently provided by television
stations in both analog and digital formats, will become digital only.
I voted against this bill in both the Commerce Committee and during its
consideration by the full Senate because it failed to address the core
policy questions of the implementation of the transition to DTV.
Specifically, it did not adequately address the minimization of
consumer disruption and the establishment a national interoperable
communications network with the analog spectrum that broadcasters were
vacating. I was one of only three ``No'' votes in Committee.
When the Commerce Committee passed its portion of the Deficit
Reduction Act of 2005, the then-Republican majority on the Committee
did not want to spend significant resources on the DTV transition to
minimize consumer disruption. Nor, did they want to spend any resources
on building a national interoperable public safety communications
network. The only thing that mattered to Republicans in 2005 was
generating sufficient money to meet our budget reconciliation
instructions. Because the Committee failed to set forth coherent policy
objectives in 2005, consumers and our Nation's first responders will
bear the brunt of that failure.
I believe that many have forgotten why we moved forward with the DTV
transition. It was to free up much needed spectrum to create a national
interoperable public safety communications network. I know the people
of West Virginia strongly support their first responders and would have
gladly accepted that transition to make sure that in times of crisis
our local police, fire, and emergency response teams could communicate.
Instead, the DTV transition has been sold as nothing more than having a
better television picture. That is unfortunate because we are making
this transition to address a critical public safety need--one
identified by the 9/11 Commission.
Unfortunately, the Federal Communications Commission still has not
devised a plan to establish this national public safety communications
network. The spectrum has been auctioned and the big wireless companies
have secured their futures. But our nation's first responders, which
should have been this Administration's first priority, are not much
closer to achieving interoperable communications.
As my good friend FCC Commissioner Michael Copps has stated, ``the
question of public safety is . . . the first obligation of the public
servant.'' In a more perfect world, our nation's first responders would
already have access to an interoperable and fully-funded broadband
network that makes use of dedicated public safety spectrum. We are
still a long way from developing this network for public safety, and
that is something of which we all should be ashamed. If we fail to
establish this network quickly and in a manner that works for the
public safety community, I am afraid we may have lost the opportunity
forever.
This Administration has failed consumers as well. In 2005, Congress
left almost all of the implementation of the transition to the private
sector--broadcasters, cable and satellite companies, and consumer
electronics retailers. Although well-heeled industries state that they
have devoted hundreds of millions of dollars to making Americans aware
of the DTV transition, I am not sure that it is going to minimize the
disruption.
The recent DTV transition test market of Wilmington, North Carolina
demonstrated that, even with extraordinary levels of outreach, some did
not know about the DTV transition. I would note that Wilmington
received far more attention than any market in West Virginia is likely
to receive, or any other part of the country for that matter.
Even if a consumer was aware of the DTV transition, several thousand
people called into the FCC for assistance--they could not set up their
box, they could not receive certain digital signals, or their antennae
needed adjustment, to name just a few of the problems. Consumers,
especially the elderly and those with limited English proficiency, are
going to need help in managing the transition.
Among its many shortcomings, the DTV Act did not require the Federal
agencies charged with administering the transition to develop a program
to assist consumers with attaching the converter boxes to their sets.
By contrast, in the United Kingdom, there is an assistance program,
known as ``Help Scheme,'' that will assist a many as 7 million
households with selecting, installing, and using DTV equipment.
Unfortunately, in the remaining time before the transition, we are
not going to be able to replicate the United Kingdom's consumer
assistance plan. But, we may be able to take small steps that can help
consumers.
My legislation is one such step. It simply allows the FCC to permit
analog television signals to be broadcast for thirty days after the
transition so that, at a minimum, one station in a market can send a
signal explaining what has happened to a consumer's television signal
and how to restore that signal. Far more importantly, it will allow the
broadcast of emergency information so that people are aware of
impending storms, floods, or other emergencies.
This was done in the Wilmington television market and people found it
to be beneficial. A hurricane almost hit Wilmington around the time of
its DTV transition. Because it was a test market, the government would
have had the luxury of postponing the transition if a hurricane struck
the region. On February 18, 2009, Americans left in the dark will not
have that luxury. They would not know if a Nor'easter is on its way, or
catastrophic flooding is occurring, or if a terrorist has once again
truck our Nation.
We cannot let that happen. We must pass this legislation before we
adjourn for the year.
______
By Mr. AKAKA (for himself and Mr. Pryor):
S. 3665. A bill to amend chapter 63 of title 5, United States Code,
to modify the rate of accrual of annual leave for administrative law
judges, contract appeals board members, and immigration judges; to the
Committee on Homeland Security and Governmental Affairs.
Mr. AKAKA. Mr. President, today I rise to introduce a bill to enhance
the annual leave for Administrative Law Judges, Contract Board of
Appeals Judges, and Immigration Law Judges in the Federal Government. I
want to thank Senator Pryor for his support of this bill.
Prior to 2004 Federal employees with less than three years of Federal
service accrued annual leave at a rate of 4 hours per biweekly pay
period. Employees with 3 to 15 years of service accrued leave at a rate
of 6 hours per pay period, and those with over 15 years of service
accrued leave at a rate of 8 hours.
As part of the Federal Workforce Flexibility Act of 2004, Congress
changed the leave accrual rate for new mid-career employees, allowing
agency heads to deem a period of qualified non-federal career
experience for an individual an equal period of service performed by
Federal employee. In addition, the act stated that all senior
executives and other senior level employees shall accrue annual leave
at the maximum rate of 8 hours for each bi-weekly pay period.
In the past, ALJs, CBAJs, IJs and members of the Senior Executive
Service have been treated similarly. However, the Office of Personnel
Management is now taking the position that these judges should not
receive the same leave benefits as members of the SES since they are
not under a pay for performance system. In addition to my general
concerns over pay for performance, I believe it is inappropriate for
ALJs, CBAJs, and IJs to be in such a system as it could threaten their
independence. In fact, ALJs and CBAJs are not allowed to receive bonus
awards for this very reason.
Given the shortage of ALJs to adjudicate social security benefits and
the need to recruit more immigrations judges, I believe that Congress
should act to provide these judges with enhanced leave benefits.
I am pleased that this bill has the support of the Association of
Administrative Law Judges, the International
[[Page 23648]]
Federation of Professional and Technical Engineers, the National
Association of Immigration Judges, and the Senior Executives
Association.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3665
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. ACCRUAL RATE OF ANNUAL LEAVE FOR ADMINISTRATIVE
LAW JUDGES, CONTRACT APPEALS BOARD MEMBERS, AND
IMMIGRATION JUDGES.
(a) In General.--Section 6303 of title 5, United States
Code, is amended by striking subsection (f) and inserting the
following:
``(f) Notwithstanding any other provision of this section,
the rate of accrual of annual leave under subsection (a)
shall be 1 day for each full biweekly pay period in the case
of any employee who--
``(1) holds a position which is subject to--
``(A) section 5372, 5372a, 5376, or 5383; or
``(B) a pay system equivalent to a pay system to which any
provision under paragraph (1) applies, as determined by the
Office of Personnel Management; or
``(2) is an immigration judge as defined under section
101(b)(4) of the Immigration and Nationality Act (8 U.S.C.
1101(b)(4)).''.
(b) Effective Date.--The amendment made by this section
shall take effect on the first day of the first applicable
pay period beginning on or after 30 days after the date of
enactment of this Act.
______
By Ms. KLOBUCHAR (for herself and Mr. Hatch):
S. 3666. A bill to require certain metal recyclers to keep records of
their transactions in order to deter individuals and enterprises
engaged in theft and interstate fencing of stolen copper, and for other
purposes; to the Committee on Commerce, Science, and Transportation.
Mr. HATCH. Mr. President, I rise today to introduce with my friend
from Minnesota, Senator Amy Klobuchar, the Copper Theft Prevention Act
of 2008. I am pleased to be working with Senator Klobuchar on this
initiative to curb copper theft, which is on the rise in our country
and around the world.
We are living in tough economic times where the value of precious
metals is at an all time high. Due to worldwide economic growth,
particularly in fast-growing China, copper is worth between $3 to $4 a
pound. Copper is used in the manufacturing of consumer goods, and the
construction, electric utility, and telecommunications industries.
Because of the metal's high ductility, malleability, and electrical
conductivity, copper has become the benchmark for all types of wiring.
Stolen copper can easily be turned into cash and a very small
percentage of people who steal copper are actually caught. It's no
wonder why thieves are stealing copper in every form--costing Americans
hundreds of thousands of dollars in theft, damage, and threats to
safety.
To steal a large amount of copper quickly and safely, thieves target
spools on the back of trucks and storage yards. This was evidenced
several months ago in Ogden, Utah, when a thief stole a 1,700-pound
load of copper from a metal yard apparently using the metal company's
Caterpillar excavator to load it into his truck. I am aware of another
occurrence in Utah County where a man was arrested for repeatedly
stealing copper wiring nearly every week from a construction company.
The thief would load his truck with the wire, then sell it anywhere
between $800 and $1,200. The actual value of the wire is more than
$18,000.
Some of the most dangerous places to steal copper wire are from
substations and from utility poles. According to an April 2007 report
published by the U.S. Department of Energy entitled, ``An Assessment of
Copper Wire Thefts from Electric Utilities,'' thefts at substations and
utility poles are
related to the large number of methamphetamine users who
are stealing copper wire. Medical studies have shown that
this drug reduces the ability of the brain to assess risk
before taking action; hence users of this drug are not
concerned about the risks involved in stealing wire from high
voltage substations, utility wires, and transformers. The
people who risk their life to steal copper wire from a
substation typically only receive a few hundred dollars from
the sale of the stolen wire, sufficient for the next drug
fix. Thefts from storage sites and trucks are most likely
done by professional criminal and not the drug abusers.
Storage sites and trucks are also more difficult to break
into than an unguarded substation or utility pole.
We must cut off the incentives that fuel such blatant criminal
activity, and I believe the proposed legislation goes a long way in
accomplishing this goal. Under the proposed bill, scrap metal dealers
would be: required to keep records of copper transactions, including
the name and address of the seller, the date of the transaction, the
quantity and description of the copper being purchased, an identifying
number from a driver's license or other government-issued
identification and, where possible, the make, model and tag number of
the vehicle used to deliver the copper to the scrap dealer.
Required to maintain these records for a minimum of 1 year from the
date of the transaction and make them available to law enforcement
agencies for use in tracking down and prosecuting copper theft crimes.
Required to perform transactions of more than $250 by check, rather
than cash.
Subject to civil penalties of up to $10,000 for failing to document a
transaction or engaging in cash transactions of more than $250.
Let me be clear--the bill does not preempt States from enacting their
own laws. Indeed, the proposed legislation provides a baseline from
which all States must operate.
On this point, Utah law currently requires anyone selling certain
metals to provide identification before the sale is final. Some in Utah
would like to tighten the law to include additional regulation and
legislators would not be precluded from doing so. Indeed, States can
enact more robust legislation as necessary.
I am committed to moving this legislation forward and hope that my
colleagues will join our effort to refine and enact this important bill
as it moves through the legislative process.
______
By Mr. BIDEN:
S. 3668. A bill to create a grant program for collaboration programs
that ensure coordination among criminal justice agencies, adult
protective services agencies, victim assistance programs, and other
agencies or organizations providing services to individuals with
disabilities in the investigation and response to abuse of or crimes
committed against such individuals; to the Committee on the Judiciary.
Mr. BIDEN. Mr. President, I rise today to introduce the Crime Victims
with Disabilities Act of 2008.
Adults with disabilities experience violence or abuse at least twice
as often as people without disabilities, and adults with developmental
disabilities are at risk of being physically or sexually assaulted at
rates four to ten times greater than other adults. In fact, an
estimated 5 million crimes are committed annually against persons with
developmental disabilities and an estimated 70 percent of these crimes
are not reported.
Adding insult to injury, individuals with disabilities suffer
additional ``victimization'' within the justice system, due to lack of
physical, programmatic, and communications accommodations needed for
equal access.
The Crime Victims with Disabilities Act takes a commonsense approach
to fixing this problem by providing funds to increase the
investigation, prosecution, and prevention of crimes against persons
with disabilities and by facilitating collaboration among criminal
justice agencies and other agencies and organizations that provide
services to people with disabilities to improve services to those who
are victimized.
Collaboration among criminal justice agencies and agencies and
organizations that provide services to individuals with disabilities is
necessary to ensure that crimes are reported and investigated properly,
prosecutors are properly trained, appropriate accommodations are
provided to disabled victims, and communication between criminal
justice agencies and organizations that provide services to individuals
with disabilities is effective.
The bill funds a modest grant program that would allow States, units
of
[[Page 23649]]
local government, and Indian Tribes to develop programs to facilitate
collaboration among criminal justice agencies and agencies and
organizations that provide services to individuals with disabilities
for these purposes. The bill authorizes $50,000 for each planning grant
and $300,000 for each implementation grant for a total authorization
for the grant program of $10 million for the first year.
The bill also authorizes $4 million over 4 years to fund research to
assist the Attorney General in collecting valid, reliable national data
relating to crimes against individuals with developmental and related
disabilities for the National Crime Victims Survey conducted by the
Bureau of Justice Statistics of the Department of Justice as required
by the Crime Victims with Disabilities Awareness Act. Currently, the
Bureau of Justice Statistics does not specifically collect this data,
leaving many crimes against persons with disabilities unreported in the
survey and making it difficult to address this problem adequately.
The Association of University Centers on Disabilities, the National
Center for Victims of Crime, the National Council on Independent
Living, the National Disability Rights Network, the National Child
Abuse Coalition, Easter Seals, the Arc of the United States, and United
Cerebral Palsy have endorsed the bill. I hope my colleagues will join
me in supporting this bill which will protect some of the most
vulnerable members of our society--individuals with disabilities who
are victims of crime.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3668
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Crime Victims with
Disabilities Act of 2008''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Adults with disabilities experience violence or abuse
at least twice as often as people without disabilities, and
adults with developmental disabilities are at risk of being
physically or sexually assaulted at rates four to ten times
greater than other adults.
(2) Individuals with disabilities suffer from additional
``victimization'' within the justice system, due to lack of
physical, programmatic, and communications accommodations
needed for equal access.
(3) Women with disabilities are more likely to be
victimized, to experience more severe and prolonged violence,
and to suffer more serious and chronic effects from that
violence, than women without such disabilities.
(4) Sixty-eight to 83 percent of women with developmental
disabilities will be sexually assaulted in their lifetime.
(5) An estimated 5,000,000 crimes are committed against
individuals with developmental disabilities annually.
(6) Over 70 percent of crimes committed against individuals
with developmental disabilities are not reported.
(7) Studies in the United States, Canada, Australia, and
Great Britain consistently show that victims with
developmental disabilities suffer repeated victimization
because so few of the crimes against them are reported.
(8) The National Crime Victims Survey conducted annually by
the Bureau of Justice Statistics of the Department of
Justice, does not specifically collect data relating to
crimes against individuals with developmental disabilities,
nor do they use disability as a demographic variable as they
use other important demographic variables, such as gender,
age, and racial and ethnic membership.
SEC. 3. PURPOSE.
(a) In General.--The purpose of this Act is to increase the
awareness, investigation, prosecution, and prevention of
crimes against individuals with a disability, including
developmental disabilities, and improve services to those who
are victimized, by facilitating collaboration among the
criminal justice system and a range of agencies and other
organizations that provide services to individuals with
disabilities.
(b) Need for Collaboration.--Collaboration among the
criminal justice system and agencies and other organizations
that provide services to individuals with disabilities is
needed to--
(1) protect individuals with disabilities by ensuring that
crimes are reported, and that reported crimes are actively
investigated by both law enforcement agencies and agencies
and other organizations that provide services to individuals
with disabilities;
(2) provide prosecutors and victim assistance organizations
with adequate training to ensure that crimes against
individuals with disabilities are appropriately and
effectively addressed in court;
(3) identify and ensure that appropriate reasonable
accommodations are provided to individuals with disabilities
in a safe and conducive environment, allowing crimes to be
reported accurately to law enforcement agencies; and
(4) promote communication among criminal justice agencies,
and agencies and other organizations that provide services to
individuals with disabilities, including Victim Assistance
Organizations, to ensure that the needs of crime victims with
disabilities are met.
SEC. 4. DEPARTMENT OF JUSTICE CRIME VICTIMS WITH DISABILITIES
COLLABORATION PROGRAM.
The Omnibus Crime Control and Safe Streets Act of 1968 (42
U.S.C. 3711 et seq.) is amended by adding at the end the
following:
``PART JJ--GRANTS TO RESPOND TO CRIMES AGAINST INDIVIDUALS WITH
DISABILITIES
``SEC. 3001. CRIME VICTIMS WITH DISABILITIES COLLABORATION
PROGRAM GRANTS.
``(a) Definitions.--In this section:
``(1) Applicant.--The term `applicant' means a State, unit
of local government, Indian tribe, or tribal organization
that applies for a grant under this section.
``(2) Collaboration program.--The term `collaboration
program' means a program to ensure coordination between or
among a criminal justice agency, an adult protective services
agency, a victim assistance organization, and an agency or
other organization that provides services to individuals with
disabilities, including but not limited to individuals with
developmental disabilities, to address crimes committed
against individuals with disabilities and to provide services
to individuals with disabilities who are victims of crimes.
``(3) Criminal justice agency.--The term `criminal justice
agency' means an agency of a State, unit of local government,
Indian tribe, or tribal organization that is responsible for
detection, investigation, arrest, enforcement, adjudication,
or incarceration relating to the violation of the criminal
laws of that State, unit of local government, Indian tribe,
or tribal organization, or an agency contracted to provide
such services.
``(4) Adult protective services agency.--The term `adult
protective services agency' means an agency that provides
adult protective services to adults with disabilities, such
as the protection and advocacy systems established under
section 143 of the Developmental Disabilities Assistance and
Bill of Rights Act of 2000 (42 U.S.C. 15043), including--
``(A) receiving reports of abuse, neglect, or exploitation;
``(B) investigating the reports described in subparagraph
(A);
``(C) case planning, monitoring, evaluation, and other
casework and services; and
``(D) providing, arranging for, or facilitating the
provision of medical, social service, economic, legal,
housing, law enforcement, or other protective, emergency, or
support services for adults with disabilities.
``(5) Day program.--The term `day program' means a
government or privately funded program that provides care,
supervision, social opportunities, or jobs to individuals
with disabilities.
``(6) Implementation grant.--The term `implementation
grant' means a grant under subsection (e).
``(7) Individuals with disabilities.--The term `individuals
with disabilities' means individuals--
``(A) 18 years of age or older; and
``(B) who have a developmental, cognitive, physical, or
other disability that results in substantial functional
limitations in 1 or more of the following areas of major life
activity:
``(i) Self-care.
``(ii) Receptive and expressive language.
``(iii) Learning.
``(iv) Mobility.
``(v) Self-direction.
``(vi) Capacity for independent living.
``(vii) Economic self-sufficiency.
``(viii) Cognitive functioning.
``(ix) Emotional adjustment.
``(8) Planning grant.--The term `planning grant' means a
grant under subsection (f).
``(9) Secretary.--The term `Secretary' means the Secretary
of Health and Human Services.
``(10) Unit of local government.--The term `unit of local
government' means any city, county, township, town, borough,
parish, village, or other general purpose political
subdivision of a State.
``(b) Authorization.--In consultation with the Secretary,
the Attorney General may make grants to applicants to prepare
a comprehensive plan for or to implement a collaboration
program that provides for--
``(1) the investigation and remediation of instances of
abuse of or crimes committed against individuals with
disabilities; or
``(2) the provision of services to individuals with
disabilities who are the victims of a crime or abuse.
``(c) Use of Funds.--A grant under this section shall be
used for a collaborative program that--
[[Page 23650]]
``(1) receives reports of abuse of individuals with
disabilities or crimes committed against such individuals;
``(2) investigates and evaluates reports of abuse of or
crimes committed against individuals with disabilities;
``(3) visits the homes or other locations of abuse, and, if
applicable, the day programs of individuals with disabilities
who have been victims of abuse or a crime for purposes of,
among other things, assessing the scene of the abuse and
evaluating the condition and needs of the victim;
``(4) identifies the individuals responsible for the abuse
of or crimes committed against individuals with disabilities;
``(5) remedies issues identified during an investigation
described in paragraph (2);
``(6) prosecutes the perpetrator, where appropriate, of any
crime identified during an investigation described in
paragraph (2);
``(7) provides services to and enforces statutory rights of
individuals with disabilities who are the victims of a crime;
and
``(8) develops curricula and provides interdisciplinary
training for prosecutors, criminal justice agencies,
protective service agencies, victims assistance agencies,
educators, community based providers and health, mental
health, and allied health professionals in the area of
disabilities, including developmental disabilities.
``(d) Applications.--
``(1) In general.--To receive a planning grant or an
implementation grant, an applicant shall submit an
application to the Attorney General at such time, in such
manner, and containing such information as the Attorney
General, in consultation with the Secretary, may reasonably
require, in addition to the information required by
subsection (e)(1) or (f)(1), respectively.
``(2) Combined planning and implementation grant
application.--
``(A) In general.--The Attorney General, in consultation
with the Secretary, shall develop a procedure allowing an
applicant to submit a single application requesting both a
planning grant and an implementation grant.
``(B) Conditional grant.--The award of an implementation
grant to an applicant submitting an application under
subparagraph (A) shall be conditioned on successful
completion of the activities funded under the planning grant,
if applicable.
``(e) Planning Grants.--
``(1) Applications.--An application for a planning grant
shall include, at a minimum--
``(A) a budget;
``(B) a budget justification;
``(C) a description of the outcome measures that will be
used to measure the effectiveness of the program;
``(D) a schedule for completing the activities proposed in
the application;
``(E) a description of the personnel necessary to complete
activities proposed in the application; and
``(F) provide assurances that program activities and
locations are and will be in compliance with section 504 of
the Rehabilitation Act of 1973 throughout the grant period.
``(2) Period of grant.--A planning grant shall be made for
a period of 1 year, beginning on the first day of the month
in which the planning grant is made.
``(3) Amount.--The amount of planning grant shall not
exceed $50,000, except that the Attorney General may, for
good cause, approve a grant in a higher amount.
``(4) Limit on number.--The Attorney General, in
consultation with the Secretary, shall not make more than 1
such planning grant to any State, unit of local government,
Indian tribe, or tribal organization.
``(f) Implementation Grants.--
``(1) Implementation grant applications.--An application
for an implementation grant shall include the following:
``(A) Collaboration.--An application for an implementation
grant shall--
``(i) identify not fewer than 1 criminal justice
enforcement agency or adult protective services organization
and not fewer than 1 agency, crime victim assistance program,
or other organization that provides services to individuals
with disabilities, such as the protection and advocacy
systems established under section 143 of the Developmental
Disabilities Assistance and Bill of Rights Act of 2000 (42
U.S.C. 15043), that will participate in the collaborative
program; and
``(ii) describe the responsibilities of each participating
agency or organization, including how each agency or
organization will use grant funds to facilitate improved
responses to reports of abuse and crimes committed against
individuals with disabilities.
``(B) Guidelines.--An application for an implementation
grant shall describe the guidelines that will be developed
for personnel of a criminal justice agency, adult protective
services organization, crime victim assistance program, and
agencies or other organizations responsible for services
provided to individuals with disabilities to carry out the
goals of the collaborative program.
``(C) Financial.--An application for an implementation
grant shall--
``(i) explain why the applicant is unable to fund the
collaboration program adequately without Federal funds;
``(ii) specify how the Federal funds provided will be used
to supplement, and not supplant, the funding that would
otherwise be available from the State, unit of local
government, Indian tribe, or tribal organization; and
``(iii) outline plans for obtaining necessary support and
continuing the proposed collaboration program following the
conclusion of the grant under this section.
``(D) Outcomes.--An application for an implementation grant
shall--
``(i) identify the methodology and outcome measures, as
required by the Attorney General, in consultation with the
Secretary, for evaluating the effectiveness of the
collaboration program, which may include--
``(I) the number and type of agencies participating in the
collaboration;
``(II) any trends in the number and type of cases referred
for multidisciplinary case review;
``(III) any trends in the timeliness of law enforcement
review of reported cases of violence against individuals with
a disability; and
``(IV) the number of persons receiving training by type of
agency;
``(ii) describe the mechanisms of any existing system to
capture data necessary to evaluate the effectiveness of the
collaboration program, consistent with the methodology and
outcome measures described in clause (i) and including, where
possible, data regarding--
``(I) the number of cases referred by the adult protective
services agency, or other relevant agency, to law enforcement
for review;
``(II) the number of charges filed and percentage of cases
with charges filed as a result of such referrals;
``(III) the period of time between reports of violence
against individuals with disabilities and law enforcement
review; and
``(IV) the number of cases resulting in criminal
prosecution, and the result of each such prosecution; and
``(iii) include an agreement from any participating or
affected agency or organization to provide the data described
in clause (ii).
``(E) Form of data.--The Attorney General, in consultation
with the Secretary, shall promulgate and supply a common
electronic reporting form or other standardized mechanism for
reporting of data required under this section.
``(F) Collaboration set aside.--Not less than 5 percent and
not more than 10 percent of the funds provided under an
implementation grant shall be set aside to procure technical
assistance from any recognized State model program or from a
recognized national organization, as determined by the
Attorney General (in consultation with the Secretary),
including the National District Attorneys Association and the
National Adult Protective Services Association.
``(G) Other programs.--An applicant for an implementation
grant shall describe the relationship of the collaboration
program to any other program of a criminal justice agency or
other agencies or organizations providing services to
individuals with disabilities of the State, unit of local
government, Indian tribe, or tribal organization applying for
an implementation grant.
``(2) Period of grant.--
``(A) In general.--An implementation grant shall be made
for a period of 2 years, beginning on the first day of the
month in which the implementation grant is made.
``(B) Renewal.--An implementation grant may be renewed for
1 additional period of 2 years, if the applicant submits to
the Attorney General and the Secretary a detailed explanation
of why additional funds are necessary.
``(3) Amount.--An implementation grant shall not exceed
$300,000.
``(g) Evaluation of Program Efficacy.--
``(1) Establishment.--The Attorney General, in consultation
with the Secretary, shall establish a national center to
evaluate the overall effectiveness of the collaboration
programs funded under this section.
``(2) Responsibilities.--The national center established
under paragraph (1) shall--
``(A) analyze information and data supplied by grantees
under this section; and
``(B) submit an annual report to the Attorney General and
the Secretary that evaluates the number and rate of change of
reporting, investigation, and prosecution of charges of a
crime or abuse against individuals with disabilities.
``(3) Authorization.--The Attorney General may use not more
than $500,000 of amounts made available under subsection (h)
to carry out this subsection.
``(h) Authorization of Appropriations.--There are
authorized to be appropriated to the Department of Justice to
carry out this section--
``(1) $10,000,000 for fiscal year 2009; and
``(2) such sums as are necessary for each of fiscal years
2010 through 2015.''.
SEC. 5. RESEARCH GRANT AND REPORT.
(a) In General.--The purpose of this section is to provide
for research to assist the Attorney General in collecting
valid, reliable national data relating to crimes against
individuals with developmental and related disabilities for
the National Crime Victims Survey conducted by the Bureau of
Justice Statistics of the Department of Justice as
[[Page 23651]]
required by the Crime Victims with Disabilities Awareness
Act.
(b) National Interdisciplinary Advisory Council.--
(1) In general.--Not later than 90 days after the date of
enactment of this Act, the Secretary of Health and Human
Services shall establish a national interdisciplinary
advisory council (referred to in this section as the
``advisory council''), that includes individuals with
disabilities, which shall provide input into the
methodologies used to collect valid, reliable national data
on crime victims with developmental and related disabilities,
participate in reviewing the data collected through the
research grant program, and assist in writing the final
report.
(2) Recommended methodology.--Not later than 6 months after
the establishment of the advisory council, the advisory
council shall provide to the Secretary of Health and Human
Services its recommended methodology for collecting incidence
data on violence against people with developmental and
related disabilities.
(c) Research Grant Program.--Not later than 12 months after
the date of the enactment of this Act, the Secretary of
Health and Human Services shall--
(1) review the methodology developed by the advisory
council related to collecting incidence data on violence
against people with developmental and related disabilities;
and
(2) based on such review, shall award grants in accordance
with this section to eligible recipients, to collect valid,
reliable national data on crime victims with developmental
and related disabilities that can be validly compared to data
from the National Crime Victims Survey.
(d) Report.--Not later than 12 months after the Secretary
of Health and Human Services awards the research grants under
subsection (c), the advisory council shall review the data
eligible recipients of the grants collected and write a
report to be presented to the Secretary of Health and Human
Services, the Attorney General, and the Bureau of Justice
Statistics.
(e) Definitions.--
(1) Eligible recipient.--The term ``eligible recipient''
means--
(A) a State agency;
(B) a private, nonprofit organization;
(C) a University Center for Excellence in Developmental
Disabilities; or
(D) any public entity that has a demonstrated ability to--
(i) collaborate with criminal justice, child welfare, and
other agencies and organizations that provide services to
individuals with disabilities, including victim assistance
and violence prevention organizations, to ensure that
incidence data can be aggregated to accurately show the
incidence of abuse of individuals with disabilities
nationally; and
(ii) conduct research and collect data to measure the
extent of the problem of crimes against individuals with
developmental and related disabilities, including--
(I) understanding the nature and extent of crimes against
individuals with developmental and related disabilities,
including domestic violence and all types of abuse;
(II) describing the manner in which the justice system
responds to crimes against individuals with developmental and
related disabilities; and
(III) identifying programs, policies, or laws that hold
promises for making the justice system more responsive to
crimes against individuals with developmental and related
disabilities.
(2) Developmental disabilities.--The term ``developmental
disabilities'' has the meaning given that term in section
102(8) of the Developmental Disabilities Assistance and Bill
of Rights Act of 2000 (42 U.S.C. 15002(8)).
(3) Related disabilities.--The term ``related
disabilities'' means autism spectrum disorders, cerebral
palsy, spina bifida, epilepsy, traumatic brain injury, or
other lifelong disabilities that are acquired prior to the
age of 21.
(f) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section $1,000,000 for
each of fiscal years 2009 through 2012.
______
By Mr. VOINOVICH:
S. 3669. A bill to reduce gas prices by promoting domestic energy
production, alternative energy, and conservation, and for other
purposes; to the Committee on Energy and Natural Resources.
Mr. VOINOVICH. Mr. President, I rise today to introduce legislation,
the Harmonizing America's Energy, Economy, Environment, and National
Security Act, that I believe can lead our Nation out of the current
energy crisis.
Much of the Nation's attention has understandably been focused on the
financial turmoil taking place on Wall Street. Since the very
beginning, I have been hard at work in addressing the financial crisis
and I will be supporting the economic stabilization bill when the
Senate votes tonight.
But I will vote with a heavy heart, for I have spent my entire career
focusing on eliminating debt at the local, State and Federal level.
While deciding to vote for a package of this magnitude feels like being
punched in the gut, the thought of what would happen to average
Americans if we did nothing is much more painful. I am, however, very
pleased to see that any profit we may make off this deal will be used
to pay down the national debt.
This is affecting not only Wall Street but Main Street and my street.
Ohioans depend on credit to buy a home, drive to work and send their
children to school. If this doesn't pass, the possible ramifications
are staggering. Imagine if you can, businesses laying off staff or
closing completely because they can't make payroll; retirement funds
that have already taken a dramatic hit being reduced to nothing;
parents unable to get a loan to pay for child's college tuition;
families unable to get credit for a car or a house; cities unable to
float bonds to build hospitals or schools; and home prices continuing
to plummet.
We must act Mr. President. We must set aside our differences and our
ideologies and do what is right. But our work cannot stop here. We must
make a full-court press to stabilize the housing market and secure our
energy supplies. While we have been debating and acting on the
financial crisis, our energy crisis has not only continued, but in many
ways grown worse. It remains an issue that needs to be addressed sooner
rather than later, and if our economy is to quickly recover, a
comprehensive energy policy will need to be part of the equation.
I have heard loud and clear from thousands of Ohioans how this energy
crisis is directly affecting them and their loved ones. They are
expecting that we work together in bipartisan fashion to craft
legislation that will address our Nation's long-term energy
requirements.
Take for example, the severe fuel supply disruption created by our
shortsighted offshore drilling policy and hurricanes Ike and Gustav.
Both hurricanes followed paths that paved straight through the heart of
our Nation's offshore oil production and home to the bulk of our
refining capacity. Due to the frequency of gulf hurricanes, many oil
experts have pointed to this as a reason we need to open additional
areas of the Outer Continental Shelf outside of the Gulf of Mexico.
With 25 percent of our oil production currently taking place within the
Gulf of Mexico, gulf hurricanes frequently lead to wild price spikes in
the gasoline market as oil rigs and refineries are taken off line to
avoid damage and loss of life.
According to the Energy Information Agency, Ike and Gustav lead to a
25 percent drop in our domestic oil production compared to this time
last year, from 5.1 billion barrels a day to 3.8 billion barrels per
day. The loss in refining capacity cut our gasoline inventories to
levels we have not seen since 1967, resulting in widespread fuel
shortages that left many in the Southeast driving from gas station to
gas station, desperate to find fuel for their cars. Much of the reason
why these supply disruptions have not spread across the country is that
we have reached out and imported large quantities of gasoline from
overseas. Some of which has undoubtedly come from countries like
Venezuela, that do not have our best interests at heart.
This situation is cause for concern in its own right, but is also
underscored by the current financial crisis and the fact that this is
no longer a question about the price of oil. Energy security is a
matter of national security.
We have clearly ignored our financial situation for far too long. The
national debt stands at $9.6 trillion, almost double the $5.4 trillion
debt that existed when the senator came to the Senate in 1999. By the
end of 2009, the national debt is expected to have grown to $10.5
trillion. The Congressional Budget Office said the Federal Government
will finish the fiscal year with a near-record deficit of $407 billion.
These numbers do not include borrowing from the Social Security Trust
Fund which would put the overall number close to $600 billion and $700
billion by next year.
We cannot overlook our ballooning national debt. Today, 51 percent of
the
[[Page 23652]]
privately-owned national debt is held by foreign creditors--mostly
foreign central banks. Foreign creditors provided more than 70 percent
of the funds that the U.S. has borrowed since 2001, according to the
Department of Treasury. And who are these creditors?
According to the Treasury Department, the three largest foreign
holders of U.S. debt are China, Japan, and OPEC Nations.
This is insane and it has to stop. We cannot afford to allow the
countries that control our oil and our debt to control our future.
Americans are hurting from our addiction to oil, I'm not sure they
fully realize the extent our national security, and indeed our very way
of life, is threatened by our reliance on foreign oil.
Every year we send billions of dollars overseas for oil to pad the
coffers of many Nations that wish our demise. In fact, in 2007, we
spent more than $327 billion to import oil, and 60 percent of that, or
nearly $200 billion, went to the oil-exporting OPEC nations. In 2008,
the amount we will spend to import oil is expected to double to more
than $600 billion, $360 billion of which will come from OPEC. Let's
take a moment to put those import figures into context. When compared
to our FY2008 budget for our Nation's defense, which was more than $693
billion, the $600 billion we will spend to import oil in 2008 is nearly
equal to our entire defense budget.
There is no question that our dependence on foreign oil has serious
national security implications. In addition to funding our enemies--as
I just explained--we cannot ignore the fact that much of our oil comes
from and travels through the most volatile regions of the world.
A couple of years ago, I attended a series of war games hosted by the
National Defense University. I saw firsthand how our country's economy
could be brought to its knees if somebody cut off our oil.
In 2006, Hillard Huntington, Executive Director of Stanford
University's Energy Modeling Forum testified before the Senate Foreign
Relations Committee, and based on his modeling, ``the odds of a foreign
oil disruption happening over the next 10 years are slightly higher
[than] 80 percent.'' He went on to testify that if global production
were reduced by merely 2.1 percent due to some event, that it would
have a more serious effect on oil prices and the economy than
hurricanes Katrina and Rita.
Let us take a moment to think of our Nation like a business. Our
feedstock is oil, and our of competitors control the cost of our oil.
We have debt, but our competitors also control our debt. What's to keep
our competitors from raising prices, calling in our debt and running us
out of business?
I hope this scenario scares you as much as it scares me.
But also keep in mind, that as Congress sat here and twiddle its
thumbs over simply expanding domestic drilling within our own borders,
Russia and China were actively and aggressively laying claim to energy
resources around the globe.
Russia, the world's second biggest oil exporter, has its sights on a
large section of the Arctic seafloor that is believed to contain
billion of barrels of fuel equivalent. The country has also made moves
to control a larger portion of the world's natural gas reserves.
Russia, which has significant reserves of natural gas, is considering
the creation of a natural gas cartel similar to OPEC. Venezuela and
Iran have expressed interest.
Russia has proven it has no qualms with using energy as a weapon. In
1990, Russia tried to suppress independence movements in the Baltics by
cutting energy supplies. In all, Russia has used energy as a tool to
further their foreign policy goals on no less than six countries.
Energy is believed to be one of the driving reasons for Russia's
military action in the independent nation of Georgia.
China as well is moving ahead in securing its energy future. In
Africa, China is handing out loans and funding expansive infrastructure
projects in an effort to lay claim to lucrative oil reserves. With the
help of Chinese investment, Angola recently passed Nigeria to become
the largest petroleum producer on the continent.
I am going to be brutally honest with you folks, the future of our
country is in jeopardy. We cannot continue to transfer our wealth
overseas to this degree without expecting serious consequences. Rather
than addressing these national security concerns we have been living
the life of Riley, and allowed the environmental movement to run wild.
Congress let them get away with. We let them get away with it Mr.
President. Why? Because oil was cheap and so Congress felt no urgency
to act. Well, oil is not cheap anymore. While detrimental to our
economy and competitiveness, the high price of oil finally spurred some
of my colleagues into action and I am proud that Congress has taken
some steps to address the energy crisis.
The recently passed fiscal year 2009 Continuing Resolution removed
the moratoria on oil exploration in the Outer Continental Shelf and
moratorium on regulations for the development of oil shale. Reserves in
the Outer Continental Shelf are believed to equal 8.5 billion barrels
of oil, and undiscovered resources could equal ten times that. There
are currently 800 billion barrels of technically recoverable reserves
locked up in our Nation's oil shale. This is three times larger than
the total proven oil reserves of Saudi Arabia.
The Senate has also passed a tax extenders package that includes many
incentives to develop advanced alternative energies that will lead our
country to a future free of oil. Included in the package were popular
tax credits for the wind and solar industry that have helped foster
strong emerging industries in my home State of Ohio.
Congress needs to continue to act. I believe the Harmonizing
America's Energy, Economy, Environment, and National Security Act is
the vehicle for a bipartisan effort to develop a meaningful
comprehensive energy plan.
Addressing this crisis requires nothing less than a Second
Declaration of Independence--to move us away from foreign sources of
energy in the near term and away from oil in the long term.
As you know, oil is not easily found nor substituted, and it will
remain an integral component to our economy in the short-term. But we
must make investments today that will help us achieve our goal
tomorrow. To do this I believe we must find more, use less, and
conserve what we have.
In order to find more and stabilize our Nation's energy supply, my
legislation would encourage the development of oil resources within the
Outer Continental Shelf and with regards to our oil shale reserves. It
would also open ANWR to responsible development, where it is believed
that there is over 10 billion barrels of oil.
While these resources will not physically come online for a number of
years, moves to expand development will send a clear signal to the
market that we are serious about meeting our future energy demands and
begin to drive down the cost of oil because investors will know that
gas won't be worth as much in the future and will therefore sell it off
today--lowering the cost immediately.
And while we must increase our production of fossil fuels to relieve
costs and reestablish our independence in the short term, in the long
term we must reduce our demand for oil.
With that goal in mind, it is essential that we explore alternative
means to meet our Nation's energy needs.
It is long past time for our government to provide the spark to
rekindle our Nation's creativity and innovation. Following Russia's
launch of Sputnik, President Kennedy challenged our country to be the
first in the world to land a man on the moon. We must now undertake a
similar Apollo-like project to establish clean, reliable and
domestically abundant energy alternatives and in turn usher in a new
era of American freedom and independence.
My legislation would help to fund such a project by setting aside a
portion of the federal revenues raised through lease revenues in the
Outer
[[Page 23653]]
Continental Shelf and ANWR to be used for the development of advanced
alternative energies, like wind, solar, fuel cells, advanced batteries,
and advanced biofuels. It would also set aside funds to be explicitly
to boost funding for the Low-Income Home Energy Assistance Program and
to pay down our national debt.
The bill will also repeal Section 526, a provision that places our
domestic coal-to-liquid industry in jeopardy. We have the largest coal
reserves in the world, and at current rates of consumption, U.S. coal
deposits will last for more than 240 years.
Coal can provide significant new supplies of affordable synthetic
fuels for transportation. A lot of Americans don't understand that many
country's get their oil from coal. In fact, South Africa gets nearly 70
percent of their oil from coal. But we are beginning to make advances
here. In fact, Baard Energy is planning a CTL and biomass facility in
SE Ohio that will produce 53,000 BPD of jet and diesel fuel, and other
liquid production from coal and biomass feedstocks.
Last but not least, as we look to increase our supply and spark new
innovation, we must also be more responsible with the energy we
currently use. My legislation would fund the development of new
conservation technologies and practices and would help to disseminate
these across the country.
Americans today demand action and they demand we come together in a
bipartisan fashion to solve our energy crisis. For 10 years I have been
a member of the Environmental and Public Works Committee and for 10
years I have tried to coax Congress into harmonizing our energy,
economy and the environment. Congress has refused and now the chickens
have come home to roost.
I believe that the best message we can send to OPEC, those investing
in the oil market, and indeed the entire world, is that we get it. We
must demonstrate that we are going to find more by going after every
drop of oil that we can responsibly drill and that we are going to use
less by undertaking a new Apollo project to make the U.S. the most oil
independent nation in the world.
I envision an America ten years from now where we have enough oil to
take care of our needs. I imagine an America that is the least reliant
country in the world on oil, an America where our economy is not
threatened by our reliance on foreign energy sources. It will be an
America that has created hundreds of thousands of jobs through the
responsible development of our Nation's resources and the through the
creation of new industries in the field of alternative energy.
Wouldn't it be great for our children and grandchildren to one day
celebrate the time America put aside its differences and came together
to reaffirm its independence a second time and rekindled the American
spirit of self reliance, innovation and creativity to usher in new era
of prosperity?
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3669
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the
``Harmonizing America's Energy, Economy, Environment, and
National Security Act of 2008''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--DOMESTIC ENERGY PRODUCTION
Subtitle A--Outer Continental Shelf
Sec. 101. Termination of prohibitions on expenditures for, and
withdrawals from, offshore and onshore leasing and other
limitations on energy production.
Sec. 102. Coordination with Secretary of Defense on leasing.
Sec. 103. Sharing of revenues.
Subtitle B--Leasing Program for Land Within Coastal Plain
Sec. 111. Definitions.
Sec. 112. Leasing program for land within the Coastal Plain.
Sec. 113. Lease sales.
Sec. 114. Grant of leases by the Secretary.
Sec. 115. Lease terms and conditions.
Sec. 116. Coastal plain environmental protection.
Sec. 117. Rights-of-way and easements across coastal plain.
Sec. 118. Conveyance.
Sec. 119. Local government impact aid and community service assistance.
Sec. 120. Allocation of revenues.
Subtitle C--Oil Shale
Sec. 131. Removal of prohibition on final regulations for commercial
leasing program for oil shale resources on public land.
TITLE II--ALTERNATIVE ENERGY AND CONSERVATION
Subtitle A--Conservation Reserve and Renewable Energy Reserve Accounts
Sec. 201. Conservation Reserve and Renewable Energy Reserve Accounts.
Subtitle B--Department of Defense Facilitation of Secure Domestic Fuel
Development
Sec. 211. Procurement and acquisition of alternative fuels.
TITLE I--DOMESTIC ENERGY PRODUCTION
Subtitle A--Outer Continental Shelf
SEC. 101. TERMINATION OF PROHIBITIONS ON EXPENDITURES FOR,
AND WITHDRAWALS FROM, OFFSHORE AND ONSHORE
LEASING AND OTHER LIMITATIONS ON ENERGY
PRODUCTION.
(a) Prohibitions on Expenditures.--Notwithstanding any
other provision of law, all provisions of Federal law that
prohibit the expenditure of appropriated funds to conduct
natural gas, oil, oil shale, and other energy production
leasing, preleasing, and related activities on Federal land
shall have no force or effect with respect to the activities.
(b) Revocation Withdrawals.--Notwithstanding any other
provision of law, all withdrawals of Federal submerged land
of the outer Continental Shelf from leasing (including
withdrawals by the President under section 12(a) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1341(a)), are revoked
and are no longer in force or effect with respect to the
leasing of areas for exploration for, and development and
production of, natural gas and oil.
(c) Gulf of Mexico Oil and Gas.--Section 104 of the Gulf of
Mexico Energy Security Act of 2006 (43 U.S.C. 1331 note;
Public Law 109-432) is repealed.
(d) Conforming Amendments.--
(1) Sections 104 and 105 of the Department of the Interior,
Environment, and Related Agencies Appropriations Act, 2008
(Public Law 110-161; 121 Stat. 2118) are repealed.
(2) Section 103(a) of the Gulf of Mexico Energy Security
Act of 2006 (43 U.S.C. 1331 note; Public Law 109-432) is
amended by striking ``Except as provided in section 104,
the'' and inserting ``The''.
SEC. 102. COORDINATION WITH SECRETARY OF DEFENSE ON LEASING.
The Outer Continental Shelf Lands Act is amended by
inserting after section 9 (43 U.S.C. 1338) the following:
``SEC. 10. COORDINATION WITH SECRETARY OF DEFENSE ON LEASING.
``(a) In General.--The Secretary shall consult with the
Secretary of Defense regarding military operations needs for
the outer Continental Shelf.
``(b) Conflicts.--
``(1) In general.--The Secretary shall work with the
Secretary of Defense to resolve any conflict that may arise
between operations described in subsection (a) and leasing
under this Act.
``(2) Unresolved issues.--If the Secretary and the
Secretary of Defense are unable to resolve any conflict
described in paragraph (1), any unresolved issue shall be
referred by the Secretaries to the President in a timely
fashion for immediate resolution.''.
SEC. 103. SHARING OF REVENUES.
(a) In General.--Section 8(g) of the Outer Continental
Shelf Lands Act (43 U.S.C. 1337(g)) is amended--
(1) in paragraph (2), by striking ``(2) Notwithstanding''
and inserting the following:
``(2) Disposition of revenues.--Except as provided in
paragraph (6) and notwithstanding'';
(2) by redesignating paragraphs (6) and (7) as paragraphs
(7) and (8), respectively; and
(3) by inserting after paragraph (5) the following:
``(6) Bonus bids and royalties under qualified leases.--
``(A) Definitions.--In this paragraph:
``(i) Adjacent state.--The term `adjacent State' means,
with respect to any program, plan, lease sale, leased tract,
or other activity proposed, conducted, or approved pursuant
to this Act, any State the laws of which are declared,
pursuant to section 4(a)(2), to be the law of the United
States for the portion of the outer Continental Shelf on
which the program, plan, lease sale, leased tract, or
activity applies or is, or is proposed to be, conducted.
``(ii) Adjacent zone.--The term `adjacent zone' means, with
respect to any program, plan, lease sale, leased tract, or
other activity proposed, conducted, or approved pursuant to
this Act, the portion of the outer Continental Shelf for
which the laws of an adjacent State are declared, pursuant to
section 4(a)(2), to be the law of the United States.
[[Page 23654]]
``(iii) Producing state.--The term `producing State' means
an adjacent State having an adjacent zone containing leased
tracts from which are derived bonus bids and royalties under
a lease under this Act.
``(iv) Qualified lease.--The term `qualified lease' means a
natural gas or oil lease made available under this Act
granted after the date of enactment of the Harmonizing
America's Energy, Economy, Environment, and National Security
Act of 2008, for an area that is available for leasing as a
result of enactment of section 101 of that Act.
``(v) State.--The term `State' includes--
``(I) the Commonwealth of Puerto Rico; and
``(II) any other territory or possession of the United
States.
``(B) New leases.--Of amounts received by the United States
as bonus bids, royalties, rentals, and other sums collected
under any qualified lease on submerged land made available
for leasing under this Act by the enactment of section 101 of
the Harmonizing America's Energy, Economy, Environment, and
National Security Act of 2008 that are located within the
seaward boundaries of a State established under section
4(a)(2)(A)--
``(i) 27 percent shall be paid to producing States with
respect to that submerged land;
``(ii) 25 percent shall be deposited in the Conservation
Reserve Account established by section 201(a)(1) of the
Harmonizing America's Energy, Economy, Environment, and
National Security Act of 2008;
``(iii) 25 percent shall be deposited in the Renewable
Energy Reserve Account established by section 201(a)(2) of
that Act;
``(iv) 20 percent shall be deposited in the general fund of
the Treasury of the United States for debt reduction; and
``(v) subject to the availability of appropriations, 3
percent may be available to the Secretary of Health and Human
Services for carrying out the low-income home energy
assistance program established under the Low-Income Home
Energy Assistance Act of 1981 (42 U.S.C. 8621 et seq.).
``(C) Leased tract that lies partially within the seaward
boundaries of a state.--In the case of a leased tract that
lies partially within the seaward boundaries of a State, the
amount of bonus bids and royalties from the tract that is
subject to subparagraph (B) with respect to the State shall
be a percentage of the total amounts of bonus bids and
royalties from the tract that is equivalent to the total
percentage of the surface acreage of the tract that lies
within the seaward boundaries.
``(D) Application.--This paragraph applies to bonus bids
and royalties received by the United States under qualified
leases after September 30, 2008.''.
(b) Establishment of State Seaward Boundaries.--Section
4(a)(2) of the Outer Continental Shelf Lands Act (43 U.S.C.
1333(a)(2)) is amended--
(1) by striking ``(2)(A) To'' and inserting the following:
``(2) Laws of adjacent states; international boundary
disputes.--
``(A) Laws of adjacent states.--
``(i) In general.--To''; and
(2) in subparagraph (A)--
(A) in the first sentence, by striking ``, and the
President'' and all that follows through the end of the
sentence and inserting a period;
(B) by inserting after clause (i) (as designated by
paragraph (1)) the following:
``(ii) Extended lines.--
``(I) In general.--Subject to subclauses (II) and (III),
the extended lines described in clause (i) shall be
considered to be indicated on the maps for each outer
Continental Shelf region entitled--
``(aa) `Alaska OCS Region State Adjacent Zone and OCS
Planning Areas';
``(bb) `Pacific OCS Region State Adjacent Zones and OCS
Planning Areas';
``(cc) `Gulf of Mexico OCS Region State Adjacent Zones and
OCS Planning Areas'; and
``(dd) `Atlantic OCS Region State Adjacent Zones and OCS
Planning Areas'.
``(II) Maps.--For the purpose of subclause (I), all of the
maps described in subclause (I) are dated September 2005 and
on file in the Office of the Director, Minerals Management
Service.
``(III) Gulf of mexico.--Subclause (I) shall not apply with
respect to the treatment under section 105 of the Gulf of
Mexico Energy Security Act of 2006 (43 U.S.C. 1331 note;
Public Law 109-432) of qualified outer Continental Shelf
revenues deposited and disbursed under section 105(a)(2) of
that Act.''; and
(C) by striking ``All of such applicable laws'' and
inserting the following:
``(iii) Administration; enforcement.--The applicable laws
described in subparagraph (A)''.
Subtitle B--Leasing Program for Land Within Coastal Plain
SEC. 111. DEFINITIONS.
In this subtitle:
(1) Coastal plain.--The term ``Coastal Plain'' means that
area identified as the ``1002 Coastal Plain Area'' on the
map.
(2) Federal agreement.--The term ``Federal Agreement''
means the Federal Agreement and Grant Right-of-Way for the
Trans-Alaska Pipeline issued on January 23, 1974, in
accordance with section 28 of the Mineral Leasing Act (30
U.S.C. 185) and the Trans-Alaska Pipeline Authorization Act
(43 U.S.C. 1651 et seq.).
(3) Final statement.--The term ``Final Statement'' means
the final legislative environmental impact statement on the
Coastal Plain, dated April 1987, and prepared pursuant to
section 1002 of the Alaska National Interest Lands
Conservation Act (16 U.S.C. 3142) and section 102(2)(C) of
the National Environmental Policy Act of 1969 (42 U.S.C.
4332(2)(C)).
(4) Map.--The term ``map'' means the map entitled ``Arctic
National Wildlife Refuge'', dated September 2005, and
prepared by the United States Geological Survey.
(5) Secretary.--The term ``Secretary'' means the Secretary
of the Interior (or the designee of the Secretary), acting
through the Director of the Bureau of Land Management in
consultation with the Director of the United States Fish and
Wildlife Service and in coordination with a State coordinator
appointed by the Governor of the State of Alaska.
SEC. 112. LEASING PROGRAM FOR LAND WITHIN THE COASTAL PLAIN.
(a) In General.--
(1) Authorization.--Congress authorizes the exploration,
leasing, development, production, and economically feasible
and prudent transportation of oil and gas in and from the
Coastal Plain.
(2) Actions.--The Secretary shall take such actions as are
necessary--
(A) to establish and implement, in accordance with this
subtitle, a competitive oil and gas leasing program that will
result in an environmentally sound program for the
exploration, development, and production of the oil and gas
resources of the Coastal Plain while taking into
consideration the interests and concerns of residents of the
Coastal Plain, which is the homeland of the Kaktovikmiut
Inupiat; and
(B) to administer this subtitle through regulations, lease
terms, conditions, restrictions, prohibitions, stipulations,
and other provisions that--
(i) ensure the oil and gas exploration, development, and
production activities on the Coastal Plain will result in no
significant adverse effect on fish and wildlife, their
habitat, subsistence resources, and the environment; and
(ii) require the application of the best commercially
available technology for oil and gas exploration,
development, and production to all exploration, development,
and production operations under this subtitle in a manner
that ensures the receipt of fair market value by the public
for the mineral resources to be leased.
(b) Repeal.--
(1) Repeal.--Section 1003 of the Alaska National Interest
Lands Conservation Act (16 U.S.C. 3143) is repealed.
(2) Conforming amendment.--The table of contents contained
in section 1 of that Act (16 U.S.C. 3101 note) is amended by
striking the item relating to section 1003.
(c) Compliance With Requirements Under Certain Other
Laws.--
(1) Compatibility.--For purposes of the National Wildlife
Refuge System Administration Act of 1966 (16 U.S.C. 668dd et
seq.)--
(A) the oil and gas pre-leasing and leasing program, and
activities authorized by this section in the Coastal Plain,
shall be considered to be compatible with the purposes for
which the Arctic National Wildlife Refuge was established;
and
(B) no further findings or decisions shall be required to
implement that program and those activities.
(2) Adequacy of the department of the interior's
legislative environmental impact statement.--The Final
Statement shall be considered to satisfy the requirements
under the National Environmental Policy Act of 1969 (42
U.S.C. 4321 et seq.) that apply with respect to pre-leasing
activities, including exploration programs and actions
authorized to be taken by the Secretary to develop and
promulgate the regulations for the establishment of a leasing
program authorized by this subtitle before the conduct of the
first lease sale.
(3) Compliance with nepa for other actions.--
(A) In general.--Before conducting the first lease sale
under this subtitle, the Secretary shall prepare an
environmental impact statement in accordance with the
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et
seq.) with respect to the actions authorized by this subtitle
that are not referred to in paragraph (2).
(B) Identification and analysis.--Notwithstanding any other
provision of law, in carrying out this paragraph, the
Secretary shall not be required--
(i) to identify nonleasing alternative courses of action;
or
(ii) to analyze the environmental effects of those courses
of action.
(C) Identification of preferred action.--Not later than 18
months after the date of enactment of this Act, the Secretary
shall--
(i) identify only a preferred action and a single leasing
alternative for the first lease sale authorized under this
subtitle; and
(ii) analyze the environmental effects and potential
mitigation measures for those 2 alternatives.
(D) Public comments.--In carrying out this paragraph, the
Secretary shall consider
[[Page 23655]]
only public comments that are filed not later than 20 days
after the date of publication of a draft environmental impact
statement.
(E) Effect of compliance.--Notwithstanding any other
provision of law, compliance with this paragraph shall be
considered to satisfy all requirements for the analysis and
consideration of the environmental effects of proposed
leasing under this subtitle.
(d) Relationship to State and Local Authority.--Nothing in
this subtitle expands or limits any State or local regulatory
authority.
(e) Special Areas.--
(1) Designation.--
(A) In general.--The Secretary, after consultation with the
State of Alaska, the North Slope Borough, Alaska, and the
City of Kaktovik, Alaska, may designate not more than 45,000
acres of the Coastal Plain as a special area if the Secretary
determines that the special area would be of such unique
character and interest as to require special management and
regulatory protection.
(B) Sadlerochit spring area.--The Secretary shall designate
as a special area in accordance with subparagraph (A) the
Sadlerochit Spring area, comprising approximately 4,000 acres
as depicted on the map.
(2) Management.--The Secretary shall manage each special
area designated under this subsection in a manner that--
(A) respects and protects the Native people of the area;
and
(B) preserves the unique and diverse character of the area,
including fish, wildlife, subsistence resources, and cultural
values of the area.
(3) Exclusion from leasing or surface occupancy.--
(A) In general.--The Secretary may exclude any special area
designated under this subsection from leasing.
(B) No surface occupancy.--If the Secretary leases all or a
portion of a special area for the purposes of oil and gas
exploration, development, production, and related activities,
there shall be no surface occupancy of the land comprising
the special area.
(4) Directional drilling.--Notwithstanding any other
provision of this subsection, the Secretary may lease all or
a portion of a special area under terms that permit the use
of horizontal drilling technology from sites on leases
located outside the special area.
(f) Limitation on Closed Areas.--The Secretary may not
close land within the Coastal Plain to oil and gas leasing or
to exploration, development, or production except in
accordance with this subtitle.
(g) Regulations.--
(1) In general.--Not later than 15 months after the date of
enactment of this Act, in consultation with appropriate
agencies of the State of Alaska, the North Slope Borough,
Alaska, and the City of Kaktovik, Alaska, the Secretary shall
issue such regulations as are necessary to carry out this
subtitle, including rules and regulations relating to
protection of the fish and wildlife, fish and wildlife
habitat, and subsistence resources of the Coastal Plain.
(2) Revision of regulations.--The Secretary may
periodically review and, as appropriate, revise the rules and
regulations issued under paragraph (1) to reflect any
significant scientific or engineering data that come to the
attention of the Secretary.
SEC. 113. LEASE SALES.
(a) In General.--Land may be leased pursuant to this
subtitle to any person qualified to obtain a lease for
deposits of oil and gas under the Mineral Leasing Act (30
U.S.C. 181 et seq.).
(b) Procedures.--The Secretary shall, by regulation,
establish procedures for--
(1) receipt and consideration of sealed nominations for any
area in the Coastal Plain for inclusion in, or exclusion (as
provided in subsection (c)) from, a lease sale;
(2) the holding of lease sales after that nomination
process; and
(3) public notice of and comment on designation of areas to
be included in, or excluded from, a lease sale.
(c) Lease Sale Bids.--Bidding for leases under this
subtitle shall be by sealed competitive cash bonus bids.
(d) Acreage Minimum in First Sale.--For the first lease
sale under this subtitle, the Secretary shall offer for lease
those tracts the Secretary considers to have the greatest
potential for the discovery of hydrocarbons, taking into
consideration nominations received pursuant to subsection
(b)(1), but in no case less than 200,000 acres.
(e) Timing of Lease Sales.--The Secretary shall--
(1) not later than 22 months after the date of enactment of
this Act, conduct the first lease sale under this subtitle;
(2) not later than September 30, 2012, conduct a second
lease sale under this subtitle; and
(3) conduct additional sales at appropriate intervals if
sufficient interest in exploration or development exists to
warrant the conduct of the additional sales.
SEC. 114. GRANT OF LEASES BY THE SECRETARY.
(a) In General.--Upon payment by a lessee of such bonus as
may be accepted by the Secretary, the Secretary may grant to
the highest responsible qualified bidder in a lease sale
conducted pursuant to section 113 a lease for any land on the
Coastal Plain.
(b) Subsequent Transfers.--
(1) In general.--No lease issued under this subtitle may be
sold, exchanged, assigned, sublet, or otherwise transferred
except with the approval of the Secretary.
(2) Condition for approval.--Before granting any approval
described in paragraph (1), the Secretary shall consult with
and give due consideration to the opinion of the Attorney
General.
SEC. 115. LEASE TERMS AND CONDITIONS.
(a) In General.--An oil or gas lease issued pursuant to
this subtitle shall--
(1) provide for the payment of a royalty of not less than
16\1/2\ percent of the amount or value of the production
removed or sold from the lease, as determined by the
Secretary in accordance with regulations applicable to other
Federal oil and gas leases;
(2) provide that the Secretary may close, on a seasonal
basis, such portions of the Coastal Plain to exploratory
drilling activities as are necessary to protect caribou
calving areas and other species of fish and wildlife;
(3) require that each lessee of land within the Coastal
Plain shall be fully responsible and liable for the
reclamation of land within the Coastal Plain and any other
Federal land that is adversely affected in connection with
exploration, development, production, or transportation
activities within the Coastal Plain conducted by the lessee
or by any of the subcontractors or agents of the lessee;
(4) provide that the lessee may not delegate or convey, by
contract or otherwise, that reclamation responsibility and
liability to another person without the express written
approval of the Secretary;
(5) provide that the standard of reclamation for land
required to be reclaimed under this subtitle shall be, to the
maximum extent practicable--
(A) a condition capable of supporting the uses that the
land was capable of supporting prior to any exploration,
development, or production activities; or
(B) upon application by the lessee, to a higher or better
standard, as approved by the Secretary;
(6) contain terms and conditions relating to protection of
fish and wildlife, fish and wildlife habitat, subsistence
resources, and the environment as required under section
112(a)(2);
(7) provide that each lessee, and each agent and contractor
of a lessee, use their best efforts to provide a fair share
of employment and contracting for Alaska Natives and Alaska
Native Corporations from throughout the State of Alaska, as
determined by the level of obligation previously agreed to in
the Federal Agreement; and
(8) contain such other provisions as the Secretary
determines to be necessary to ensure compliance with this
subtitle and regulations issued under this subtitle.
(b) Project Labor Agreements.--The Secretary, as a term and
condition of each lease under this subtitle, and in
recognizing the proprietary interest of the Federal
Government in labor stability and in the ability of
construction labor and management to meet the particular
needs and conditions of projects to be developed under the
leases issued pursuant to this subtitle (including the
special concerns of the parties to those leases), shall
require that each lessee, and each agent and contractor of a
lessee, under this subtitle negotiate to obtain a project
labor agreement for the employment of laborers and mechanics
on production, maintenance, and construction under the lease.
SEC. 116. COASTAL PLAIN ENVIRONMENTAL PROTECTION.
(a) No Significant Adverse Effect Standard to Govern
Authorized Coastal Plain Activities.--In accordance with
section 112, the Secretary shall administer this subtitle
through regulations, lease terms, conditions, restrictions,
prohibitions, stipulations, or other provisions that--
(1) ensure, to the maximum extent practicable, that oil and
gas exploration, development, and production activities on
the Coastal Plain will result in no significant adverse
effect on fish and wildlife, fish and wildlife habitat, and
the environment;
(2) require the application of the best commercially
available technology for oil and gas exploration,
development, and production on all new exploration,
development, and production operations; and
(3) ensure that the maximum surface acreage covered in
connection with the leasing program by production and support
facilities, including airstrips and any areas covered by
gravel berms or piers for support of pipelines, does not
exceed 2,000 acres on the Coastal Plain.
(b) Site-Specific Assessment and Mitigation.--The Secretary
shall require, with respect to any proposed drilling and
related activities on the Coastal Plain, that--
(1) a site-specific environmental analysis be made of the
probable effects, if any, that the drilling or related
activities will have on fish and wildlife, fish and wildlife
habitat, subsistence resources, subsistence uses, and the
environment;
(2) a plan be implemented to avoid, minimize, and mitigate
(in that order and to the maximum extent practicable) any
significant adverse effect identified under paragraph (1);
and
[[Page 23656]]
(3) the development of the plan occur after consultation
with--
(A) each agency having jurisdiction over matters mitigated
by the plan;
(B) the State of Alaska;
(C) North Slope Borough, Alaska; and
(D) the City of Kaktovik, Alaska.
(c) Regulations to Protect Coastal Plain Fish and Wildlife
Resources, Subsistence Users, and the Environment.--Before
implementing the leasing program authorized by this subtitle,
the Secretary shall prepare and issue regulations, lease
terms, conditions, restrictions, prohibitions, stipulations,
or other measures designed to ensure, to the maximum extent
practicable, that the activities carried out on the Coastal
Plain under this subtitle are conducted in a manner
consistent with the purposes and environmental requirements
of this subtitle.
(d) Compliance With Federal and State Environmental Laws
and Other Requirements.--The proposed regulations, lease
terms, conditions, restrictions, prohibitions, and
stipulations for the leasing program under this subtitle
shall require--
(1) compliance with all applicable provisions of Federal
and State environmental law (including regulations);
(2) implementation of and compliance with--
(A) standards that are at least as effective as the safety
and environmental mitigation measures, as described in items
1 through 29 on pages 167 through 169 of the Final Statement,
on the Coastal Plain;
(B) seasonal limitations on exploration, development, and
related activities, as necessary, to avoid significant
adverse effects during periods of concentrated fish and
wildlife breeding, denning, nesting, spawning, and migration;
(C) design safety and construction standards for all
pipelines and any access and service roads that minimize, to
the maximum extent practicable, adverse effects on--
(i) the passage of migratory species (such as caribou); and
(ii) the flow of surface water by requiring the use of
culverts, bridges, or other structural devices;
(D) prohibitions on general public access to, and use of,
all pipeline access and service roads;
(E) stringent reclamation and rehabilitation requirements
in accordance with this subtitle for the removal from the
Coastal Plain of all oil and gas development and production
facilities, structures, and equipment on completion of oil
and gas production operations, except in a case in which the
Secretary determines that those facilities, structures, or
equipment--
(i) would assist in the management of the Arctic National
Wildlife Refuge; and
(ii) are donated to the United States for that purpose;
(F) appropriate prohibitions or restrictions on--
(i) access by all modes of transportation;
(ii) sand and gravel extraction; and
(iii) use of explosives;
(G) reasonable stipulations for protection of cultural and
archaeological resources;
(H) measures to protect groundwater and surface water,
including--
(i) avoidance, to the maximum extent practicable, of
springs, streams, and river systems;
(ii) the protection of natural surface drainage patterns
and wetland and riparian habitats; and
(iii) the regulation of methods or techniques for
developing or transporting adequate supplies of water for
exploratory drilling; and
(I) research, monitoring, and reporting requirements;
(3) that exploration activities (except surface geological
studies) be limited to the period between approximately
November 1 and May 1 of each year and be supported, if
necessary, by ice roads, winter trails with adequate snow
cover, ice pads, ice airstrips, and air transport methods
(except that those exploration activities may be permitted at
other times if the Secretary determines that the exploration
will have no significant adverse effect on fish and wildlife,
fish and wildlife habitat, subsistence resources, and the
environment of the Coastal Plain);
(4) consolidation of facility siting;
(5) avoidance or reduction of air traffic-related
disturbance to fish and wildlife;
(6) treatment and disposal of hazardous and toxic wastes,
solid wastes, reserve pit fluids, drilling muds and cuttings,
and domestic wastewater, including, in accordance with
applicable Federal and State environmental laws (including
regulations)--
(A) preparation of an annual waste management report;
(B) development and implementation of a hazardous materials
tracking system; and
(C) prohibition on the use of chlorinated solvents;
(7) fuel storage and oil spill contingency planning;
(8) conduct of periodic field crew environmental briefings;
(9) avoidance of significant adverse effects on subsistence
hunting, fishing, and trapping;
(10) compliance with applicable air and water quality
standards;
(11) appropriate seasonal and safety zone designations
around well sites, within which subsistence hunting and
trapping shall be limited; and
(12) development and implementation of such other
protective environmental requirements, restrictions, terms,
or conditions as the Secretary, after consultation with the
State of Alaska, North Slope Borough, Alaska, and the City of
Kaktovik, Alaska, determines to be necessary.
(e) Considerations.--In preparing and issuing regulations,
lease terms, conditions, restrictions, prohibitions, or
stipulations under this section, the Secretary shall take
into consideration--
(1) the stipulations and conditions that govern the
National Petroleum Reserve-Alaska leasing program, as set
forth in the 1999 Northeast National Petroleum Reserve-Alaska
Final Integrated Activity Plan/Environmental Impact
Statement;
(2) the environmental protection standards that governed
the initial Coastal Plain seismic exploration program under
parts 37.31 through 37.33 of title 50, Code of Federal
Regulations (or successor regulations); and
(3) the land use stipulations for exploratory drilling on
the KIC-ASRC private land described in Appendix 2 of the
agreement between Arctic Slope Regional Corporation and the
United States dated August 9, 1983.
(f) Facility Consolidation Planning.--
(1) In general.--After providing for public notice and
comment, the Secretary shall prepare and periodically update
a plan to govern, guide, and direct the siting and
construction of facilities for the exploration, development,
production, and transportation of oil and gas resources from
the Coastal Plain.
(2) Objectives.--The objectives of the plan shall be--
(A) the avoidance of unnecessary duplication of facilities
and activities;
(B) the encouragement of consolidation of common facilities
and activities;
(C) the location or confinement of facilities and
activities to areas that will minimize impact on fish and
wildlife, fish and wildlife habitat, subsistence resources,
and the environment;
(D) the use of existing facilities, to the maximum extent
practicable; and
(E) the enhancement of compatibility between wildlife
values and development activities.
(g) Access to Public Land.--The Secretary shall--
(1) manage public land in the Coastal Plain in accordance
with subsections (a) and (b) of section 811 of the Alaska
National Interest Lands Conservation Act (16 U.S.C. 3121);
and
(2) ensure that local residents shall have reasonable
access to public land in the Coastal Plain for traditional
uses.
SEC. 117. RIGHTS-OF-WAY AND EASEMENTS ACROSS COASTAL PLAIN.
For purposes of section 1102(4)(A) of the Alaska National
Interest Lands Conservation Act (16 U.S.C. 3162(4)(A)), any
rights-of-way or easements across the Coastal Plain for the
exploration, development, production, or transportation of
oil and gas shall be considered to be established incident to
the management of the Coastal Plain under this section.
SEC. 118. CONVEYANCE.
Notwithstanding section 1302(h)(2) of the Alaska National
Interest Lands Conservation Act (16 U.S.C. 3192(h)(2)), to
remove any cloud on title to land, and to clarify land
ownership patterns in the Coastal Plain, the Secretary
shall--
(1) to the extent necessary to fulfill the entitlement of
the Kaktovik Inupiat Corporation under sections 12 and 14 of
the Alaska Native Claims Settlement Act (43 U.S.C. 1611,
1613), as determined by the Secretary, convey to that
Corporation the surface estate of the land described in
paragraph (1) of Public Land Order 6959, in accordance with
the terms and conditions of the agreement between the
Secretary, the United States Fish and Wildlife Service, the
Bureau of Land Management, and the Kaktovik Inupiat
Corporation, dated January 22, 1993; and
(2) convey to the Arctic Slope Regional Corporation the
remaining subsurface estate to which that Corporation is
entitled under the agreement between that corporation and the
United States, dated August 9, 1983.
SEC. 119. LOCAL GOVERNMENT IMPACT AID AND COMMUNITY SERVICE
ASSISTANCE.
(a) Establishment of Fund.--
(1) In general.--As a condition on the receipt of funds
under section 120(1), the State of Alaska shall establish in
the treasury of the State, and administer in accordance with
this section, a fund to be known as the ``Coastal Plain Local
Government Impact Aid Assistance Fund'' (referred to in this
section as the ``Fund'').
(2) Deposits.--Subject to paragraph (1), the Secretary of
the Treasury shall deposit into the Fund, $35,000,000 each
year from the amount available under section 120(1).
(3) Investment.--The Governor of the State of Alaska
(referred to in this section as the ``Governor'') shall
invest amounts in the Fund in interest-bearing securities of
the United States or the State of Alaska.
(b) Assistance.--The Governor, in cooperation with the
Mayor of the North Slope Borough, shall use amounts in the
Fund to provide assistance to North Slope Borough, Alaska,
the City of Kaktovik, Alaska, and any other borough,
municipal subdivision,
[[Page 23657]]
village, or other community in the State of Alaska that is
directly impacted by exploration for, or the production of,
oil or gas on the Coastal Plain under this subtitle, or any
Alaska Native Regional Corporation acting on behalf of the
villages and communities within its region whose land lies
along the right of way of the Trans Alaska Pipeline System,
as determined by the Governor.
(c) Application.--
(1) In general.--To receive assistance under subsection
(b), a community or Regional Corporation described in that
subsection shall submit to the Governor, or to the Mayor of
the North Slope Borough, an application in such time, in such
manner, and containing such information as the Governor may
require.
(2) Action by north slope borough.--The Mayor of the North
Slope Borough shall submit to the Governor each application
received under paragraph (1) as soon as practicable after the
date on which the application is received.
(3) Assistance of governor.--The Governor shall assist
communities in submitting applications under this subsection,
to the maximum extent practicable.
(d) Use of Funds.--A community or Regional Corporation that
receives funds under subsection (b) may use the funds--
(1) to plan for mitigation, implement a mitigation plan, or
maintain a mitigation project to address the potential
effects of oil and gas exploration and development on
environmental, social, cultural, recreational, and
subsistence resources of the community;
(2) to develop, carry out, and maintain--
(A) a project to provide new or expanded public facilities;
or
(B) services to address the needs and problems associated
with the effects described in paragraph (1), including
firefighting, police, water and waste treatment, first
responder, and other medical services;
(3) to compensate residents of the Coastal Plain for
significant damage to environmental, social, cultural,
recreational, or subsistence resources; and
(4) in the City of Kaktovik, Alaska--
(A) to develop a mechanism for providing members of the
Kaktovikmiut Inupiat community an opportunity to--
(i) monitor development on the Coastal Plain; and
(ii) provide information and recommendations to the
Governor based on traditional aboriginal knowledge of the
natural resources, flora, fauna, and ecological processes of
the Coastal Plain; and
(B) to establish a local coordination office, to be managed
by the Mayor of the North Slope Borough, in coordination with
the City of Kaktovik, Alaska--
(i) to coordinate with and advise developers on local
conditions and the history of areas affected by development;
(ii) to provide to the Committee on Resources of the House
of Representatives and the Committee on Energy and Natural
Resources of the Senate annual reports on the status of the
coordination between developers and communities affected by
development;
(iii) to collect from residents of the Coastal Plain
information regarding the impacts of development on fish,
wildlife, habitats, subsistence resources, and the
environment of the Coastal Plain; and
(iv) to ensure that the information collected under clause
(iii) is submitted to--
(I) developers; and
(II) any appropriate Federal agency.
SEC. 120. ALLOCATION OF REVENUES.
Notwithstanding the Mineral Leasing Act (30 U.S.C. 181 et
seq.) or any other provision of law, of the adjusted bonus,
rental, and royalty receipts from Federal oil and gas leasing
and operations authorized under this subtitle:
(1) 27 percent shall be disbursed to the State of Alaska.
(2) 25 percent shall be deposited in the Conservation
Reserve Account established by section 201(a)(1).
(3) 25 percent shall be deposited in the Renewable Energy
Reserve Account established by section 201(a)(2).
(4) 20 percent shall be deposited in the general fund of
the Treasury of the United States for debt reduction.
(5) 3 percent shall be available to the Secretary of Health
and Human Services for carrying out the low-income home
energy assistance program established under the Low-Income
Home Energy Assistance Act of 1981 (42 U.S.C. 8621 et seq.).
Subtitle C--Oil Shale
SEC. 131. REMOVAL OF PROHIBITION ON FINAL REGULATIONS FOR
COMMERCIAL LEASING PROGRAM FOR OIL SHALE
RESOURCES ON PUBLIC LAND.
Section 433 of the Department of the Interior, Environment,
and Related Agencies Appropriations Act, 2008 (Public Law
110-161; 121 Stat. 2152) is repealed.
TITLE II--ALTERNATIVE ENERGY AND CONSERVATION
Subtitle A--Conservation Reserve and Renewable Energy Reserve Accounts
SEC. 201. CONSERVATION RESERVE AND RENEWABLE ENERGY RESERVE
ACCOUNTS.
(a) In General.--For budgetary purposes, there are
established in the Treasury of the United States as separate
accounts--
(1) the Conservation Reserve Account, to offset the cost of
legislation enacted on or after the date of enactment of this
Act for conservation programs (including weatherization) and
conservation tax credits and deductions for energy efficiency
in the residential, commercial, industrial, and public
sectors (including conservation districts); and
(2) the Renewable Energy Reserve Account, to offset the
cost of legislation enacted on or after the date of enactment
of this Act--
(A) to accelerate the use of cleaner domestic energy
resources and alternative fuels;
(B) to promote the use of energy-efficient products and
practices; and
(C) to increase research, development, and deployment of
clean renewable energy and efficiency technologies and job
training programs for those purposes.
(b) Procedure for Adjustments.--
(1) Budget committee chairman.--After the reporting of a
bill or joint resolution, or the offering of an amendment or
the submission of a conference report for a bill or joint
resolution, that provides funding for the purposes described
in paragraph (1) or (2) of subsection (a) in excess of the
amount of the deposits under this Act or an amendment made by
this Act for those purposes for fiscal year 2009, the
chairman of the Committee on the Budget of the applicable
House of Congress shall make the adjustments described in
paragraph (2) for the amount of new budget authority and
outlays in that measure and the outlays resulting from the
budget authority.
(2) Matters to be adjusted.--The adjustments referred to in
paragraph (1) shall be made to--
(A) the discretionary spending limits, if any, specified in
the appropriate concurrent resolution on the budget;
(B) the allocations made pursuant to the appropriate
concurrent resolution on the budget pursuant to section
302(a) of the Congressional Budget Act of 1974 (2 U.S.C.
633(a)); and
(C) the budget aggregates contained in the appropriate
concurrent resolution on the budget as required by section
301(a) of the Congressional Budget Act of 1974 (2 U.S.C.
632(a)).
(3) Amounts of adjustments.--The adjustments referred to in
paragraphs (1) and (2) shall not exceed the receipts
estimated by the Congressional Budget Office that are
attributable to this Act and the amendments made by this Act
for the fiscal year in which the adjustments are made.
(c) Consultation.--Legislation shall not be treated as
legislation referred to in subsection (a) unless any
expenditure under the legislation for a purpose referred to
in that subsection may be made only after consultation with
(as appropriate)--
(1) the Administrator of the Environmental Protection
Agency;
(2) the Administrator of the National Oceanic and
Atmospheric Administration;
(3) the Secretary of the Army, acting through the Corps of
Engineers; and
(4) the Secretary of State.
(d) Maintenance of Effort by States.--The Secretary of the
Interior, the Secretary of Health and Human Services, the
Secretary of Energy, and any other Federal official with
authority to implement legislation referred to in subsection
(a) shall ensure that financial assistance provided to a
State under the legislation for any purpose with amounts made
available under this section or in any legislation with
respect to which subsection (a) applies supplements, and does
not replace, the amounts expended by the State for that
purpose before the date of enactment of this Act.
Subtitle B--Department of Defense Facilitation of Secure Domestic Fuel
Development
SEC. 211. PROCUREMENT AND ACQUISITION OF ALTERNATIVE FUELS.
Section 526 of the Energy Independence and Security Act of
2007 (42 U.S.C. 17142) is repealed.
______
By Mr. BUNNING:
S. 3670. A bill to regulate certain State and local taxation of
electronic commerce, and for other purposes; to the Committee on
Commerce, Science, and Transportation.
Mr. BUNNING. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3670
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. MINIMUM JURISDICTIONAL STANDARD FOR STATE AND
LOCAL TAXES ON ELECTRONIC COMMERCE.
(a) In General.--No taxing authority of a State shall have
power to require the collection and remittance of a State tax
by any person resulting from the electronic commerce of such
person unless such person has a physical presence in the
State during the taxable period with respect to which the tax
is imposed.
(b) Requirements for Physical Presence.--
(1) In general.--For purposes of subsection (a), a person
has a physical presence in a
[[Page 23658]]
State only if such person's electronic commerce in the State
includes any of the following during such person's taxable
year:
(A) Being an individual physically in the State, or
assigning one or more employees to be in the State.
(B) Using the services of an agent (excluding an employee)
to establish or maintain the electronic commerce in the
State, if such agent does not perform the same services in
the State for any other person during such taxable year.
(C) The leasing or owning of tangible personal property or
of real property in the State.
(2) De minimis physical presence.--For purposes of this
section, the term ``physical presence'' shall not include--
(A) entering into an agreement to share revenue generated
by an electronic commerce presence owned or maintained by a
person who is physically present in a State;
(B) presence in a State for less than 15 days in a taxable
year (or a greater number of days if provided by State law);
and
(C) presence in a State to conduct limited or transient
business activity.
(c) Taxable Periods Not Consisting of a Year.--If the
taxable period for which the tax is imposed is not a year,
then any requirements expressed in days for establishing
physical presence under this Act shall be adjusted pro rata
accordingly.
(d) Minimum Jurisdictional Standard.--This section provides
for minimum jurisdictional standards and shall not be
construed to modify, affect, or supersede the authority of a
State or any other provision of Federal law allowing persons
to conduct greater activities without the imposition of tax
jurisdiction.
(e) Exceptions.--
(1) Domestic business entities and individuals domiciled
in, or residents of, the state.--Subsection (a) shall not
apply with respect to--
(A) a person (other than an individual) that is
incorporated or formed under the laws of the State (or
domiciled in the State) in which the tax is imposed; or
(B) an individual who is domiciled in, or a resident of,
the State in which the tax is imposed.
(2) Preservation of authority.--This section shall not be
construed to modify, affect, or supersede the authority of a
State to bring an enforcement action against a person or
entity that may be engaged in an illegal activity, a sham
transaction, or any perceived or actual abuse in its
electronic commerce if such enforcement action does not
modify, affect, or supersede the operation of any provision
of this section or of any other Federal law.
(f) Rule of Construction.--This section shall not be
construed to modify, affect, or supersede the operation of
title I of the Act entitled ``An Act relating to the power of
the States to impose net income taxes on income derived from
interstate commerce, and authorizing studies by congressional
committees of matters pertaining thereto'', approved
September 14, 1959 (15 U.S.C. 381 et seq.).
(g) Definitions, etc.--For purposes of this section:
(1) Electronic commerce.--The term ``electronic commerce''
has the meaning given that term in section 1105(3) of the
Internet Tax Freedom Act (47 U.S.C. 151 note).
(2) Person.--The term ``person'' has the meaning given such
term by section 1 of title 1 of the United States Code.
(3) State.--The term ``State'' means any of the several
States, the District of Columbia, or any territory or
possession of the United States, or any political subdivision
of any of the foregoing.
(4) Tangible personal property.--For purposes of subsection
(b)(1)(C), the leasing or owning of tangible personal
property does not include the leasing or licensing of
computer software.
(h) Effective Date.--This section shall apply with respect
to taxable periods beginning on or after January 1, 2009.
______
By Mrs. FEINSTEIN:
S. 3671. A bill to amend the Commodity Exchange Act to require the
Commodity Futures Trading Commission to develop and impose aggregate
position limits on certain large over-the-counter transactions and
classes of large over-the-counter transactions; to the Committee on
Agriculture, Nutrition, and Forestry.
Mrs. FEINSTEIN. Mr. President, I rise to introduce the Over-the-
Counter Swaps Speculation Limit Act, a bill to establish workable
speculative position limits that apply to both bilateral over-the-
counter swaps transactions and on-exchange transactions.
The Over-the-Counter Swaps Speculation Limit Act would close the
``over-the-counter swaps loophole'' once and for all by requiring the
Commodity Futures Trading Commission--or CFTC--to apply the position
limit system to bilateral swaps, not just the on-exchange transactions
that are limited today.
Let me explain what the bill would do:
CFTC would enforce ``aggregate'' position limits so that a trader's
positions on and off exchange would be combined. Swaps would no longer
be exempt from position limits.
CFTC would be allowed to grant hedge exemptions for bone fide
hedging. This exemption would be limited to trading that hedges against
price risk exposure related to physical transactions in that energy
commodity.
Neither institutional investors hedging against inflation, nor swaps
dealers hedging their secret dealings would qualify for a hedge
exemption.
The bill would give CFTC the power to issue civil fines to enforce
position limits when unwinding a speculative position would be
disruptive to the marketplace.
This legislation is the missing piece to otherwise comprehensive
anti-speculation legislation debated in the Senate in July and adopted
by the House of Representatives in September.
Both of the House and Senate bills included vital provisions to
protect our markets, including provisions to close the London Loophole
by imposing speculation position limits on trading conducted on Foreign
Boards of Trade.
It would grant CFTC the authority to collect data and monitor trading
in Over-the-Counter Swaps markets, shining the bright light of
oversight onto a previously un-watched market.
It would improve the data collection systems at CFTC to distinguish
between swaps dealers, institutional investors, and genuine
speculators;
It would assure no true speculator is exempted from speculative
position limits; and increase CFTC's staffing levels.
Reacting to congressional pressure, the CFTC took many of the steps
through administrative action that our bills in Congress would have
required.
CFTC largely closed the London Loophole and began monitoring London
trading of American crude oil.
CFTC began collecting detailed data on OTC swaps trading, especially
by swaps dealers and institutional index traders, and it began
monitoring these markets.
CFTC reclassified a major swaps dealer as a speculator and proposed a
rulemaking to revise its system for granting speculative limit
exemptions.
This is true progress, but the swaps loophole--exempting voice
brokered bilateral swaps from the speculative position limit system--
remains in place. Traders are able to hold positions far above
speculative position limits simply by executing their trades through a
voice broker.
Until this summer, the Federal Government knew very little about OTC
swaps, which have been exempt from CFTC oversight since 1993. But
thanks to CFTC's increased oversight this summer, published in its
September 2008 ``Staff Report on Commodity Swap Dealers and Index
Traders,'' we know that traders do in fact use these swaps markets to
hold positions above the speculative position limits on regulated
exchanges.
The CFTC report found that on a single day in June there were:
``18 noncommercial traders (speculators) in 13 markets who appeared
to have an aggregate position . . . that would have been above the
speculative limit or an exchange accountability level if all the
positions were on-exchange.''
CFTC discovered that a few traders held positions that would have
``significantly exceeded'' an aggregate position limit.
What is the purpose of speculative position limits if traders know
they can buy the equivalent product in unlimited quantities from a
voice broker?
The Over-the-Counter Swaps Speculation Limit Act puts an end to this
flawed system by instructing CFTC to establish a system of aggregate
position limits. As the staff report demonstrated, CFTC knows how to
calculate such limits.
I believe this legislation avoids the pitfalls of previous efforts in
the 110th Congress to limit speculative positions in swaps.
It is simple, granting CFTC the broad mandate to impose aggregate
position limits across positions held on registered entities, foreign
boards of
[[Page 23659]]
trade, and OTC markets that impact the price discovery function of a
regulated market. It grants the regulator proper discretion to
determine which contracts are functionally equivalent and what the
limits should be.
It applies speculative position limits only to swaps that impact the
price discovery function on regulated markets. By focusing CFTC efforts
only on the major, standardized swaps contracts, the bill maintains
legal certainty for unique financing agreements and other private
bilateral transactions.
The bill also prevents speculators from migrating to less regulated
contracts. CFTC will only be allowed to exempt contracts from position
limits after it determines that the contract is not functioning as a
haven from regulation. CFTC must impose speculative position limits on
any contract that: is highly standardized; settles on the price of a
contracted traded in a regulated marketplace; has its prices widely
published and referenced; or traded in significant volumes.
Finally, the legislation addresses CFTC staff concerns that enforcing
position limits on bilateral swaps contracts would be too cumbersome.
In recent briefings, CFTC staff argued that the primary reason CFTC was
not calling for speculative position limits on swaps is that position
limits on swaps would force parties to void existing contracts, which
harms the counterparty as much as the trader who is over their limit.
Regulators should not force a trader to break a contract if such
action would punish the counterparties as well as the speculator. To
address this, this legislation gives CFTC the power to enforce position
limits with fines instead of forcing a trader to unwind a position.
Over the past 6 months, OTC swaps markets have been exposed, and it
has become increasingly apparent that speculative position limits are
both appropriate and feasible in order to protect regulated markets
from manipulation and excessive speculation.
The regulated and unregulated energy markets are fully integrated.
With traders moving back and forth freely, it is no longer reasonable
to believe that bad behavior in swaps can be isolated.
A manipulated swaps market would likely impact the price discovery
function of a futures market, and in turn affect consumer prices.
If we want fair play in the energy markets, we cannot continue to
instruct the CFTC to swallow its whistle when it sees violations at the
Swaps' end of the court.
We need to allow CFTC to call foul when it sees excessive
speculation, whether on an exchange or in a voice brokered swaps
market.
The Over-the-Counter Swaps Speculation Limit Act would give the CFTC
back its whistle. It would allow the Commission to use the speculative
position limit system in existence since the 1930s--to reel in
excessive speculation in American energy markets.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3671
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Over-the-Counter Swaps
Speculation Limit Act''.
SEC. 2. AGGREGATE POSITION LIMITS.
Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is
amended by adding at the end the following:
``(j) Aggregate Position Limits.--
``(1) Definition of bona fide hedging transaction.--In this
subsection:
``(A) In general.--The term `bona fide hedging transaction'
means a transaction that--
``(i) is a substitute for a transaction to be made or a
position to be taken at a later time in a physical marketing
channel;
``(ii) is economically appropriate for the reduction of
risks in the conduct and management of a commercial
enterprise; and
``(iii) arises from a potential change in the value of--
``(I) assets that a person owns, produces, manufactures,
possesses, or merchandises (or anticipates owning, producing,
manufacturing, possessing, or merchandising);
``(II) liabilities that a person incurs or anticipates
incurring; or
``(III) services that a person provides or purchases (or
anticipates providing or purchasing).
``(B) Exclusion.--The term `bona fide hedging transaction'
does not include a transaction entered into on a designated
contract market for the purpose of offsetting a financial
risk arising from an over-the-counter commodity derivative.
``(2) Aggregate position limits.--
``(A) Development; imposition.--Notwithstanding any other
provision of this Act, in accordance with subparagraph (B),
to reduce the potential threat of market manipulation,
excessive speculation, or congestion in any contract listed
for trading on a registered entity or a contract that the
Commission has determined to provide a price discovery role,
the Commission shall impose aggregate position limits on
positions held on registered entities, foreign boards of
trade, and each large over-the-counter transaction or class
of large over-the-counter transactions that the Commission
determines to be appropriate to assist the Commission in
protecting the price discovery function of contracts under
the jurisdiction of the Commission.
``(B) Requirements for development and imposition of
aggregate position limits.--
``(i) Evaluation system.--In developing aggregate position
limits under subparagraph (A), the Commission shall establish
a system for evaluating the degree to which--
``(I) each large over-the-counter transaction and class of
large over-the-counter transactions are equivalent to
positions in contracts on registered entities; and
``(II) contracts on registered entities are equivalent to
contracts on other registered entities.
``(ii) Maximum level of aggregate position limits.--In
developing aggregate position limits under subparagraph (A),
the Commission shall set the aggregate position limits at the
minimum level practicable to ensure sufficient market
liquidity for the conduct of bona fide hedging transactions.
``(C) Consideration of factors for determination.--
``(i) In general.--In making a determination under
subparagraph (A) with respect to the imposition of aggregate
position limits on appropriate large over-the-counter
transactions and classes of large over-the-counter
transactions, the Commission may determine not to impose
aggregate position limits on any large over-the-counter
transaction or class of large over-the-counter transactions
if the Commission determines that the large over-the-counter
transaction or class of large over-the-counter transactions
does not meet any of the factors described in clause (ii).
``(ii) Factors.--The factors described in clause (i)
include--
``(I) whether a standardized agreement is used to execute
the large over-the-counter transaction or class of large
over-the-counter transactions;
``(II) whether the large over-the-counter transaction or
class of large over-the-counter transactions settles against
any price (including the daily or final settlement price) of
1 or more contracts listed for trading on a registered
entity;
``(III) whether the price of the large over-the-counter
transaction or class of large over-the-counter transactions
is reported to a third party, published, or otherwise
disseminated;
``(IV) whether the price of the large over-the-counter
transaction or class of large over-the-counter transactions
is referenced in any other transaction;
``(V) whether there is a significant volume of the large
over-the-counter transaction or class of large over-the-
counter transactions; and
``(VI) any other factor that the Commission determines to
be appropriate.
``(D) Exemption for bona fide hedging transactions.--The
Commission may exempt any large over-the-counter transaction
or class of large over-the-counter transactions from any
aggregate position limit developed and imposed by the
Commission under subparagraph (A) if the Commission
determines that the large over-the-counter transaction or
class of large over-the-counter transactions is a bona fide
hedging transaction.
``(E) Net sum of positions.--The aggregate position limits
developed and imposed by the Commission under subparagraph
(A) shall apply to the net sum of the like positions held by
a person on or in--
``(i) registered entities;
``(ii) foreign boards of trade; and
``(iii) over-the-counter commodity derivatives.
``(F) Enforcement.--
``(i) In general.--Subject to clause (ii), in enforcing
each aggregate position limit developed and imposed by the
Commission under subparagraph (A), the Commission may order a
person to reduce any position of the person.
``(ii) Maintenance of position; civil penalty.--
``(I) Maintenance of position.--If the Commission
determines that the reduction of a position of a person under
clause (i) would be disruptive to the price discovery
function, the Commission may allow the person to maintain the
position.
[[Page 23660]]
``(II) Civil penalty.--The Commission shall impose on the
person described in subclause (I) a civil penalty in an
amount not greater than--
``(aa) $1,000,000 for each violation committed by the
person; or
``(bb) with respect to each violation committed by the
person, the market value of the position in excess of the
appropriate aggregate position limit.
``(iii) Effect of violation.--A violation of an aggregate
position limit developed and imposed by the Commission under
subparagraph (A) shall be determined to be a violation of
this Act.''.
______
By Mrs. CLINTON:
S. 3674. A bill to amend the Public Health Service Act to establish a
Wellness Trust; to the Committee on Health, Education, Labor, and
Pensions.
Mrs. CLINTON. Mr. President, reforming the healthcare system is a top
priority for me. I have been on the frontlines in the fight for
healthcare for every single American for as long as I have been in
public service. And every passing day, and year, the task becomes both
more urgent and more difficult--success more expensive and failure more
costly.
The United States spent about $2.1 trillion on healthcare in 2006,
twice what we spent 10 years ago, and half of what we're projected to
spend 10 years from now. Preventable and chronic diseases are this
century's epidemic. The number of people with chronic conditions is
rapidly increasing and it is estimated that if we do not intervene now,
by 2025 nearly half of the population will suffer from at least one
chronic disease.
The wellness gap also affects health care costs. About 78 percent of
all health spending in the United States is attributable to chronic
illness, much of which is preventable. Chronic diseases cost the United
States an additional $1 trillion each year in lost productivity, and
are a major contributing factor to the overall poor health that is
placing the Nation's economic security and competitiveness in jeopardy.
Unlike some health care challenges, proven preventive services and
programs exist. If effective risk reduction were implemented and
sustained, by 2015 the death rate due to cancer could drop by 29
percent. Improved blood sugar control for people with diabetes could
reduce the risk for eye disease, kidney disease, and nerve disease by
40 percent. Similarly, blood pressure control could reduce the risk for
heart disease and stroke by 33 to 50 percent. Yet, only half of
recommended clinical preventive services are provided to adults. About
20 percent of children do not receive all recommended immunizations,
with higher rates in certain areas. Nearly 70 percent of people with
high blood pressure do not now control it. And racial disparities in
the use of prevention exist.
The country faces low use of preventive services because of the low
value placed on prevention, a delivery system bent toward fixing rather
than preventing problems, and financial disincentives for prevention.
Insurers have little incentive to invest in preventive services today
that will benefit other insurers tomorrow. This is especially true for
those preventive services that reduce chronic diseases that develop
over a period of several years or decades. The costs of prevention are
incurred immediately but most of its benefits are realized later, often
by Medicare. The United States spends only an estimated 1 to 3 percent
of national health expenditures on preventive healthcare services and
health promotion.
In addition, the workforce to deliver prevention is also
insufficient. The supply of providers who are trained to emphasize
prevention is shrinking. Between 1997 and 2005, the number of medical
school graduates entering family practice residencies dropped by 50
percent. There is an acute shortage of community health workers.
Between 25 and 50 percent of the existing Federal, State and local
public health workforce is eligible for retirement in the next 5 years.
Today, more than 75 percent of the existing public health workforce has
no formal public health or prevention training. There is no national,
uniform credentialing system for public health or prevention workers
that would ensure that these workers are trained in the basics of
preventive care.
A system that promoted full use of high-priority prevention could
save lives and reduce costs. For example, complete, routine childhood
vaccination could save up to $40 billion in direct and societal costs
over time. Promoting screenings and behavioral modifications in the
workplace can lower absenteeism and, in most cases, health costs to
firms. Preventive health care services could reduce government spending
on health care. If all seniors recommended to received a flu vaccine
did, health costs could be reduced by nearly $1 billion per year. Over
25 years, Medicare could save an estimated $890 billion from effective
control of hypertension, and $1 trillion from returning to levels of
obesity observed in the 1980s.
So today, I am pleased to introduce The 21st Century Wellness Trust
Act. This legislation is a critical part of the broader effort we will
undertake next Congress to cover every single American and bring
reforms to our delivery system that make it more efficient and improve
health outcomes.
The 21st Century Wellness Trust Act would create a Wellness Trust at
the Centers for Disease Control and Prevention at the Department of
Health and Human Services to refocus the efforts of our healthcare
system on prevention and wellness. Through the Trust Fund Board, the
Wellness Trust will become the primary payer for priority prevention
services, as well as ensure an adequate and appropriately trained and
credentialed prevention health workforce. The Trust will also serve as
a central source of prevention information and ensure the inclusion of
prevention and wellness in the development of a nationwide,
interoperable health IT infrastructure.
We cannot afford to wait any longer and I am proud to introduce The
21st Century Wellness Trust Act which will be an important part of the
solution. We must undertake reforms that move us from a system of
sickness to a system of wellness. From a system that is tilted towards
institutional and emergency care to one that not only covers everyone,
but is designed to promote prevention of disease and wellness.
______
By Mr. KERRY:
S. 3675. A bill to amend the Internal Revenue Code of 1986 to provide
for the treatment of certain excessive employee remuneration, and for
other purposes; to the Committee on Finance.
Mr. KERRY. Mr. President, today I am introducing the Compensation
Fairness Act of 2008 to tighten the rules for the amount of
compensation that is deductible as an ordinary and necessary business
expense. The recent financial crisis has brought the issue of executive
compensation to the forefront.
We have all read about the outrageous salaries that many of the chief
executive officers of troubled companies have earned over the past few
years. Some have increased their pay by increasing the risks their
companies take. According to Equilar, a compensation research firm, the
CEOs of the 10 largest financial services firms in a survey of 200
companies with revenues of at least $6.5 billion were awarded a
combined total of $320 million last year, even though the firms
reported mortgage-related losses that totaled $55 billion and that
wiped out more than $200 billion in shareholder value. That is
unacceptable.
It is not just the financial industry where executive pay has become
excessive. For 2006, the CEOs of large U.S. companies averaged $10.8
million in total compensation, more than 364 times the pay of the
average U.S. worker. We can learn from what led us to the current
situation and one way to make CEOs more accountable is to limit the
taxpayer subsidy for executive compensation.
I am pleased that the bailout legislation places limits on the
executive compensation of the firms that participate in the Treasury
program. I commend Chairmen Dodd and Baucus for their efforts for to
place limits on executive compensation part of the solution. However, I
believe that executive compensation for all public companies should be
reexamined.
[[Page 23661]]
Under current law, the allowable deduction for the compensation of
the top five highly paid individuals, including the CEO and the chief
financial officer, CFO, is limited to $1 million per year. This
limitation does not include commissions and performance-based pay. I am
concerned that these exceptions have weakened the effectiveness of the
limitation and encourage performance-based pay arrangements which could
cause executives to manipulate earnings.
The Compensation Fairness Act of 2008 would make several changes to
the limitation on deduction for compensation. It would repeal the
exceptions for commission and performance-based pay. Under current law,
an employee that is covered by the limitation has to be an employee the
last day of the year. The legislation would change this to make a
covered employee one who is employed at any time during the year. This
legislation would retain the $1 million limitation and index it for
inflation.
The Compensation Fairness Act of 2008 would not limit the amount of
salary an executive can receive, but it would just limit the tax
subsidy. Taxpayers should not have to bear the cost of excessive
compensation. Warren Buffett, one of the most successful businessmen of
all time, has annual salary of $100,000.
Limiting the deduction of executive compensation is just one part of
addressing compensation. Earlier this Congress, the Senate passed
legislation which would limit the amount of compensation that can be
deferred to $1 million. Senator Obama has introduced legislation that I
cosponsored and the House has passed which would require annual
shareholder approval of a public company's executive compensation plan.
Once we address the current crisis, we need to have a serious debate
on executive compensation and the deductibility of compensation should
be part of the conversation. I urge my colleagues to consider changing
the current tax treatment of compensation.
______
By Ms. SNOWE (for herself and Mrs. Feinstein):
S. 3677. A bill to establish a Special Joint Task Force on Financial
Crimes; to the Committee on the Judiciary.
Ms. SNOWE. Mr. President, I rise in support of legislation that I am
introducing today to make sure that those responsible for the financial
meltdown of recent days are brought to justice. Joining me on the bill
is my distinguished colleague, Senator Feinstein.
While I congratulate the congressional leadership, especially
Chairmen Dodd and Frank, and Senators Reid, McConnell, and Gregg, in
crafting the Emergency Economic Stabilization Act of 2008, one issue
continues to deeply disturb me and many of my constituents.
Specifically, I refer to accountability and the importance of bringing
criminals to justice.
In my view, today's economic turmoil did not happen by pure chance,
and I am troubled that certain greedy individuals may have crossed the
line into criminal activity.
Clearly, no one should reap rewards from this colossal failure, and
those responsible on Wall Street should follow the Enron criminals
straight to jail. The pursuit and prosecution of those liable for this
meltdown must receive the highest possible level of attention, and this
legislation dedicates a Special Task Force on Financial Crimes within
the Justice Department whose sole mission is to ferret out those
directly involved in engineering this catastrophe.
The congressional pursuit of answers--through hearings that Senator
Dodd has indicated he will hold--should occur in tandem with the legal
investigation and prosecution of those responsible for this debacle.
Both must receive the same rigorous attention applied to this rescue
package--and not be subsumed by the routine of the day-to-day
legislative and criminal investigation process moving forward.
______
By Mrs. BOXER:
S. 3678. A bill to promote freedom, human rights, and the rule of law
in Vietnam; to the Committee on Foreign Relations.
Mrs. BOXER. Mr. President, I rise today to introduce an important
piece of legislation--the Vietnam Human Rights Act.
Over the last several sessions of Congress, legislation addressing
the human rights situation in Vietnam has been repeatedly introduced
but has never been enacted into law.
Like many of my Senate colleagues, I had hoped that strengthening our
relationship with Vietnam on the trade and economic front and
supporting Vietnam's integration into the international community would
dramatically improve Vietnam's human rights record.
But that has not turned out to be the case.
The United States has removed Vietnam from its list of Countries of
Particular Concern, granted Vietnam permanent normalized trade
relations, and supported Vietnam's bid to join the World Trade
Organization, yet Vietnam continues to arrest its citizens for their
peaceful advocacy of political views.
It also continues to strictly restrict religious freedom, to harass
and detain labor activists, and to refuse its citizens the basic rights
of freedom of association, assembly, and expression.
Just last year, Vietnam carried out one of its harshest crackdowns in
20 years against peaceful protestors calling for political change.
The crackdown, which continued through mid-2007, led to the arrest of
hundreds of individuals, including Father Nguyen Van Ly, who was
sentenced to 8 years in prison.
This crackdown happened shortly before the visit of Vietnamese
President Nguyen Minh Triet to the United States last June.
At the end of 2007, the United States Commission on International
Religious Freedom summed up Vietnam's recent behavior this way:
Vietnam's overall human rights record remains very poor and
deteriorated in the last year . . . Dozens of legal and
political reform advocates, free speech activists, labor
unionists, and independent religious leaders and religious
freedom advocates have been arrested, placed under home
detention or surveillance, threatened, intimidated, and
harassed.
Now we are witnessing yet another crackdown--this time on Catholic
Church members in Hanoi who have been holding prayer vigils to demand
the return of properties confiscated after the Communist government
took power in the 1950s.
The Vietnamese government has responded to these protests through
intimidation, violence, and arrest.
Just last week, Ben Stocking, the Bureau Chief for the Associated
Press in Hanoi, was beaten by Vietnamese security forces for
photographing one such vigil. It is time for such behavior to stop.
The Boxer bill seeks to improve human rights in Vietnam by shifting
the focus of U.S. non-humanitarian foreign aid to a comprehensive
approach that does more to address human rights.
The bill specifically requires that any spending increase for U.S.
non-humanitarian development, economic, trade, and security assistance
to Vietnam be matched by additional funding for programs focusing on
human rights, the rule of law, and democracy promotion.
To date, the majority of non-humanitarian U.S. assistance programs to
Vietnam have focused on business, trade, and security, and have not
effectively addressed human rights abuses.
In addition, the bill outlines objectives for U.S. diplomacy with
Vietnam on human rights related issues and encourages Vietnam to
release its religious and political prisoners.
The Boxer bill also prohibits Vietnam from having access to the U.S.
Generalized System of Preferences, GSP, program until Vietnam improves
its labor standards. The GSP program allows developing countries to
import certain items into the U.S. duty-free.
While the 110th Congress will shortly come to an end, I wanted to
introduce this legislation as a signal to the Vietnamese government
that its record on human rights and recent behavior has not gone
unnoticed. I intend to reintroduce this legislation very early in the
111th Congress.
[[Page 23662]]
Let me be clear. I support a strong bilateral relationship between
Vietnam and the United States. But the Vietnamese government must
dramatically improve its human rights record in order for our
relationship to grow.
____________________
SUBMITTED RESOLUTIONS
______
SENATE RESOLUTION 701--HONORING THE LIFE OF MICHAEL P. SMITH
Ms. LANDRIEU submitted the following resolution; which was referred
to the Committee on the Judiciary:
S. Res. 701
Whereas Michael P. Smith was an award-winning photographer
nationally recognized for his work over 4 decades documenting
the music, culture, and folklife of New Orleans and the State
of Louisiana;
Whereas Michael P. Smith greatly influenced the
understanding of New Orleans and Louisiana of people around
the world;
Whereas Michael P. Smith's work captured and made
accessible the environment, social structures, and
neighborhoods that both create and sustain the musical
traditions of New Orleans;
Whereas Michael P. Smith was born in Metairie, Louisiana,
the son of a member of the Rex organization and the Boston
Club, was a star athlete, and graduated from Metairie Park
Country Day School and Tulane University;
Whereas Michael P. Smith was the only person to photograph
at every New Orleans Jazz & Heritage Festival since the
festival began in 1970 until his retirement in 2004, when he
was honored with a major grandstand exhibition and photo
kiosks placed around the fairgrounds at the festival;
Whereas Michael P. Smith received 2 Photographer's
Fellowships from the National Endowment for the Arts early in
his career and his prints have toured worldwide through the
United States Information Agency (USIA);
Whereas Michael P. Smith's work has been presented at the
National Museum of American History, the International Center
for Photography in New York, and the LeRoy Neiman Gallery at
Columbia University, as well as numerous other museums,
galleries, and jazz festivals in America and Europe;
Whereas Michael P. Smith's work is part of the permanent
collections of the National Museum of American History in
Washington, DC, the Metropolitan Museum of Art in New York,
the Bibliotheque Nationale in Paris, the Louisiana State
Museum, the Ogden Museum of Southern Art, and the New Orleans
Museum of Art;
Whereas Michael P. Smith's work is represented in 5
photography books including ``Spirit World: Pattern in the
Expressive Folk Culture of African American New Orleans'',
``A Joyful Noise: A Celebration of New Orleans Music'', ``New
Orleans Jazz Fest: A Pictorial History'', ``Jazz Fest
Memories'', and ``Mardi Gras Indians'', which is a visual and
sociological history of the unique masking and musical
traditions still alive in the older Black neighborhoods of
New Orleans;
Whereas Michael P. Smith's photographs grace the covers of
many compact discs and record albums, illustrate numerous
books and magazine articles published in America and Europe,
and are in continual demand for documentary films produced at
home and abroad;
Whereas Michael P. Smith won numerous awards for his work,
including the 2002 Lifetime Achievement Award from the
Louisiana Endowment for the Humanities, the (New Orleans)
Mayor's Arts Award, the Clarence John Laughlin Lifetime
Achievement Award from the New Orleans chapter of the
American Society of Magazine Photographers, and the Artist
Recognition Award from the New Orleans Museum of Arts's
Delgado Society;
Whereas Michael P. Smith was an original owner and a
founder of Tipitina's, the iconic club that has featured, and
continues to feature, the best and brightest of New Orleans
music; and
Whereas Michael P. Smith is survived by a companion, Karen
Louise Snyder, 2 daughters, Jan Lamberton Smith of Quail
Springs, California, and Leslie Blackshear Smith of New
Orleans, a brother, Joseph Byrd Hatchitt Smith of Port
Angeles, Washington, and 2 grandchildren: Now, therefore, be
it
Resolved, That the Senate--
(1) honors the life of Michael P. Smith;
(2) recognizes Michael P. Smith for his invaluable
contributions as a cultural archivist of New Orleans and
Louisiana history and culture;
(3) recommits itself to ensuring that artists such as
Michael P. Smith receive recognition for their creative and
cultural endeavors; and
(4) extends condolences to his family on the death of this
talented and beloved man.
____________________
SENATE CONCURRENT RESOLUTION 105--DIRECTING THE CLERK OF THE HOUSE OF
REPRESENTATIVES TO CORRECT THE ENROLLMENT OF H.R. 6063
Mr. NELSON of Florida submitted the following concurrent resolution;
which was considered and agreed to:
S. Con. Res. 105
Resolved by the Senate (the House of Representatives
concurring), That in the enrollment of the bill H.R. 6063, an
Act to authorize the programs of the National Aeronautics and
Space Administration, and for other purposes, the Clerk of
the House of Representatives shall make the following
corrections:
In section 601(b)(2)(A)(iii) of the bill, strike
``Orbiter''.
In section 611(d)(1) of the bill, strike ``first
President'' and insert ``President''.
In section 611(e)(3) of the bill, strike ``correctly'' and
insert ``currently''.
In section 611(e)(7) of the bill, strike ``extention'' and
insert ``extension''.
In section 612 of the bill, strike ``operations'' and
insert ``operational''.
In section 1119 of the bill, strike ``The Report'' and
insert ``The report''.
____________________
AMENDMENTS SUBMITTED AND PROPOSED
SA 5683. Mr. BINGAMAN (for Mr. Dorgan (for himself, Mr.
Bingaman, Mr. Akaka, Mr. Harkin, Mr. Feingold, Mrs. Boxer,
Mr. Byrd, Mr. Sanders, and Mrs. Feinstein)) proposed an
amendment to the bill H.R. 7081, to approve the United
States-India Agreement for Cooperation on Peaceful Uses of
Nuclear Energy, and for other purposes.
SA 5684. Mr. DODD (for Mr. Pryor) proposed an amendment to
the bill S. 602, to develop the next generation of parental
control technology.
SA 5685. Mr. DODD proposed an amendment to the bill H.R.
1424, of 1974, section 2705 of the Public Health Service Act,
section 9812 of the Internal Revenue Code of 1986 to require
equity in the provision of mental health and substance-
related disorder benefits under group health plans, to
prohibit discrimination on the basis of genetic information
with respect to health insurance and employment, and for
other purposes.
SA 5686. Mr. DODD proposed an amendment to the bill H.R.
1424, supra.
SA 5687. Mr. SANDERS proposed an amendment to amendment SA
5685 proposed by Mr. Dodd to the bill H.R. 1424, supra.
SA 5688. Mr. DURBIN proposed an amendment to the bill S.
1703, to prevent and reduce trafficking in persons.
SA 5689. Mr. DURBIN (for Ms. Collins) proposed an amendment
to the bill S. 3013, to provide for retirement equity for
Federal employees in nonforeign areas outside the 48
contiguous States and the District of Columbia, and for other
purposes.
SA 5690. Mr. DURBIN (for Mr. Cornyn (for himself and Mrs.
Feinstein)) proposed an amendment to the bill S. 3073, to
amend the Uniformed and Overseas Citizens Absentee Voting Act
to improve procedures for the collection and delivery of
absentee ballots of absent overseas uniformed services
voters, and for other purposes.
SA 5691. Ms. CANTWELL submitted an amendment intended to be
proposed by her to the bill H.R. 1424, of 1974, section 2705
of the Public Health Service Act, section 9812 of the
Internal Revenue Code of 1986 to require equity in the
provision of mental health and substance-related disorder
benefits under group health plans, to prohibit discrimination
on the basis of genetic information with respect to health
insurance and employment, and for other purposes; which was
ordered to lie on the table.
____________________
TEXT OF AMENDMENTS
SA 5683. Mr. BINGAMAN (for Mr. Dorgan (for himself, Mr. Bingaman, Mr.
Akaka, Mr. Harkin, Mr. Feingold, Mrs. Boxer, Mr. Byrd, Mr. Sanders, and
Mrs. Feinstein)) proposed an amendment to the bill H.R. 7081, to
approve the United States-India Agreement for Cooperation on Peaceful
Uses of Nuclear Energy, and for other purposes; as follows:
At the end of title I, add the following:
SEC. 106. PROHIBITION OF NUCLEAR TRADE IN EVENT OF NUCLEAR
WEAPON DETONATION BY INDIA.
Notwithstanding any other provision of law, the United
States may not export, transfer, or retransfer any nuclear
technology, material, equipment, or facility under the
Agreement if the Government of India detonates a nuclear
explosive device after the date of the enactment of this Act.
SEC. 107. CERTIFICATION, REPORTING, AND CONTROL REQUIREMENTS
IN EVENT OF NUCLEAR WEAPON DETONATION BY INDIA.
In the event the Government of India detonates a nuclear
weapon after the date of the enactment of this Act, the
President shall--
(1) certify to Congress that no United States technology,
material, equipment, or facility supplied to India under the
Agreement assisted with such detonation;
(2) not later than 60 days after such detonation, submit to
Congress a report describing United States nuclear related
export controls that could be utilized with respect to
countries that continue nuclear trade with
[[Page 23663]]
India to minimize any potential contribution by United States
exports to the nuclear weapons program of the Government of
India; and
(3) fully utilize such export controls unless, not later
than 120 days after such detonation, Congress adopts, and
there is enacted, a joint resolution disapproving of the full
utilization of such export controls.
______
SA 5684. Mr. DODD (for Mr. Pryor) proposed an amendment to the bill
S. 602, to develop the next generation of parental control technology;
as follows:
On page 6, beginning in line 4, strike ``TECHNOLOGIES.''
and insert ``TECHNOLOGIES AND EXISTING PARENTAL EMPOWERMENT
TOOLS.''.
On page 6, line 12, strike ``and''.
On page 6, line 16, strike ``offering.'' and insert
``offering; and''.
On page 6, between lines 16 and 17, insert the following:
``(3) the existence, availability, and use of parental
empowerment tools and initiatives already in the market.''.
______
SA 5685. Mr. DODD proposed an amendment to the bill H.R. 1424, of
1974, section 2705 of the Public Health Service Act, section 9812 of
the Internal Revenue Code of 1986 to require equity in the provision of
mental health and substance-related disorder benefits under group
health plans, to prohibit discrimination on the basis of genetic
information with respect to health insurance and employment, and for
other purposes; as follows:
Strike all after the enacting clause and insert the
following:
DIVISION A--EMERGENCY ECONOMIC STABILIZATION
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This division may be cited as the
``Emergency Economic Stabilization Act of 2008''.
(b) Table of Contents.--The table of contents for this
division is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.
TITLE I--TROUBLED ASSETS RELIEF PROGRAM
Sec. 101. Purchases of troubled assets.
Sec. 102. Insurance of troubled assets.
Sec. 103. Considerations.
Sec. 104. Financial Stability Oversight Board.
Sec. 105. Reports.
Sec. 106. Rights; management; sale of troubled assets; revenues and
sale proceeds.
Sec. 107. Contracting procedures.
Sec. 108. Conflicts of interest.
Sec. 109. Foreclosure mitigation efforts.
Sec. 110. Assistance to homeowners.
Sec. 111. Executive compensation and corporate governance.
Sec. 112. Coordination with foreign authorities and central banks.
Sec. 113. Minimization of long-term costs and maximization of benefits
for taxpayers.
Sec. 114. Market transparency.
Sec. 115. Graduated authorization to purchase.
Sec. 116. Oversight and audits.
Sec. 117. Study and report on margin authority.
Sec. 118. Funding.
Sec. 119. Judicial review and related matters.
Sec. 120. Termination of authority.
Sec. 121. Special Inspector General for the Troubled Asset Relief
Program.
Sec. 122. Increase in statutory limit on the public debt.
Sec. 123. Credit reform.
Sec. 124. HOPE for Homeowners amendments.
Sec. 125. Congressional Oversight Panel.
Sec. 126. FDIC authority.
Sec. 127. Cooperation with the FBI.
Sec. 128. Acceleration of effective date.
Sec. 129. Disclosures on exercise of loan authority.
Sec. 130. Technical corrections.
Sec. 131. Exchange Stabilization Fund reimbursement.
Sec. 132. Authority to suspend mark-to-market accounting.
Sec. 133. Study on mark-to-market accounting.
Sec. 134. Recoupment.
Sec. 135. Preservation of authority.
Sec. 136. Temporary increase in deposit and share insurance coverage.
TITLE II--BUDGET-RELATED PROVISIONS
Sec. 201. Information for congressional support agencies.
Sec. 202. Reports by the Office of Management and Budget and the
Congressional Budget Office.
Sec. 203. Analysis in President's Budget.
Sec. 204. Emergency treatment.
TITLE III--TAX PROVISIONS
Sec. 301. Gain or loss from sale or exchange of certain preferred
stock.
Sec. 302. Special rules for tax treatment of executive compensation of
employers participating in the troubled assets relief
program.
Sec. 303. Extension of exclusion of income from discharge of qualified
principal residence indebtedness.
SEC. 2. PURPOSES.
The purposes of this Act are--
(1) to immediately provide authority and facilities that
the Secretary of the Treasury can use to restore liquidity
and stability to the financial system of the United States;
and
(2) to ensure that such authority and such facilities are
used in a manner that--
(A) protects home values, college funds, retirement
accounts, and life savings;
(B) preserves homeownership and promotes jobs and economic
growth;
(C) maximizes overall returns to the taxpayers of the
United States; and
(D) provides public accountability for the exercise of such
authority.
SEC. 3. DEFINITIONS.
For purposes of this Act, the following definitions shall
apply:
(1) Appropriate committees of congress.--The term
``appropriate committees of Congress'' means--
(A) the Committee on Banking, Housing, and Urban Affairs,
the Committee on Finance, the Committee on the Budget, and
the Committee on Appropriations of the Senate; and
(B) the Committee on Financial Services, the Committee on
Ways and Means, the Committee on the Budget, and the
Committee on Appropriations of the House of Representatives.
(2) Board.--The term ``Board'' means the Board of Governors
of the Federal Reserve System.
(3) Congressional support agencies.--The term
``congressional support agencies'' means the Congressional
Budget Office and the Joint Committee on Taxation.
(4) Corporation.--The term ``Corporation'' means the
Federal Deposit Insurance Corporation.
(5) Financial institution.--The term ``financial
institution'' means any institution, including, but not
limited to, any bank, savings association, credit union,
security broker or dealer, or insurance company, established
and regulated under the laws of the United States or any
State, territory, or possession of the United States, the
District of Columbia, Commonwealth of Puerto Rico,
Commonwealth of Northern Mariana Islands, Guam, American
Samoa, or the United States Virgin Islands, and having
significant operations in the United States, but excluding
any central bank of, or institution owned by, a foreign
government.
(6) Fund.--The term ``Fund'' means the Troubled Assets
Insurance Financing Fund established under section 102.
(7) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(8) TARP.--The term ``TARP'' means the Troubled Asset
Relief Program established under section 101.
(9) Troubled assets.--The term ``troubled assets'' means--
(A) residential or commercial mortgages and any securities,
obligations, or other instruments that are based on or
related to such mortgages, that in each case was originated
or issued on or before March 14, 2008, the purchase of which
the Secretary determines promotes financial market stability;
and
(B) any other financial instrument that the Secretary,
after consultation with the Chairman of the Board of
Governors of the Federal Reserve System, determines the
purchase of which is necessary to promote financial market
stability, but only upon transmittal of such determination,
in writing, to the appropriate committees of Congress.
TITLE I--TROUBLED ASSETS RELIEF PROGRAM
SEC. 101. PURCHASES OF TROUBLED ASSETS.
(a) Offices; Authority.--
(1) Authority.--The Secretary is authorized to establish
the Troubled Asset Relief Program (or ``TARP'') to purchase,
and to make and fund commitments to purchase, troubled assets
from any financial institution, on such terms and conditions
as are determined by the Secretary, and in accordance with
this Act and the policies and procedures developed and
published by the Secretary.
(2) Commencement of program.--Establishment of the policies
and procedures and other similar administrative requirements
imposed on the Secretary by this Act are not intended to
delay the commencement of the TARP.
(3) Establishment of treasury office.--
(A) In general.--The Secretary shall implement any program
under paragraph (1) through an Office of Financial Stability,
established for such purpose within the Office of Domestic
Finance of the Department of the Treasury, which office shall
be headed by an Assistant Secretary of the Treasury,
appointed by the President, by and with the advice and
consent of the Senate, except that an interim Assistant
Secretary may be appointed by the Secretary.
(B) Clerical amendments.--
(i) Title 5.--Section 5315 of title 5, United States Code,
is amended in the item relating
[[Page 23664]]
to Assistant Secretaries of the Treasury, by striking ``(9)''
and inserting ``(10)''.
(ii) Title 31.--Section 301(e) of title 31, United States
Code, is amended by striking ``9'' and inserting ``10''.
(b) Consultation.--In exercising the authority under this
section, the Secretary shall consult with the Board, the
Corporation, the Comptroller of the Currency, the Director of
the Office of Thrift Supervision, the Chairman of the
National Credit Union Administration Board, and the Secretary
of Housing and Urban Development.
(c) Necessary Actions.--The Secretary is authorized to take
such actions as the Secretary deems necessary to carry out
the authorities in this Act, including, without limitation,
the following:
(1) The Secretary shall have direct hiring authority with
respect to the appointment of employees to administer this
Act.
(2) Entering into contracts, including contracts for
services authorized by section 3109 of title 5, United States
Code.
(3) Designating financial institutions as financial agents
of the Federal Government, and such institutions shall
perform all such reasonable duties related to this Act as
financial agents of the Federal Government as may be
required.
(4) In order to provide the Secretary with the flexibility
to manage troubled assets in a manner designed to minimize
cost to the taxpayers, establishing vehicles that are
authorized, subject to supervision by the Secretary, to
purchase, hold, and sell troubled assets and issue
obligations.
(5) Issuing such regulations and other guidance as may be
necessary or appropriate to define terms or carry out the
authorities or purposes of this Act.
(d) Program Guidelines.--Before the earlier of the end of
the 2-business-day period beginning on the date of the first
purchase of troubled assets pursuant to the authority under
this section or the end of the 45-day period beginning on the
date of enactment of this Act, the Secretary shall publish
program guidelines, including the following:
(1) Mechanisms for purchasing troubled assets.
(2) Methods for pricing and valuing troubled assets.
(3) Procedures for selecting asset managers.
(4) Criteria for identifying troubled assets for purchase.
(e) Preventing Unjust Enrichment.--In making purchases
under the authority of this Act, the Secretary shall take
such steps as may be necessary to prevent unjust enrichment
of financial institutions participating in a program
established under this section, including by preventing the
sale of a troubled asset to the Secretary at a higher price
than what the seller paid to purchase the asset. This
subsection does not apply to troubled assets acquired in a
merger or acquisition, or a purchase of assets from a
financial institution in conservatorship or receivership, or
that has initiated bankruptcy proceedings under title 11,
United States Code.
SEC. 102. INSURANCE OF TROUBLED ASSETS.
(a) Authority.--
(1) In general.--If the Secretary establishes the program
authorized under section 101, then the Secretary shall
establish a program to guarantee troubled assets originated
or issued prior to March 14, 2008, including mortgage-backed
securities.
(2) Guarantees.--In establishing any program under this
subsection, the Secretary may develop guarantees of troubled
assets and the associated premiums for such guarantees. Such
guarantees and premiums may be determined by category or
class of the troubled assets to be guaranteed.
(3) Extent of guarantee.--Upon request of a financial
institution, the Secretary may guarantee the timely payment
of principal of, and interest on, troubled assets in amounts
not to exceed 100 percent of such payments. Such guarantee
may be on such terms and conditions as are determined by the
Secretary, provided that such terms and conditions are
consistent with the purposes of this Act.
(b) Reports.--Not later than 90 days after the date of
enactment of this Act, the Secretary shall report to the
appropriate committees of Congress on the program established
under subsection (a).
(c) Premiums.--
(1) In general.--The Secretary shall collect premiums from
any financial institution participating in the program
established under subsection (a). Such premiums shall be in
an amount that the Secretary determines necessary to meet the
purposes of this Act and to provide sufficient reserves
pursuant to paragraph (3).
(2) Authority to base premiums on product risk.--In
establishing any premium under paragraph (1), the Secretary
may provide for variations in such rates according to the
credit risk associated with the particular troubled asset
that is being guaranteed. The Secretary shall publish the
methodology for setting the premium for a class of troubled
assets together with an explanation of the appropriateness of
the class of assets for participation in the program
established under this section. The methodology shall ensure
that the premium is consistent with paragraph (3).
(3) Minimum level.--The premiums referred to in paragraph
(1) shall be set by the Secretary at a level necessary to
create reserves sufficient to meet anticipated claims, based
on an actuarial analysis, and to ensure that taxpayers are
fully protected.
(4) Adjustment to purchase authority.--The purchase
authority limit in section 115 shall be reduced by an amount
equal to the difference between the total of the outstanding
guaranteed obligations and the balance in the Troubled Assets
Insurance Financing Fund.
(d) Troubled Assets Insurance Financing Fund.--
(1) Deposits.--The Secretary shall deposit fees collected
under this section into the Fund established under paragraph
(2).
(2) Establishment.--There is established a Troubled Assets
Insurance Financing Fund that shall consist of the amounts
collected pursuant to paragraph (1), and any balance in such
fund shall be invested by the Secretary in United States
Treasury securities, or kept in cash on hand or on deposit,
as necessary.
(3) Payments from fund.--The Secretary shall make payments
from amounts deposited in the Fund to fulfill obligations of
the guarantees provided to financial institutions under
subsection (a).
SEC. 103. CONSIDERATIONS.
In exercising the authorities granted in this Act, the
Secretary shall take into consideration--
(1) protecting the interests of taxpayers by maximizing
overall returns and minimizing the impact on the national
debt;
(2) providing stability and preventing disruption to
financial markets in order to limit the impact on the economy
and protect American jobs, savings, and retirement security;
(3) the need to help families keep their homes and to
stabilize communities;
(4) in determining whether to engage in a direct purchase
from an individual financial institution, the long-term
viability of the financial institution in determining whether
the purchase represents the most efficient use of funds under
this Act;
(5) ensuring that all financial institutions are eligible
to participate in the program, without discrimination based
on size, geography, form of organization, or the size, type,
and number of assets eligible for purchase under this Act;
(6) providing financial assistance to financial
institutions, including those serving low- and moderate-
income populations and other underserved communities, and
that have assets less than $1,000,000,000, that were well or
adequately capitalized as of June 30, 2008, and that as a
result of the devaluation of the preferred government-
sponsored enterprises stock will drop one or more capital
levels, in a manner sufficient to restore the financial
institutions to at least an adequately capitalized level;
(7) the need to ensure stability for United States public
instrumentalities, such as counties and cities, that may have
suffered significant increased costs or losses in the current
market turmoil;
(8) protecting the retirement security of Americans by
purchasing troubled assets held by or on behalf of an
eligible retirement plan described in clause (iii), (iv),
(v), or (vi) of section 402(c)(8)(B) of the Internal Revenue
Code of 1986, except that such authority shall not extend to
any compensation arrangements subject to section 409A of such
Code; and
(9) the utility of purchasing other real estate owned and
instruments backed by mortgages on multifamily properties.
SEC. 104. FINANCIAL STABILITY OVERSIGHT BOARD.
(a) Establishment.--There is established the Financial
Stability Oversight Board, which shall be responsible for--
(1) reviewing the exercise of authority under a program
developed in accordance with this Act, including--
(A) policies implemented by the Secretary and the Office of
Financial Stability created under sections 101 and 102,
including the appointment of financial agents, the
designation of asset classes to be purchased, and plans for
the structure of vehicles used to purchase troubled assets;
and
(B) the effect of such actions in assisting American
families in preserving home ownership, stabilizing financial
markets, and protecting taxpayers;
(2) making recommendations, as appropriate, to the
Secretary regarding use of the authority under this Act; and
(3) reporting any suspected fraud, misrepresentation, or
malfeasance to the Special Inspector General for the Troubled
Assets Relief Program or the Attorney General of the United
States, consistent with section 535(b) of title 28, United
States Code.
(b) Membership.--The Financial Stability Oversight Board
shall be comprised of--
(1) the Chairman of the Board of Governors of the Federal
Reserve System;
(2) the Secretary;
(3) the Director of the Federal Housing Finance Agency;
(4) the Chairman of the Securities Exchange Commission; and
(5) the Secretary of Housing and Urban Development.
(c) Chairperson.--The chairperson of the Financial
Stability Oversight Board shall be
[[Page 23665]]
elected by the members of the Board from among the members
other than the Secretary.
(d) Meetings.--The Financial Stability Oversight Board
shall meet 2 weeks after the first exercise of the purchase
authority of the Secretary under this Act, and monthly
thereafter.
(e) Additional Authorities.--In addition to the
responsibilities described in subsection (a), the Financial
Stability Oversight Board shall have the authority to ensure
that the policies implemented by the Secretary are--
(1) in accordance with the purposes of this Act;
(2) in the economic interests of the United States; and
(3) consistent with protecting taxpayers, in accordance
with section 113(a).
(f) Credit Review Committee.--The Financial Stability
Oversight Board may appoint a credit review committee for the
purpose of evaluating the exercise of the purchase authority
provided under this Act and the assets acquired through the
exercise of such authority, as the Financial Stability
Oversight Board determines appropriate.
(g) Reports.--The Financial Stability Oversight Board shall
report to the appropriate committees of Congress and the
Congressional Oversight Panel established under section 125,
not less frequently than quarterly, on the matters described
under subsection (a)(1).
(h) Termination.--The Financial Stability Oversight Board,
and its authority under this section, shall terminate on the
expiration of the 15-day period beginning upon the later of--
(1) the date that the last troubled asset acquired by the
Secretary under section 101 has been sold or transferred out
of the ownership or control of the Federal Government; or
(2) the date of expiration of the last insurance contract
issued under section 102.
SEC. 105. REPORTS.
(a) In General.--Before the expiration of the 60-day period
beginning on the date of the first exercise of the authority
granted in section 101(a), or of the first exercise of the
authority granted in section 102, whichever occurs first, and
every 30-day period thereafter, the Secretary shall report to
the appropriate committees of Congress, with respect to each
such period--
(1) an overview of actions taken by the Secretary,
including the considerations required by section 103 and the
efforts under section 109;
(2) the actual obligation and expenditure of the funds
provided for administrative expenses by section 118 during
such period and the expected expenditure of such funds in the
subsequent period; and
(3) a detailed financial statement with respect to the
exercise of authority under this Act, including--
(A) all agreements made or renewed;
(B) all insurance contracts entered into pursuant to
section 102;
(C) all transactions occurring during such period,
including the types of parties involved;
(D) the nature of the assets purchased;
(E) all projected costs and liabilities;
(F) operating expenses, including compensation for
financial agents;
(G) the valuation or pricing method used for each
transaction; and
(H) a description of the vehicles established to exercise
such authority.
(b) Tranche Reports to Congress.--
(1) Reports.--The Secretary shall provide to the
appropriate committees of Congress, at the times specified in
paragraph (2), a written report, including--
(A) a description of all of the transactions made during
the reporting period;
(B) a description of the pricing mechanism for the
transactions;
(C) a justification of the price paid for and other
financial terms associated with the transactions;
(D) a description of the impact of the exercise of such
authority on the financial system, supported, to the extent
possible, by specific data;
(E) a description of challenges that remain in the
financial system, including any benchmarks yet to be
achieved; and
(F) an estimate of additional actions under the authority
provided under this Act that may be necessary to address such
challenges.
(2) Timing.--The report required by this subsection shall
be submitted not later than 7 days after the date on which
commitments to purchase troubled assets under the authorities
provided in this Act first reach an aggregate of
$50,000,000,000 and not later than 7 days after each
$50,000,000,000 interval of such commitments is reached
thereafter.
(c) Regulatory Modernization Report.--The Secretary shall
review the current state of the financial markets and the
regulatory system and submit a written report to the
appropriate committees of Congress not later than April 30,
2009, analyzing the current state of the regulatory system
and its effectiveness at overseeing the participants in the
financial markets, including the over-the-counter swaps
market and government-sponsored enterprises, and providing
recommendations for improvement, including--
(1) recommendations regarding--
(A) whether any participants in the financial markets that
are currently outside the regulatory system should become
subject to the regulatory system; and
(B) enhancement of the clearing and settlement of over-the-
counter swaps; and
(2) the rationale underlying such recommendations.
(d) Sharing of Information.--Any report required under this
section shall also be submitted to the Congressional
Oversight Panel established under section 125.
(e) Sunset.--The reporting requirements under this section
shall terminate on the later of--
(1) the date that the last troubled asset acquired by the
Secretary under section 101 has been sold or transferred out
of the ownership or control of the Federal Government; or
(2) the date of expiration of the last insurance contract
issued under section 102.
SEC. 106. RIGHTS; MANAGEMENT; SALE OF TROUBLED ASSETS;
REVENUES AND SALE PROCEEDS.
(a) Exercise of Rights.--The Secretary may, at any time,
exercise any rights received in connection with troubled
assets purchased under this Act.
(b) Management of Troubled Assets.--The Secretary shall
have authority to manage troubled assets purchased under this
Act, including revenues and portfolio risks therefrom.
(c) Sale of Troubled Assets.--The Secretary may, at any
time, upon terms and conditions and at a price determined by
the Secretary, sell, or enter into securities loans,
repurchase transactions, or other financial transactions in
regard to, any troubled asset purchased under this Act.
(d) Transfer to Treasury.--Revenues of, and proceeds from
the sale of troubled assets purchased under this Act, or from
the sale, exercise, or surrender of warrants or senior debt
instruments acquired under section 113 shall be paid into the
general fund of the Treasury for reduction of the public
debt.
(e) Application of Sunset to Troubled Assets.--The
authority of the Secretary to hold any troubled asset
purchased under this Act before the termination date in
section 120, or to purchase or fund the purchase of a
troubled asset under a commitment entered into before the
termination date in section 120, is not subject to the
provisions of section 120.
SEC. 107. CONTRACTING PROCEDURES.
(a) Streamlined Process.--For purposes of this Act, the
Secretary may waive specific provisions of the Federal
Acquisition Regulation upon a determination that urgent and
compelling circumstances make compliance with such provisions
contrary to the public interest. Any such determination, and
the justification for such determination, shall be submitted
to the Committees on Oversight and Government Reform and
Financial Services of the House of Representatives and the
Committees on Homeland Security and Governmental Affairs and
Banking, Housing, and Urban Affairs of the Senate within 7
days.
(b) Additional Contracting Requirements.--In any
solicitation or contract where the Secretary has, pursuant to
subsection (a), waived any provision of the Federal
Acquisition Regulation pertaining to minority contracting,
the Secretary shall develop and implement standards and
procedures to ensure, to the maximum extent practicable, the
inclusion and utilization of minorities (as such term is
defined in section 1204(c) of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811
note)) and women, and minority- and women-owned businesses
(as such terms are defined in section 21A(r)(4) of the
Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)), in that
solicitation or contract, including contracts to asset
managers, servicers, property managers, and other service
providers or expert consultants.
(c) Eligibility of FDIC.--Notwithstanding subsections (a)
and (b), the Corporation--
(1) shall be eligible for, and shall be considered in, the
selection of asset managers for residential mortgage loans
and residential mortgage-backed securities; and
(2) shall be reimbursed by the Secretary for any services
provided.
SEC. 108. CONFLICTS OF INTEREST.
(a) Standards Required.--The Secretary shall issue
regulations or guidelines necessary to address and manage or
to prohibit conflicts of interest that may arise in
connection with the administration and execution of the
authorities provided under this Act, including--
(1) conflicts arising in the selection or hiring of
contractors or advisors, including asset managers;
(2) the purchase of troubled assets;
(3) the management of the troubled assets held;
(4) post-employment restrictions on employees; and
(5) any other potential conflict of interest, as the
Secretary deems necessary or appropriate in the public
interest.
(b) Timing.--Regulations or guidelines required by this
section shall be issued as soon as practicable after the date
of enactment of this Act.
SEC. 109. FORECLOSURE MITIGATION EFFORTS.
(a) Residential Mortgage Loan Servicing Standards.--To the
extent that the Secretary acquires mortgages, mortgage backed
securities, and other assets secured by residential real
estate, including multifamily
[[Page 23666]]
housing, the Secretary shall implement a plan that seeks to
maximize assistance for homeowners and use the authority of
the Secretary to encourage the servicers of the underlying
mortgages, considering net present value to the taxpayer, to
take advantage of the HOPE for Homeowners Program under
section 257 of the National Housing Act or other available
programs to minimize foreclosures. In addition, the Secretary
may use loan guarantees and credit enhancements to facilitate
loan modifications to prevent avoidable foreclosures.
(b) Coordination.--The Secretary shall coordinate with the
Corporation, the Board (with respect to any mortgage or
mortgage-backed securities or pool of securities held, owned,
or controlled by or on behalf of a Federal reserve bank, as
provided in section 110(a)(1)(C)), the Federal Housing
Finance Agency, the Secretary of Housing and Urban
Development, and other Federal Government entities that hold
troubled assets to attempt to identify opportunities for the
acquisition of classes of troubled assets that will improve
the ability of the Secretary to improve the loan modification
and restructuring process and, where permissible, to permit
bona fide tenants who are current on their rent to remain in
their homes under the terms of the lease. In the case of a
mortgage on a residential rental property, the plan required
under this section shall include protecting Federal, State,
and local rental subsidies and protections, and ensuring any
modification takes into account the need for operating funds
to maintain decent and safe conditions at the property.
(c) Consent to Reasonable Loan Modification Requests.--Upon
any request arising under existing investment contracts, the
Secretary shall consent, where appropriate, and considering
net present value to the taxpayer, to reasonable requests for
loss mitigation measures, including term extensions, rate
reductions, principal write downs, increases in the
proportion of loans within a trust or other structure allowed
to be modified, or removal of other limitation on
modifications.
SEC. 110. ASSISTANCE TO HOMEOWNERS.
(a) Definitions.--As used in this section--
(1) the term ``Federal property manager'' means--
(A) the Federal Housing Finance Agency, in its capacity as
conservator of the Federal National Mortgage Association and
the Federal Home Loan Mortgage Corporation;
(B) the Corporation, with respect to residential mortgage
loans and mortgage-backed securities held by any bridge
depository institution pursuant to section 11(n) of the
Federal Deposit Insurance Act; and
(C) the Board, with respect to any mortgage or mortgage-
backed securities or pool of securities held, owned, or
controlled by or on behalf of a Federal reserve bank, other
than mortgages or securities held, owned, or controlled in
connection with open market operations under section 14 of
the Federal Reserve Act (12 U.S.C. 353), or as collateral for
an advance or discount that is not in default;
(2) the term ``consumer'' has the same meaning as in
section 103 of the Truth in Lending Act (15 U.S.C. 1602);
(3) the term ``insured depository institution'' has the
same meaning as in section 3 of the Federal Deposit Insurance
Act (12 U.S.C. 1813); and
(4) the term ``servicer'' has the same meaning as in
section 6(i)(2) of the Real Estate Settlement Procedures Act
of 1974 (12 U.S.C. 2605(i)(2)).
(b) Homeowner Assistance by Agencies.--
(1) In general.--To the extent that the Federal property
manager holds, owns, or controls mortgages, mortgage backed
securities, and other assets secured by residential real
estate, including multifamily housing, the Federal property
manager shall implement a plan that seeks to maximize
assistance for homeowners and use its authority to encourage
the servicers of the underlying mortgages, and considering
net present value to the taxpayer, to take advantage of the
HOPE for Homeowners Program under section 257 of the National
Housing Act or other available programs to minimize
foreclosures.
(2) Modifications.--In the case of a residential mortgage
loan, modifications made under paragraph (1) may include--
(A) reduction in interest rates;
(B) reduction of loan principal; and
(C) other similar modifications.
(3) Tenant protections.--In the case of mortgages on
residential rental properties, modifications made under
paragraph (1) shall ensure--
(A) the continuation of any existing Federal, State, and
local rental subsidies and protections; and
(B) that modifications take into account the need for
operating funds to maintain decent and safe conditions at the
property.
(4) Timing.--Each Federal property manager shall develop
and begin implementation of the plan required by this
subsection not later than 60 days after the date of enactment
of this Act.
(5) Reports to congress.--Each Federal property manager
shall, 60 days after the date of enactment of this Act and
every 30 days thereafter, report to Congress specific
information on the number and types of loan modifications
made and the number of actual foreclosures occurring during
the reporting period in accordance with this section.
(6) Consultation.--In developing the plan required by this
subsection, the Federal property managers shall consult with
one another and, to the extent possible, utilize consistent
approaches to implement the requirements of this subsection.
(c) Actions With Respect to Servicers.--In any case in
which a Federal property manager is not the owner of a
residential mortgage loan, but holds an interest in
obligations or pools of obligations secured by residential
mortgage loans, the Federal property manager shall--
(1) encourage implementation by the loan servicers of loan
modifications developed under subsection (b); and
(2) assist in facilitating any such modifications, to the
extent possible.
(d) Limitation.--The requirements of this section shall not
supersede any other duty or requirement imposed on the
Federal property managers under otherwise applicable law.
SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.
(a) Applicability.--Any financial institution that sells
troubled assets to the Secretary under this Act shall be
subject to the executive compensation requirements of
subsections (b) and (c) and the provisions under the Internal
Revenue Code of 1986, as provided under the amendment by
section 302, as applicable.
(b) Direct Purchases.--
(1) In general.--Where the Secretary determines that the
purposes of this Act are best met through direct purchases of
troubled assets from an individual financial institution
where no bidding process or market prices are available, and
the Secretary receives a meaningful equity or debt position
in the financial institution as a result of the transaction,
the Secretary shall require that the financial institution
meet appropriate standards for executive compensation and
corporate governance. The standards required under this
subsection shall be effective for the duration of the period
that the Secretary holds an equity or debt position in the
financial institution.
(2) Criteria.--The standards required under this subsection
shall include--
(A) limits on compensation that exclude incentives for
senior executive officers of a financial institution to take
unnecessary and excessive risks that threaten the value of
the financial institution during the period that the
Secretary holds an equity or debt position in the financial
institution;
(B) a provision for the recovery by the financial
institution of any bonus or incentive compensation paid to a
senior executive officer based on statements of earnings,
gains, or other criteria that are later proven to be
materially inaccurate; and
(C) a prohibition on the financial institution making any
golden parachute payment to its senior executive officer
during the period that the Secretary holds an equity or debt
position in the financial institution.
(3) Definition.--For purposes of this section, the term
``senior executive officer'' means an individual who is one
of the top 5 highly paid executives of a public company,
whose compensation is required to be disclosed pursuant to
the Securities Exchange Act of 1934, and any regulations
issued thereunder, and non-public company counterparts.
(c) Auction Purchases.--Where the Secretary determines that
the purposes of this Act are best met through auction
purchases of troubled assets, and only where such purchases
per financial institution in the aggregate exceed
$300,000,000 (including direct purchases), the Secretary
shall prohibit, for such financial institution, any new
employment contract with a senior executive officer that
provides a golden parachute in the event of an involuntary
termination, bankruptcy filing, insolvency, or receivership.
The Secretary shall issue guidance to carry out this
paragraph not later than 2 months after the date of enactment
of this Act, and such guidance shall be effective upon
issuance.
(d) Sunset.--The provisions of subsection (c) shall apply
only to arrangements entered into during the period during
which the authorities under section 101(a) are in effect, as
determined under section 120.
SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES AND CENTRAL
BANKS.
The Secretary shall coordinate, as appropriate, with
foreign financial authorities and central banks to work
toward the establishment of similar programs by such
authorities and central banks. To the extent that such
foreign financial authorities or banks hold troubled assets
as a result of extending financing to financial institutions
that have failed or defaulted on such financing, such
troubled assets qualify for purchase under section 101.
SEC. 113. MINIMIZATION OF LONG-TERM COSTS AND MAXIMIZATION OF
BENEFITS FOR TAXPAYERS.
(a) Long-Term Costs and Benefits.--
(1) Minimizing negative impact.--The Secretary shall use
the authority under this Act in a manner that will minimize
any potential long-term negative impact on the taxpayer,
taking into account the direct outlays, potential long-term
returns on assets
[[Page 23667]]
purchased, and the overall economic benefits of the program,
including economic benefits due to improvements in economic
activity and the availability of credit, the impact on the
savings and pensions of individuals, and reductions in losses
to the Federal Government.
(2) Authority.--In carrying out paragraph (1), the
Secretary shall--
(A) hold the assets to maturity or for resale for and until
such time as the Secretary determines that the market is
optimal for selling such assets, in order to maximize the
value for taxpayers; and
(B) sell such assets at a price that the Secretary
determines, based on available financial analysis, will
maximize return on investment for the Federal Government.
(3) Private sector participation.--The Secretary shall
encourage the private sector to participate in purchases of
troubled assets, and to invest in financial institutions,
consistent with the provisions of this section.
(b) Use of Market Mechanisms.--In making purchases under
this Act, the Secretary shall--
(1) make such purchases at the lowest price that the
Secretary determines to be consistent with the purposes of
this Act; and
(2) maximize the efficiency of the use of taxpayer
resources by using market mechanisms, including auctions or
reverse auctions, where appropriate.
(c) Direct Purchases.--If the Secretary determines that use
of a market mechanism under subsection (b) is not feasible or
appropriate, and the purposes of the Act are best met through
direct purchases from an individual financial institution,
the Secretary shall pursue additional measures to ensure that
prices paid for assets are reasonable and reflect the
underlying value of the asset.
(d) Conditions on Purchase Authority for Warrants and Debt
Instruments.--
(1) In general.--The Secretary may not purchase, or make
any commitment to purchase, any troubled asset under the
authority of this Act, unless the Secretary receives from the
financial institution from which such assets are to be
purchased--
(A) in the case of a financial institution, the securities
of which are traded on a national securities exchange, a
warrant giving the right to the Secretary to receive
nonvoting common stock or preferred stock in such financial
institution, or voting stock with respect to which, the
Secretary agrees not to exercise voting power, as the
Secretary determines appropriate; or
(B) in the case of any financial institution other than one
described in subparagraph (A), a warrant for common or
preferred stock, or a senior debt instrument from such
financial institution, as described in paragraph (2)(C).
(2) Terms and conditions.--The terms and conditions of any
warrant or senior debt instrument required under paragraph
(1) shall meet the following requirements:
(A) Purposes.--Such terms and conditions shall, at a
minimum, be designed--
(i) to provide for reasonable participation by the
Secretary, for the benefit of taxpayers, in equity
appreciation in the case of a warrant or other equity
security, or a reasonable interest rate premium, in the case
of a debt instrument; and
(ii) to provide additional protection for the taxpayer
against losses from sale of assets by the Secretary under
this Act and the administrative expenses of the TARP.
(B) Authority to sell, exercise, or surrender.--The
Secretary may sell, exercise, or surrender a warrant or any
senior debt instrument received under this subsection, based
on the conditions established under subparagraph (A).
(C) Conversion.--The warrant shall provide that if, after
the warrant is received by the Secretary under this
subsection, the financial institution that issued the warrant
is no longer listed or traded on a national securities
exchange or securities association, as described in paragraph
(1)(A), such warrants shall convert to senior debt, or
contain appropriate protections for the Secretary to ensure
that the Treasury is appropriately compensated for the value
of the warrant, in an amount determined by the Secretary.
(D) Protections.--Any warrant representing securities to be
received by the Secretary under this subsection shall contain
anti-dilution provisions of the type employed in capital
market transactions, as determined by the Secretary. Such
provisions shall protect the value of the securities from
market transactions such as stock splits, stock
distributions, dividends, and other distributions, mergers,
and other forms of reorganization or recapitalization.
(E) Exercise price.--The exercise price for any warrant
issued pursuant to this subsection shall be set by the
Secretary, in the interest of the taxpayers.
(F) Sufficiency.--The financial institution shall guarantee
to the Secretary that it has authorized shares of nonvoting
stock available to fulfill its obligations under this
subsection. Should the financial institution not have
sufficient authorized shares, including preferred shares that
may carry dividend rights equal to a multiple number of
common shares, the Secretary may, to the extent necessary,
accept a senior debt note in an amount, and on such terms as
will compensate the Secretary with equivalent value, in the
event that a sufficient shareholder vote to authorize the
necessary additional shares cannot be obtained.
(3) Exceptions.--
(A) De minimis.--The Secretary shall establish de minimis
exceptions to the requirements of this subsection, based on
the size of the cumulative transactions of troubled assets
purchased from any one financial institution for the duration
of the program, at not more than $100,000,000.
(B) Other exceptions.--The Secretary shall establish an
exception to the requirements of this subsection and
appropriate alternative requirements for any participating
financial institution that is legally prohibited from issuing
securities and debt instruments, so as not to allow
circumvention of the requirements of this section.
SEC. 114. MARKET TRANSPARENCY.
(a) Pricing.--To facilitate market transparency, the
Secretary shall make available to the public, in electronic
form, a description, amounts, and pricing of assets acquired
under this Act, within 2 business days of purchase, trade, or
other disposition.
(b) Disclosure.--For each type of financial institutions
that sells troubled assets to the Secretary under this Act,
the Secretary shall determine whether the public disclosure
required for such financial institutions with respect to off-
balance sheet transactions, derivatives instruments,
contingent liabilities, and similar sources of potential
exposure is adequate to provide to the public sufficient
information as to the true financial position of the
institutions. If such disclosure is not adequate for that
purpose, the Secretary shall make recommendations for
additional disclosure requirements to the relevant
regulators.
SEC. 115. GRADUATED AUTHORIZATION TO PURCHASE.
(a) Authority.--The authority of the Secretary to purchase
troubled assets under this Act shall be limited as follows:
(1) Effective upon the date of enactment of this Act, such
authority shall be limited to $250,000,000,000 outstanding at
any one time.
(2) If at any time, the President submits to the Congress a
written certification that the Secretary needs to exercise
the authority under this paragraph, effective upon such
submission, such authority shall be limited to
$350,000,000,000 outstanding at any one time.
(3) If, at any time after the certification in paragraph
(2) has been made, the President transmits to the Congress a
written report detailing the plan of the Secretary to
exercise the authority under this paragraph, unless there is
enacted, within 15 calendar days of such transmission, a
joint resolution described in subsection (c), effective upon
the expiration of such 15-day period, such authority shall be
limited to $700,000,000,000 outstanding at any one time.
(b) Aggregation of Purchase Prices.--The amount of troubled
assets purchased by the Secretary outstanding at any one time
shall be determined for purposes of the dollar amount
limitations under subsection (a) by aggregating the purchase
prices of all troubled assets held.
(c) Joint Resolution of Disapproval.--
(1) In general.--Notwithstanding any other provision of
this section, the Secretary may not exercise any authority to
make purchases under this Act with regard to any amount in
excess of $350,000,000,000 previously obligated, as described
in this section if, within 15 calendar days after the date on
which Congress receives a report of the plan of the Secretary
described in subsection (a)(3), there is enacted into law a
joint resolution disapproving the plan of the Secretary with
respect to such additional amount.
(2) Contents of joint resolution.--For the purpose of this
section, the term ``joint resolution'' means only a joint
resolution--
(A) that is introduced not later than 3 calendar days after
the date on which the report of the plan of the Secretary
referred to in subsection (a)(3) is received by Congress;
(B) which does not have a preamble;
(C) the title of which is as follows: ``Joint resolution
relating to the disapproval of obligations under the
Emergency Economic Stabilization Act of 2008''; and
(D) the matter after the resolving clause of which is as
follows: ``That Congress disapproves the obligation of any
amount exceeding the amounts obligated as described in
paragraphs (1) and (2) of section 115(a) of the Emergency
Economic Stabilization Act of 2008.''.
(d) Fast Track Consideration in House of Representatives.--
(1) Reconvening.--Upon receipt of a report under subsection
(a)(3), the Speaker, if the House would otherwise be
adjourned, shall notify the Members of the House that,
pursuant to this section, the House shall convene not later
than the second calendar day after receipt of such report;
(2) Reporting and discharge.--Any committee of the House of
Representatives to which a joint resolution is referred shall
report it to the House not later than 5 calendar days after
the date of receipt of the report described in subsection
(a)(3). If a committee fails to report the joint resolution
within that period, the committee shall be discharged from
further consideration of the joint resolution and the joint
resolution shall be referred to the appropriate calendar.
[[Page 23668]]
(3) Proceeding to consideration.--After each committee
authorized to consider a joint resolution reports it to the
House or has been discharged from its consideration, it shall
be in order, not later than the sixth day after Congress
receives the report described in subsection (a)(3), to move
to proceed to consider the joint resolution in the House. All
points of order against the motion are waived. Such a motion
shall not be in order after the House has disposed of a
motion to proceed on the joint resolution. The previous
question shall be considered as ordered on the motion to its
adoption without intervening motion. The motion shall not be
debatable. A motion to reconsider the vote by which the
motion is disposed of shall not be in order.
(4) Consideration.--The joint resolution shall be
considered as read. All points of order against the joint
resolution and against its consideration are waived. The
previous question shall be considered as ordered on the joint
resolution to its passage without intervening motion except
two hours of debate equally divided and controlled by the
proponent and an opponent. A motion to reconsider the vote on
passage of the joint resolution shall not be in order.
(e) Fast Track Consideration in Senate.--
(1) Reconvening.--Upon receipt of a report under subsection
(a)(3), if the Senate has adjourned or recessed for more than
2 days, the majority leader of the Senate, after consultation
with the minority leader of the Senate, shall notify the
Members of the Senate that, pursuant to this section, the
Senate shall convene not later than the second calendar day
after receipt of such message.
(2) Placement on calendar.--Upon introduction in the
Senate, the joint resolution shall be placed immediately on
the calendar.
(3) Floor consideration.--
(A) In general.--Notwithstanding Rule XXII of the Standing
Rules of the Senate, it is in order at any time during the
period beginning on the 4th day after the date on which
Congress receives a report of the plan of the Secretary
described in subsection (a)(3) and ending on the 6th day
after the date on which Congress receives a report of the
plan of the Secretary described in subsection (a)(3) (even
though a previous motion to the same effect has been
disagreed to) to move to proceed to the consideration of the
joint resolution, and all points of order against the joint
resolution (and against consideration of the joint
resolution) are waived. The motion to proceed is not
debatable. The motion is not subject to a motion to postpone.
A motion to reconsider the vote by which the motion is agreed
to or disagreed to shall not be in order. If a motion to
proceed to the consideration of the resolution is agreed to,
the joint resolution shall remain the unfinished business
until disposed of.
(B) Debate.--Debate on the joint resolution, and on all
debatable motions and appeals in connection therewith, shall
be limited to not more than 10 hours, which shall be divided
equally between the majority and minority leaders or their
designees. A motion further to limit debate is in order and
not debatable. An amendment to, or a motion to postpone, or a
motion to proceed to the consideration of other business, or
a motion to recommit the joint resolution is not in order.
(C) Vote on passage.--The vote on passage shall occur
immediately following the conclusion of the debate on a joint
resolution, and a single quorum call at the conclusion of the
debate if requested in accordance with the rules of the
Senate.
(D) Rulings of the chair on procedure.--Appeals from the
decisions of the Chair relating to the application of the
rules of the Senate, as the case may be, to the procedure
relating to a joint resolution shall be decided without
debate.
(f) Rules Relating to Senate and House of
Representatives.--
(1) Coordination with action by other house.--If, before
the passage by one House of a joint resolution of that House,
that House receives from the other House a joint resolution,
then the following procedures shall apply:
(A) The joint resolution of the other House shall not be
referred to a committee.
(B) With respect to a joint resolution of the House
receiving the resolution--
(i) the procedure in that House shall be the same as if no
joint resolution had been received from the other House; but
(ii) the vote on passage shall be on the joint resolution
of the other House.
(2) Treatment of joint resolution of other house.--If one
House fails to introduce or consider a joint resolution under
this section, the joint resolution of the other House shall
be entitled to expedited floor procedures under this section.
(3) Treatment of companion measures.--If, following passage
of the joint resolution in the Senate, the Senate then
receives the companion measure from the House of
Representatives, the companion measure shall not be
debatable.
(4) Consideration after passage.--
(A) In general.--If Congress passes a joint resolution, the
period beginning on the date the President is presented with
the joint resolution and ending on the date the President
takes action with respect to the joint resolution shall be
disregarded in computing the 15-calendar day period described
in subsection (a)(3).
(B) Vetoes.--If the President vetoes the joint resolution--
(i) the period beginning on the date the President vetoes
the joint resolution and ending on the date the Congress
receives the veto message with respect to the joint
resolution shall be disregarded in computing the 15-calendar
day period described in subsection (a)(3), and
(ii) debate on a veto message in the Senate under this
section shall be 1 hour equally divided between the majority
and minority leaders or their designees.
(5) Rules of house of representatives and senate.--This
subsection and subsections (c), (d), and (e) are enacted by
Congress--
(A) as an exercise of the rulemaking power of the Senate
and House of Representatives, respectively, and as such it is
deemed a part of the rules of each House, respectively, but
applicable only with respect to the procedure to be followed
in that House in the case of a joint resolution, and it
supersedes other rules only to the extent that it is
inconsistent with such rules; and
(B) with full recognition of the constitutional right of
either House to change the rules (so far as relating to the
procedure of that House) at any time, in the same manner, and
to the same extent as in the case of any other rule of that
House.
SEC. 116. OVERSIGHT AND AUDITS.
(a) Comptroller General Oversight.--
(1) Scope of oversight.--The Comptroller General of the
United States shall, upon establishment of the troubled
assets relief program under this Act (in this section
referred to as the ``TARP''), commence ongoing oversight of
the activities and performance of the TARP and of any agents
and representatives of the TARP (as related to the agent or
representative's activities on behalf of or under the
authority of the TARP), including vehicles established by the
Secretary under this Act. The subjects of such oversight
shall include the following:
(A) The performance of the TARP in meeting the purposes of
this Act, particularly those involving--
(i) foreclosure mitigation;
(ii) cost reduction;
(iii) whether it has provided stability or prevented
disruption to the financial markets or the banking system;
and
(iv) whether it has protected taxpayers.
(B) The financial condition and internal controls of the
TARP, its representatives and agents.
(C) Characteristics of transactions and commitments entered
into, including transaction type, frequency, size, prices
paid, and all other relevant terms and conditions, and the
timing, duration and terms of any future commitments to
purchase assets.
(D) Characteristics and disposition of acquired assets,
including type, acquisition price, current market value, sale
prices and terms, and use of proceeds from sales.
(E) Efficiency of the operations of the TARP in the use of
appropriated funds.
(F) Compliance with all applicable laws and regulations by
the TARP, its agents and representatives.
(G) The efforts of the TARP to prevent, identify, and
minimize conflicts of interest involving any agent or
representative performing activities on behalf of or under
the authority of the TARP.
(H) The efficacy of contracting procedures pursuant to
section 107(b), including, as applicable, the efforts of the
TARP in evaluating proposals for inclusion and contracting to
the maximum extent possible of minorities (as such term is
defined in 1204(c) of the Financial Institutions Reform,
Recovery, and Enhancement Act of 1989 (12 U.S.C. 1811 note),
women, and minority- and women-owned businesses, including
ascertaining and reporting the total amount of fees paid and
other value delivered by the TARP to all of its agents and
representatives, and such amounts paid or delivered to such
firms that are minority- and women-owned businesses (as such
terms are defined in section 21A of the Federal Home Loan
Bank Act (12 U.S.C. 1441a)).
(2) Conduct and administration of oversight.--
(A) GAO presence.--The Secretary shall provide the
Comptroller General with appropriate space and facilities in
the Department of the Treasury as necessary to facilitate
oversight of the TARP until the termination date established
in section 120.
(B) Access to records.--To the extent otherwise consistent
with law, the Comptroller General shall have access, upon
request, to any information, data, schedules, books,
accounts, financial records, reports, files, electronic
communications, or other papers, things, or property
belonging to or in use by the TARP, or any vehicles
established by the Secretary under this Act, and to the
officers, directors, employees, independent public
accountants, financial advisors, and other agents and
representatives of the TARP (as related to the agent or
representative's activities on behalf of or under the
authority of the TARP) or any such vehicle at such reasonable
time as the Comptroller General may request. The Comptroller
General shall be afforded full facilities for
[[Page 23669]]
verifying transactions with the balances or securities held
by depositaries, fiscal agents, and custodians. The
Comptroller General may make and retain copies of such books,
accounts, and other records as the Comptroller General deems
appropriate.
(C) Reimbursement of costs.--The Treasury shall reimburse
the Government Accountability Office for the full cost of any
such oversight activities as billed therefor by the
Comptroller General of the United States. Such reimbursements
shall be credited to the appropriation account ``Salaries and
Expenses, Government Accountability Office'' current when the
payment is received and remain available until expended.
(3) Reporting.--The Comptroller General shall submit
reports of findings under this section, regularly and no less
frequently than once every 60 days, to the appropriate
committees of Congress, and the Special Inspector General for
the Troubled Asset Relief Program established under this Act
on the activities and performance of the TARP. The
Comptroller may also submit special reports under this
subsection as warranted by the findings of its oversight
activities.
(b) Comptroller General Audits.--
(1) Annual audit.--The TARP shall annually prepare and
issue to the appropriate committees of Congress and the
public audited financial statements prepared in accordance
with generally accepted accounting principles, and the
Comptroller General shall annually audit such statements in
accordance with generally accepted auditing standards. The
Treasury shall reimburse the Government Accountability Office
for the full cost of any such audit as billed therefor by the
Comptroller General. Such reimbursements shall be credited to
the appropriation account ``Salaries and Expenses, Government
Accountability Office'' current when the payment is received
and remain available until expended. The financial statements
prepared under this paragraph shall be on the fiscal year
basis prescribed under section 1102 of title 31, United
States Code.
(2) Authority.--The Comptroller General may audit the
programs, activities, receipts, expenditures, and financial
transactions of the TARP and any agents and representatives
of the TARP (as related to the agent or representative's
activities on behalf of or under the authority of the TARP),
including vehicles established by the Secretary under this
Act.
(3) Corrective responses to audit problems.--The TARP
shall--
(A) take action to address deficiencies identified by the
Comptroller General or other auditor engaged by the TARP; or
(B) certify to appropriate committees of Congress that no
action is necessary or appropriate.
(c) Internal Control.--
(1) Establishment.--The TARP shall establish and maintain
an effective system of internal control, consistent with the
standards prescribed under section 3512(c) of title 31,
United States Code, that provides reasonable assurance of--
(A) the effectiveness and efficiency of operations,
including the use of the resources of the TARP;
(B) the reliability of financial reporting, including
financial statements and other reports for internal and
external use; and
(C) compliance with applicable laws and regulations.
(2) Reporting.--In conjunction with each annual financial
statement issued under this section, the TARP shall--
(A) state the responsibility of management for establishing
and maintaining adequate internal control over financial
reporting; and
(B) state its assessment, as of the end of the most recent
year covered by such financial statement of the TARP, of the
effectiveness of the internal control over financial
reporting.
(d) Sharing of Information.--Any report or audit required
under this section shall also be submitted to the
Congressional Oversight Panel established under section 125.
(e) Termination.--Any oversight, reporting, or audit
requirement under this section shall terminate on the later
of--
(1) the date that the last troubled asset acquired by the
Secretary under section 101 has been sold or transferred out
of the ownership or control of the Federal Government; or
(2) the date of expiration of the last insurance contract
issued under section 102.
SEC. 117. STUDY AND REPORT ON MARGIN AUTHORITY.
(a) Study.--The Comptroller General shall undertake a study
to determine the extent to which leverage and sudden
deleveraging of financial institutions was a factor behind
the current financial crisis.
(b) Content.--The study required by this section shall
include--
(1) an analysis of the roles and responsibilities of the
Board, the Securities and Exchange Commission, the Secretary,
and other Federal banking agencies with respect to monitoring
leverage and acting to curtail excessive leveraging;
(2) an analysis of the authority of the Board to regulate
leverage, including by setting margin requirements, and what
process the Board used to decide whether or not to use its
authority;
(3) an analysis of any usage of the margin authority by the
Board; and
(4) recommendations for the Board and appropriate
committees of Congress with respect to the existing authority
of the Board.
(c) Report.--Not later than June 1, 2009, the Comptroller
General shall complete and submit a report on the study
required by this section to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives.
(d) Sharing of Information.--Any reports required under
this section shall also be submitted to the Congressional
Oversight Panel established under section 125.
SEC. 118. FUNDING.
For the purpose of the authorities granted in this Act, and
for the costs of administering those authorities, the
Secretary may use the proceeds of the sale of any securities
issued under chapter 31 of title 31, United States Code, and
the purposes for which securities may be issued under chapter
31 of title 31, United States Code, are extended to include
actions authorized by this Act, including the payment of
administrative expenses. Any funds expended or obligated by
the Secretary for actions authorized by this Act, including
the payment of administrative expenses, shall be deemed
appropriated at the time of such expenditure or obligation.
SEC. 119. JUDICIAL REVIEW AND RELATED MATTERS.
(a) Judicial Review.--
(1) Standard.--Actions by the Secretary pursuant to the
authority of this Act shall be subject to chapter 7 of title
5, United States Code, including that such final actions
shall be held unlawful and set aside if found to be
arbitrary, capricious, an abuse of discretion, or not in
accordance with law.
(2) Limitations on equitable relief.--
(A) Injunction.--No injunction or other form of equitable
relief shall be issued against the Secretary for actions
pursuant to section 101, 102, 106, and 109, other than to
remedy a violation of the Constitution.
(B) Temporary restraining order.--Any request for a
temporary restraining order against the Secretary for actions
pursuant to this Act shall be considered and granted or
denied by the court within 3 days of the date of the request.
(C) Preliminary injunction.--Any request for a preliminary
injunction against the Secretary for actions pursuant to this
Act shall be considered and granted or denied by the court on
an expedited basis consistent with the provisions of rule
65(b)(3) of the Federal Rules of Civil Procedure, or any
successor thereto.
(D) Permanent injunction.--Any request for a permanent
injunction against the Secretary for actions pursuant to this
Act shall be considered and granted or denied by the court on
an expedited basis. Whenever possible, the court shall
consolidate trial on the merits with any hearing on a request
for a preliminary injunction, consistent with the provisions
of rule 65(a)(2) of the Federal Rules of Civil Procedure, or
any successor thereto.
(3) Limitation on actions by participating companies.--No
action or claims may be brought against the Secretary by any
person that divests its assets with respect to its
participation in a program under this Act, except as provided
in paragraph (1), other than as expressly provided in a
written contract with the Secretary.
(4) Stays.--Any injunction or other form of equitable
relief issued against the Secretary for actions pursuant to
section 101, 102, 106, and 109, shall be automatically
stayed. The stay shall be lifted unless the Secretary seeks a
stay from a higher court within 3 calendar days after the
date on which the relief is issued.
(b) Related Matters.--
(1) Treatment of homeowners' rights.--The terms of any
residential mortgage loan that is part of any purchase by the
Secretary under this Act shall remain subject to all claims
and defenses that would otherwise apply, notwithstanding the
exercise of authority by the Secretary under this Act.
(2) Savings clause.--Any exercise of the authority of the
Secretary pursuant to this Act shall not impair the claims or
defenses that would otherwise apply with respect to persons
other than the Secretary. Except as established in any
contract, a servicer of pooled residential mortgages owes any
duty to determine whether the net present value of the
payments on the loan, as modified, is likely to be greater
than the anticipated net recovery that would result from
foreclosure to all investors and holders of beneficial
interests in such investment, but not to any individual or
groups of investors or beneficial interest holders, and shall
be deemed to act in the best interests of all such investors
or holders of beneficial interests if the servicer agrees to
or implements a modification or workout plan when the
servicer takes reasonable loss mitigation actions, including
partial payments.
SEC. 120. TERMINATION OF AUTHORITY.
(a) Termination.--The authorities provided under sections
101(a), excluding section 101(a)(3), and 102 shall terminate
on December 31, 2009.
(b) Extension Upon Certification.--The Secretary, upon
submission of a written certification to Congress, may extend
the authority provided under this Act to expire not
[[Page 23670]]
later than 2 years from the date of enactment of this Act.
Such certification shall include a justification of why the
extension is necessary to assist American families and
stabilize financial markets, as well as the expected cost to
the taxpayers for such an extension.
SEC. 121. SPECIAL INSPECTOR GENERAL FOR THE TROUBLED ASSET
RELIEF PROGRAM.
(a) Office of Inspector General.--There is hereby
established the Office of the Special Inspector General for
the Troubled Asset Relief Program.
(b) Appointment of Inspector General; Removal.--(1) The
head of the Office of the Special Inspector General for the
Troubled Asset Relief Program is the Special Inspector
General for the Troubled Asset Relief Program (in this
section referred to as the ``Special Inspector General''),
who shall be appointed by the President, by and with the
advice and consent of the Senate.
(2) The appointment of the Special Inspector General shall
be made on the basis of integrity and demonstrated ability in
accounting, auditing, financial analysis, law, management
analysis, public administration, or investigations.
(3) The nomination of an individual as Special Inspector
General shall be made as soon as practicable after the
establishment of any program under sections 101 and 102.
(4) The Special Inspector General shall be removable from
office in accordance with the provisions of section 3(b) of
the Inspector General Act of 1978 (5 U.S.C. App.).
(5) For purposes of section 7324 of title 5, United States
Code, the Special Inspector General shall not be considered
an employee who determines policies to be pursued by the
United States in the nationwide administration of Federal
law.
(6) The annual rate of basic pay of the Special Inspector
General shall be the annual rate of basic pay for an
Inspector General under section 3(e) of the Inspector General
Act of 1978 (5 U.S.C. App.).
(c) Duties.--(1) It shall be the duty of the Special
Inspector General to conduct, supervise, and coordinate
audits and investigations of the purchase, management, and
sale of assets by the Secretary of the Treasury under any
program established by the Secretary under section 101, and
the management by the Secretary of any program established
under section 102, including by collecting and summarizing
the following information:
(A) A description of the categories of troubled assets
purchased or otherwise procured by the Secretary.
(B) A listing of the troubled assets purchased in each such
category described under subparagraph (A).
(C) An explanation of the reasons the Secretary deemed it
necessary to purchase each such troubled asset.
(D) A listing of each financial institution that such
troubled assets were purchased from.
(E) A listing of and detailed biographical information on
each person or entity hired to manage such troubled assets.
(F) A current estimate of the total amount of troubled
assets purchased pursuant to any program established under
section 101, the amount of troubled assets on the books of
the Treasury, the amount of troubled assets sold, and the
profit and loss incurred on each sale or disposition of each
such troubled asset.
(G) A listing of the insurance contracts issued under
section 102.
(2) The Special Inspector General shall establish,
maintain, and oversee such systems, procedures, and controls
as the Special Inspector General considers appropriate to
discharge the duty under paragraph (1).
(3) In addition to the duties specified in paragraphs (1)
and (2), the Inspector General shall also have the duties and
responsibilities of inspectors general under the Inspector
General Act of 1978.
(d) Powers and Authorities.--(1) In carrying out the duties
specified in subsection (c), the Special Inspector General
shall have the authorities provided in section 6 of the
Inspector General Act of 1978.
(2) The Special Inspector General shall carry out the
duties specified in subsection (c)(1) in accordance with
section 4(b)(1) of the Inspector General Act of 1978.
(e) Personnel, Facilities, and Other Resources.--(1) The
Special Inspector General may select, appoint, and employ
such officers and employees as may be necessary for carrying
out the duties of the Special Inspector General, subject to
the provisions of title 5, United States Code, governing
appointments in the competitive service, and the provisions
of chapter 51 and subchapter III of chapter 53 of such title,
relating to classification and General Schedule pay rates.
(2) The Special Inspector General may obtain services as
authorized by section 3109 of title 5, United States Code, at
daily rates not to exceed the equivalent rate prescribed for
grade GS-15 of the General Schedule by section 5332 of such
title.
(3) The Special Inspector General may enter into contracts
and other arrangements for audits, studies, analyses, and
other services with public agencies and with private persons,
and make such payments as may be necessary to carry out the
duties of the Inspector General.
(4)(A) Upon request of the Special Inspector General for
information or assistance from any department, agency, or
other entity of the Federal Government, the head of such
entity shall, insofar as is practicable and not in
contravention of any existing law, furnish such information
or assistance to the Special Inspector General, or an
authorized designee.
(B) Whenever information or assistance requested by the
Special Inspector General is, in the judgment of the Special
Inspector General, unreasonably refused or not provided, the
Special Inspector General shall report the circumstances to
the appropriate committees of Congress without delay.
(f) Reports.--(1) Not later than 60 days after the
confirmation of the Special Inspector General, and every
calendar quarter thereafter, the Special Inspector General
shall submit to the appropriate committees of Congress a
report summarizing the activities of the Special Inspector
General during the 120-day period ending on the date of such
report. Each report shall include, for the period covered by
such report, a detailed statement of all purchases,
obligations, expenditures, and revenues associated with any
program established by the Secretary of the Treasury under
sections 101 and 102, as well as the information collected
under subsection (c)(1).
(2) Nothing in this subsection shall be construed to
authorize the public disclosure of information that is--
(A) specifically prohibited from disclosure by any other
provision of law;
(B) specifically required by Executive order to be
protected from disclosure in the interest of national defense
or national security or in the conduct of foreign affairs; or
(C) a part of an ongoing criminal investigation.
(3) Any reports required under this section shall also be
submitted to the Congressional Oversight Panel established
under section 125.
(g) Funding.--(1) Of the amounts made available to the
Secretary of the Treasury under section 118, $50,000,000
shall be available to the Special Inspector General to carry
out this section.
(2) The amount available under paragraph (1) shall remain
available until expended.
(h) Termination.--The Office of the Special Inspector
General shall terminate on the later of--
(1) the date that the last troubled asset acquired by the
Secretary under section 101 has been sold or transferred out
of the ownership or control of the Federal Government; or
(2) the date of expiration of the last insurance contract
issued under section 102.
SEC. 122. INCREASE IN STATUTORY LIMIT ON THE PUBLIC DEBT.
Subsection (b) of section 3101 of title 31, United States
Code, is amended by striking out the dollar limitation
contained in such subsection and inserting
``$11,315,000,000,000''.
SEC. 123. CREDIT REFORM.
(a) In General.--Subject to subsection (b), the costs of
purchases of troubled assets made under section 101(a) and
guarantees of troubled assets under section 102, and any cash
flows associated with the activities authorized in section
102 and subsections (a), (b), and (c) of section 106 shall be
determined as provided under the Federal Credit Reform Act of
1990 (2 U.S.C. 661 et. seq.).
(b) Costs.--For the purposes of section 502(5) of the
Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5))--
(1) the cost of troubled assets and guarantees of troubled
assets shall be calculated by adjusting the discount rate in
section 502(5)(E) (2 U.S.C. 661a(5)(E)) for market risks; and
(2) the cost of a modification of a troubled asset or
guarantee of a troubled asset shall be the difference between
the current estimate consistent with paragraph (1) under the
terms of the troubled asset or guarantee of the troubled
asset and the current estimate consistent with paragraph (1)
under the terms of the troubled asset or guarantee of the
troubled asset, as modified.
SEC. 124. HOPE FOR HOMEOWNERS AMENDMENTS.
Section 257 of the National Housing Act (12 U.S.C. 1715z-
23) is amended--
(1) in subsection (e)--
(A) in paragraph (1)(B), by inserting before ``a ratio''
the following: ``, or thereafter is likely to have, due to
the terms of the mortgage being reset,'';
(B) in paragraph (2)(B), by inserting before the period at
the end ``(or such higher percentage as the Board determines,
in the discretion of the Board)'';
(C) in paragraph (4)(A)--
(i) in the first sentence, by inserting after ``insured
loan'' the following: ``and any payments made under this
paragraph,''; and
(ii) by adding at the end the following: ``Such actions may
include making payments, which shall be accepted as payment
in full of all indebtedness under the eligible mortgage, to
any holder of an existing subordinate mortgage, in lieu of
any future appreciation payments authorized under
subparagraph (B).''; and
(2) in subsection (w), by inserting after ``administrative
costs'' the following: ``and payments pursuant to subsection
(e)(4)(A)''.
[[Page 23671]]
SEC. 125. CONGRESSIONAL OVERSIGHT PANEL.
(a) Establishment.--There is hereby established the
Congressional Oversight Panel (hereafter in this section
referred to as the ``Oversight Panel'') as an establishment
in the legislative branch.
(b) Duties.--The Oversight Panel shall review the current
state of the financial markets and the regulatory system and
submit the following reports to Congress:
(1) Regular reports.--
(A) In general.--Regular reports of the Oversight Panel
shall include the following:
(i) The use by the Secretary of authority under this Act,
including with respect to the use of contracting authority
and administration of the program.
(ii) The impact of purchases made under the Act on the
financial markets and financial institutions.
(iii) The extent to which the information made available on
transactions under the program has contributed to market
transparency.
(iv) The effectiveness of foreclosure mitigation efforts,
and the effectiveness of the program from the standpoint of
minimizing long-term costs to the taxpayers and maximizing
the benefits for taxpayers.
(B) Timing.--The reports required under this paragraph
shall be submitted not later than 30 days after the first
exercise by the Secretary of the authority under section
101(a) or 102, and every 30 days thereafter.
(2) Special report on regulatory reform.--The Oversight
Panel shall submit a special report on regulatory reform not
later than January 20, 2009, analyzing the current state of
the regulatory system and its effectiveness at overseeing the
participants in the financial system and protecting
consumers, and providing recommendations for improvement,
including recommendations regarding whether any participants
in the financial markets that are currently outside the
regulatory system should become subject to the regulatory
system, the rationale underlying such recommendation, and
whether there are any gaps in existing consumer protections.
(c) Membership.--
(1) In general.--The Oversight Panel shall consist of 5
members, as follows:
(A) 1 member appointed by the Speaker of the House of
Representatives.
(B) 1 member appointed by the minority leader of the House
of Representatives.
(C) 1 member appointed by the majority leader of the
Senate.
(D) 1 member appointed by the minority leader of the
Senate.
(E) 1 member appointed by the Speaker of the House of
Representatives and the majority leader of the Senate, after
consultation with the minority leader of the Senate and the
minority leader of the House of Representatives.
(2) Pay.--Each member of the Oversight Panel shall each be
paid at a rate equal to the daily equivalent of the annual
rate of basic pay for level I of the Executive Schedule for
each day (including travel time) during which such member is
engaged in the actual performance of duties vested in the
Commission.
(3) Prohibition of compensation of federal employees.--
Members of the Oversight Panel who are full-time officers or
employees of the United States or Members of Congress may not
receive additional pay, allowances, or benefits by reason of
their service on the Oversight Panel.
(4) Travel expenses.--Each member shall receive travel
expenses, including per diem in lieu of subsistence, in
accordance with applicable provisions under subchapter I of
chapter 57 of title 5, United States Code.
(5) Quorum.--Four members of the Oversight Panel shall
constitute a quorum but a lesser number may hold hearings.
(6) Vacancies.--A vacancy on the Oversight Panel shall be
filled in the manner in which the original appointment was
made.
(7) Meetings.--The Oversight Panel shall meet at the call
of the Chairperson or a majority of its members.
(d) Staff.--
(1) In general.--The Oversight Panel may appoint and fix
the pay of any personnel as the Commission considers
appropriate.
(2) Experts and consultants.--The Oversight Panel may
procure temporary and intermittent services under section
3109(b) of title 5, United States Code.
(3) Staff of agencies.--Upon request of the Oversight
Panel, the head of any Federal department or agency may
detail, on a reimbursable basis, any of the personnel of that
department or agency to the Oversight Panel to assist it in
carrying out its duties under this Act.
(e) Powers.--
(1) Hearings and sessions.--The Oversight Panel may, for
the purpose of carrying out this section, hold hearings, sit
and act at times and places, take testimony, and receive
evidence as the Panel considers appropriate and may
administer oaths or affirmations to witnesses appearing
before it.
(2) Powers of members and agents.--Any member or agent of
the Oversight Panel may, if authorized by the Oversight
Panel, take any action which the Oversight Panel is
authorized to take by this section.
(3) Obtaining official data.--The Oversight Panel may
secure directly from any department or agency of the United
States information necessary to enable it to carry out this
section. Upon request of the Chairperson of the Oversight
Panel, the head of that department or agency shall furnish
that information to the Oversight Panel.
(4) Reports.--The Oversight Panel shall receive and
consider all reports required to be submitted to the
Oversight Panel under this Act.
(f) Termination.--The Oversight Panel shall terminate 6
months after the termination date specified in section 120.
(g) Funding for Expenses.--
(1) Authorization of appropriations.--There is authorized
to be appropriated to the Oversight Panel such sums as may be
necessary for any fiscal year, half of which shall be derived
from the applicable account of the House of Representatives,
and half of which shall be derived from the contingent fund
of the Senate.
(2) Reimbursement of amounts.--An amount equal to the
expenses of the Oversight Panel shall be promptly transferred
by the Secretary, from time to time upon the presentment of a
statement of such expenses by the Chairperson of the
Oversight Panel, from funds made available to the Secretary
under this Act to the applicable fund of the House of
Representatives and the contingent fund of the Senate, as
appropriate, as reimbursement for amounts expended from such
account and fund under paragraph (1).
SEC. 126. FDIC AUTHORITY.
(a) In General.--Section 18(a) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(a)) is amended by adding at the
end the following new paragraph:
``(4) False advertising, misuse of fdic names, and
misrepresentation to indicate insured status.--
``(A) Prohibition on false advertising and misuse of fdic
names.--No person may represent or imply that any deposit
liability, obligation, certificate, or share is insured or
guaranteed by the Corporation, if such deposit liability,
obligation, certificate, or share is not insured or
guaranteed by the Corporation--
``(i) by using the terms `Federal Deposit', `Federal
Deposit Insurance', `Federal Deposit Insurance Corporation',
any combination of such terms, or the abbreviation `FDIC' as
part of the business name or firm name of any person,
including any corporation, partnership, business trust,
association, or other business entity; or
``(ii) by using such terms or any other terms, sign, or
symbol as part of an advertisement, solicitation, or other
document.
``(B) Prohibition on misrepresentations of insured
status.--No person may knowingly misrepresent--
``(i) that any deposit liability, obligation, certificate,
or share is insured, under this Act, if such deposit
liability, obligation, certificate, or share is not so
insured; or
``(ii) the extent to which or the manner in which any
deposit liability, obligation, certificate, or share is
insured under this Act, if such deposit liability,
obligation, certificate, or share is not so insured, to the
extent or in the manner represented.
``(C) Authority of the appropriate federal banking
agency.--The appropriate Federal banking agency shall have
enforcement authority in the case of a violation of this
paragraph by any person for which the agency is the
appropriate Federal banking agency, or any institution-
affiliated party thereof.
``(D) Corporation authority if the appropriate federal
banking agency fails to follow recommendation.--
``(i) Recommendation.--The Corporation may recommend in
writing to the appropriate Federal banking agency that the
agency take any enforcement action authorized under section 8
for purposes of enforcement of this paragraph with respect to
any person for which the agency is the appropriate Federal
banking agency or any institution-affiliated party thereof.
``(ii) Agency response.--If the appropriate Federal banking
agency does not, within 30 days of the date of receipt of a
recommendation under clause (i), take the enforcement action
with respect to this paragraph recommended by the Corporation
or provide a plan acceptable to the Corporation for
responding to the situation presented, the Corporation may
take the recommended enforcement action against such person
or institution-affiliated party.
``(E) Additional authority.--In addition to its authority
under subparagraphs (C) and (D), for purposes of this
paragraph, the Corporation shall have, in the same manner and
to the same extent as with respect to a State nonmember
insured bank--
``(i) jurisdiction over--
``(I) any person other than a person for which another
agency is the appropriate Federal banking agency or any
institution-affiliated party thereof; and
``(II) any person that aids or abets a violation of this
paragraph by a person described in subclause (I); and
``(ii) for purposes of enforcing the requirements of this
paragraph, the authority of the Corporation under--
``(I) section 10(c) to conduct investigations; and
``(II) subsections (b), (c), (d) and (i) of section 8 to
conduct enforcement actions.
``(F) Other actions preserved.--No provision of this
paragraph shall be construed as
[[Page 23672]]
barring any action otherwise available, under the laws of the
United States or any State, to any Federal or State agency or
individual.''.
(b) Enforcement Orders.--Section 8(c) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(c)) is amended by
adding at the end the following new paragraph:
``(4) False advertising or misuse of names to indicate
insured status.--
``(A) Temporary order.--
``(i) In general.--If a notice of charges served under
subsection (b)(1) specifies on the basis of particular facts
that any person engaged or is engaging in conduct described
in section 18(a)(4), the Corporation or other appropriate
Federal banking agency may issue a temporary order
requiring--
``(I) the immediate cessation of any activity or practice
described, which gave rise to the notice of charges; and
``(II) affirmative action to prevent any further, or to
remedy any existing, violation.
``(ii) Effect of order.--Any temporary order issued under
this subparagraph shall take effect upon service.
``(B) Effective period of temporary order.--A temporary
order issued under subparagraph (A) shall remain effective
and enforceable, pending the completion of an administrative
proceeding pursuant to subsection (b)(1) in connection with
the notice of charges--
``(i) until such time as the Corporation or other
appropriate Federal banking agency dismisses the charges
specified in such notice; or
``(ii) if a cease-and-desist order is issued against such
person, until the effective date of such order.
``(C) Civil money penalties.--Any violation of section
18(a)(4) shall be subject to civil money penalties, as set
forth in subsection (i), except that for any person other
than an insured depository institution or an institution-
affiliated party that is found to have violated this
paragraph, the Corporation or other appropriate Federal
banking agency shall not be required to demonstrate any loss
to an insured depository institution.''.
(c) Unenforceability of Certain Agreements.--Section 13(c)
of the Federal Deposit Insurance Act (12 U.S.C. 1823(c)) is
amended by adding at the end the following new paragraph:
``(11) Unenforceability of certain agreements.--No
provision contained in any existing or future standstill,
confidentiality, or other agreement that, directly or
indirectly--
``(A) affects, restricts, or limits the ability of any
person to offer to acquire or acquire,
``(B) prohibits any person from offering to acquire or
acquiring, or
``(C) prohibits any person from using any previously
disclosed information in connection with any such offer to
acquire or acquisition of,
all or part of any insured depository institution, including
any liabilities, assets, or interest therein, in connection
with any transaction in which the Corporation exercises its
authority under section 11 or 13, shall be enforceable
against or impose any liability on such person, as such
enforcement or liability shall be contrary to public
policy.''.
(d) Technical and Conforming Amendments.--Section 18 of the
Federal Deposit Insurance Act (12 U.S.C. 1828) is amended--
(1) in subsection (a)(3)--
(A) by striking ``this subsection'' the first place that
term appears and inserting ``paragraph (1)''; and
(B) by striking ``this subsection'' the second place that
term appears and inserting ``paragraph (2)''; and
(2) in the heading for subsection (a), by striking
``Insurance Logo.--'' and inserting ``Representations of
Deposit Insurance.--''.
SEC. 127. COOPERATION WITH THE FBI.
Any Federal financial regulatory agency shall cooperate
with the Federal Bureau of Investigation and other law
enforcement agencies investigating fraud, misrepresentation,
and malfeasance with respect to development, advertising, and
sale of financial products.
SEC. 128. ACCELERATION OF EFFECTIVE DATE.
Section 203 of the Financial Services Regulatory Relief Act
of 2006 (12 U.S.C. 461 note) is amended by striking ``October
1, 2011'' and inserting ``October 1, 2008''.
SEC. 129. DISCLOSURES ON EXERCISE OF LOAN AUTHORITY.
(a) In General.--Not later than 7 days after the date on
which the Board exercises its authority under the third
paragraph of section 13 of the Federal Reserve Act (12 U.S.C.
343; relating to discounts for individuals, partnerships, and
corporations) the Board shall provide to the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives a report which includes--
(1) the justification for exercising the authority; and
(2) the specific terms of the actions of the Board,
including the size and duration of the lending, available
information concerning the value of any collateral held with
respect to such a loan, the recipient of warrants or any
other potential equity in exchange for the loan, and any
expected cost to the taxpayers for such exercise.
(b) Periodic Updates.--The Board shall provide updates to
the Committees specified in subsection (a) not less
frequently than once every 60 days while the subject loan is
outstanding, including--
(1) the status of the loan;
(2) the value of the collateral held by the Federal reserve
bank which initiated the loan; and
(3) the projected cost to the taxpayers of the loan.
(c) Confidentiality.--The information submitted to the
Congress under this section shall be kept confidential, upon
the written request of the Chairman of the Board, in which
case it shall be made available only to the Chairpersons and
Ranking Members of the Committees described in subsection
(a).
(d) Applicability.--The provisions of this section shall be
in force for all uses of the authority provided under section
13 of the Federal Reserve Act occurring during the period
beginning on March 1, 2008 and ending on the after the date
of enactment of this Act, and reports described in subsection
(a) shall be required beginning not later than 30 days after
that date of enactment, with respect to any such exercise of
authority.
(e) Sharing of Information.--Any reports required under
this section shall also be submitted to the Congressional
Oversight Panel established under section 125.
SEC. 130. TECHNICAL CORRECTIONS.
(a) In General.--Section 128(b)(2) of the Truth in Lending
Act (15 U.S.C. 1638(b)(2)), as amended by section 2502 of the
Mortgage Disclosure Improvement Act of 2008 (Public Law 110-
289), is amended--
(1) in subparagraph (A), by striking ``In the case'' and
inserting ``Except as provided in subparagraph (G), in the
case''; and
(2) by amending subparagraph (G) to read as follows:
``(G)(i) In the case of an extension of credit relating to
a plan described in section 101(53D) of title 11, United
States Code--
``(I) the requirements of subparagraphs (A) through (E)
shall not apply; and
``(II) a good faith estimate of the disclosures required
under subsection (a) shall be made in accordance with
regulations of the Board under section 121(c) before such
credit is extended, or shall be delivered or placed in the
mail not later than 3 business days after the date on which
the creditor receives the written application of the consumer
for such credit, whichever is earlier.
``(ii) If a disclosure statement furnished within 3
business days of the written application (as provided under
clause (i)(II)) contains an annual percentage rate which is
subsequently rendered inaccurate, within the meaning of
section 107(c), the creditor shall furnish another disclosure
statement at the time of settlement or consummation of the
transaction.''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect as if included in the amendments made by
section 2502 of the Mortgage Disclosure Improvement Act of
2008 (Public Law 110-289).
SEC. 131. EXCHANGE STABILIZATION FUND REIMBURSEMENT.
(a) Reimbursement.--The Secretary shall reimburse the
Exchange Stabilization Fund established under section 5302 of
title 31, United States Code, for any funds that are used for
the Treasury Money Market Funds Guaranty Program for the
United States money market mutual fund industry, from funds
under this Act.
(b) Limits on Use of Exchange Stabilization Fund.--The
Secretary is prohibited from using the Exchange Stabilization
Fund for the establishment of any future guaranty programs
for the United States money market mutual fund industry.
SEC. 132. AUTHORITY TO SUSPEND MARK-TO-MARKET ACCOUNTING.
(a) Authority.--The Securities and Exchange Commission
shall have the authority under the securities laws (as such
term is defined in section 3(a)(47) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)(47)) to suspend, by
rule, regulation, or order, the application of Statement
Number 157 of the Financial Accounting Standards Board for
any issuer (as such term is defined in section 3(a)(8) of
such Act) or with respect to any class or category of
transaction if the Commission determines that is necessary or
appropriate in the public interest and is consistent with the
protection of investors.
(b) Savings Provision.--Nothing in subsection (a) shall be
construed to restrict or limit any authority of the
Securities and Exchange Commission under securities laws as
in effect on the date of enactment of this Act.
SEC. 133. STUDY ON MARK-TO-MARKET ACCOUNTING.
(a) Study.--The Securities and Exchange Commission, in
consultation with the Board and the Secretary, shall conduct
a study on mark-to-market accounting standards as provided in
Statement Number 157 of the Financial Accounting Standards
Board, as such standards are applicable to financial
institutions, including depository institutions. Such a study
shall consider at a minimum--
(1) the effects of such accounting standards on a financial
institution's balance sheet;
(2) the impacts of such accounting on bank failures in
2008;
(3) the impact of such standards on the quality of
financial information available to investors;
[[Page 23673]]
(4) the process used by the Financial Accounting Standards
Board in developing accounting standards;
(5) the advisability and feasibility of modifications to
such standards; and
(6) alternative accounting standards to those provided in
such Statement Number 157.
(b) Report.--The Securities and Exchange Commission shall
submit to Congress a report of such study before the end of
the 90-day period beginning on the date of the enactment of
this Act containing the findings and determinations of the
Commission, including such administrative and legislative
recommendations as the Commission determines appropriate.
SEC. 134. RECOUPMENT.
Upon the expiration of the 5-year period beginning upon the
date of the enactment of this Act, the Director of the Office
of Management and Budget, in consultation with the Director
of the Congressional Budget Office, shall submit a report to
the Congress on the net amount within the Troubled Asset
Relief Program under this Act. In any case where there is a
shortfall, the President shall submit a legislative proposal
that recoups from the financial industry an amount equal to
the shortfall in order to ensure that the Troubled Asset
Relief Program does not add to the deficit or national debt.
SEC. 135. PRESERVATION OF AUTHORITY.
With the exception of section 131, nothing in this Act may
be construed to limit the authority of the Secretary or the
Board under any other provision of law.
SEC. 136. TEMPORARY INCREASE IN DEPOSIT AND SHARE INSURANCE
COVERAGE.
(a) Federal Deposit Insurance Act; Temporary Increase in
Deposit Insurance.--
(1) Increased amount.--Effective only during the period
beginning on the date of enactment of this Act and ending on
December 31, 2009, section 11(a)(1)(E) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(a)(1)(E)) shall apply with
``$250,000'' substituted for ``$100,000''.
(2) Temporary increase not to be considered for setting
assessments.--The temporary increase in the standard maximum
deposit insurance amount made under paragraph (1) shall not
be taken into account by the Board of Directors of the
Corporation for purposes of setting assessments under section
7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C.
1817(b)(2)).
(3) Borrowing limits temporarily lifted.--During the period
beginning on the date of enactment of this Act and ending on
December 31, 2009, the Board of Directors of the Corporation
may request from the Secretary, and the Secretary shall
approve, a loan or loans in an amount or amounts necessary to
carry out this subsection, without regard to the limitations
on such borrowing under section 14(a) and 15(c) of the
Federal Deposit Insurance Act (12 U.S.C. 1824(a), 1825(c)).
(b) Federal Credit Union Act; Temporary Increase in Share
Insurance.--
(1) Increased amount.--Effective only during the period
beginning on the date of enactment of this Act and ending on
December 31, 2009, section 207(k)(5) of the Federal Credit
Union Act (12 U.S.C. 1787(k)(5)) shall apply with
``$250,000'' substituted for ``$100,000''.
(2) Temporary increase not to be considered for setting
insurance premium charges and insurance deposit
adjustments.--The temporary increase in the standard maximum
share insurance amount made under paragraph (1) shall not be
taken into account by the National Credit Union
Administration Board for purposes of setting insurance
premium charges and share insurance deposit adjustments under
section 202(c)(2) of the Federal Credit Union Act (12 U.S.C.
1782(c)(2)).
(3) Borrowing limits temporarily lifted.--During the period
beginning on the date of enactment of this Act and ending on
December 31, 2009, the National Credit Union Administration
Board may request from the Secretary, and the Secretary shall
approve, a loan or loans in an amount or amounts necessary to
carry out this subsection, without regard to the limitations
on such borrowing under section 203(d)(1) of the Federal
Credit Union Act (12 U.S.C. 1783(d)(1)).
(c) Not for Use in Inflation Adjustments.--The temporary
increase in the standard maximum deposit insurance amount
made under this section shall not be used to make any
inflation adjustment under section 11(a)(1)(F) of the Federal
Deposit Insurance Act (12 U.S.C. 1821(a)(1)(F)) for purposes
of that Act or the Federal Credit Union Act.
TITLE II--BUDGET-RELATED PROVISIONS
SEC. 201. INFORMATION FOR CONGRESSIONAL SUPPORT AGENCIES.
Upon request, and to the extent otherwise consistent with
law, all information used by the Secretary in connection with
activities authorized under this Act (including the records
to which the Comptroller General is entitled under this Act)
shall be made available to congressional support agencies (in
accordance with their obligations to support the Congress as
set out in their authorizing statutes) for the purposes of
assisting the committees of Congress with conducting
oversight, monitoring, and analysis of the activities
authorized under this Act.
SEC. 202. REPORTS BY THE OFFICE OF MANAGEMENT AND BUDGET AND
THE CONGRESSIONAL BUDGET OFFICE.
(a) Reports by the Office of Management and Budget.--Within
60 days of the first exercise of the authority granted in
section 101(a), but in no case later than December 31, 2008,
and semiannually thereafter, the Office of Management and
Budget shall report to the President and the Congress--
(1) the estimate, notwithstanding section 502(5)(F) of the
Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)(F)), as
of the first business day that is at least 30 days prior to
the issuance of the report, of the cost of the troubled
assets, and guarantees of the troubled assets, determined in
accordance with section 123;
(2) the information used to derive the estimate, including
assets purchased or guaranteed, prices paid, revenues
received, the impact on the deficit and debt, and a
description of any outstanding commitments to purchase
troubled assets; and
(3) a detailed analysis of how the estimate has changed
from the previous report.
Beginning with the second report under subsection (a), the
Office of Management and Budget shall explain the differences
between the Congressional Budget Office estimates delivered
in accordance with subsection (b) and prior Office of
Management and Budget estimates.
(b) Reports by the Congressional Budget Office.--Within 45
days of receipt by the Congress of each report from the
Office of Management and Budget under subsection (a), the
Congressional Budget Office shall report to the Congress the
Congressional Budget Office's assessment of the report
submitted by the Office of Management and Budget, including--
(1) the cost of the troubled assets and guarantees of the
troubled assets,
(2) the information and valuation methods used to calculate
such cost, and
(3) the impact on the deficit and the debt.
(c) Financial Expertise.--In carrying out the duties in
this subsection or performing analyses of activities under
this Act, the Director of the Congressional Budget Office may
employ personnel and procure the services of experts and
consultants.
(d) Authorization of Appropriations.--There are authorized
to be appropriated such sums as may be necessary to produce
reports required by this section.
SEC. 203. ANALYSIS IN PRESIDENT'S BUDGET.
(a) In General.--Section 1105(a) of title 31, United States
Code, is amended by adding at the end the following new
paragraph:
``(35) as supplementary materials, a separate analysis of
the budgetary effects for all prior fiscal years, the current
fiscal year, the fiscal year for which the budget is
submitted, and ensuing fiscal years of the actions the
Secretary of the Treasury has taken or plans to take using
any authority provided in the Emergency Economic
Stabilization Act of 2008, including--
``(A) an estimate of the current value of all assets
purchased, sold, and guaranteed under the authority provided
in the Emergency Economic Stabilization Act of 2008 using
methodology required by the Federal Credit Reform Act of 1990
(2 U.S.C. 661 et seq.) and section 123 of the Emergency
Economic Stabilization Act of 2008;
``(B) an estimate of the deficit, the debt held by the
public, and the gross Federal debt using methodology required
by the Federal Credit Reform Act of 1990 and section 123 of
the Emergency Economic Stabilization Act of 2008;
``(C) an estimate of the current value of all assets
purchased, sold, and guaranteed under the authority provided
in the Emergency Economic Stabilization Act of 2008
calculated on a cash basis;
``(D) a revised estimate of the deficit, the debt held by
the public, and the gross Federal debt, substituting the
cash-based estimates in subparagraph (C) for the estimates
calculated under subparagraph (A) pursuant to the Federal
Credit Reform Act of 1990 and section 123 of the Emergency
Economic Stabilization Act of 2008; and
``(E) the portion of the deficit which can be attributed to
any action taken by the Secretary using authority provided by
the Emergency Economic Stabilization Act of 2008 and the
extent to which the change in the deficit since the most
recent estimate is due to a reestimate using the methodology
required by the Federal Credit Reform Act of 1990 and section
123 of the Emergency Economic Stabilization Act of 2008.''
(b) Consultation.--In implementing this section, the
Director of Office of Management and Budget shall consult
periodically, but at least annually, with the Committee on
the Budget of the House of Representatives, the Committee on
the Budget of the Senate, and the Director of the
Congressional Budget Office.
(c) Effective Date.--This section and the amendment made by
this section shall apply beginning with respect to the fiscal
year 2010 budget submission of the President.
SEC. 204. EMERGENCY TREATMENT.
All provisions of this Act are designated as an emergency
requirement and necessary to meet emergency needs pursuant to
section 204(a) of S. Con. Res 21 (110th Congress), the
concurrent resolution on the budget for fiscal year 2008 and
rescissions of any amounts provided in this Act shall not be
counted for purposes of budget enforcement.
[[Page 23674]]
TITLE III--TAX PROVISIONS
SEC. 301. GAIN OR LOSS FROM SALE OR EXCHANGE OF CERTAIN
PREFERRED STOCK.
(a) In General.--For purposes of the Internal Revenue Code
of 1986, gain or loss from the sale or exchange of any
applicable preferred stock by any applicable financial
institution shall be treated as ordinary income or loss.
(b) Applicable Preferred Stock.--For purposes of this
section, the term ``applicable preferred stock'' means any
stock--
(1) which is preferred stock in--
(A) the Federal National Mortgage Association, established
pursuant to the Federal National Mortgage Association Charter
Act (12 U.S.C. 1716 et seq.), or
(B) the Federal Home Loan Mortgage Corporation, established
pursuant to the Federal Home Loan Mortgage Corporation Act
(12 U.S.C. 1451 et seq.), and
(2) which--
(A) was held by the applicable financial institution on
September 6, 2008, or
(B) was sold or exchanged by the applicable financial
institution on or after January 1, 2008, and before September
7, 2008.
(c) Applicable Financial Institution.--For purposes of this
section:
(1) In general.--Except as provided in paragraph (2), the
term ``applicable financial institution'' means--
(A) a financial institution referred to in section
582(c)(2) of the Internal Revenue Code of 1986, or
(B) a depository institution holding company (as defined in
section 3(w)(1) of the Federal Deposit Insurance Act (12
U.S.C. 1813(w)(1))).
(2) Special rules for certain sales.--In the case of--
(A) a sale or exchange described in subsection (b)(2)(B),
an entity shall be treated as an applicable financial
institution only if it was an entity described in
subparagraph (A) or (B) of paragraph (1) at the time of the
sale or exchange, and
(B) a sale or exchange after September 6, 2008, of
preferred stock described in subsection (b)(2)(A), an entity
shall be treated as an applicable financial institution only
if it was an entity described in subparagraph (A) or (B) of
paragraph (1) at all times during the period beginning on
September 6, 2008, and ending on the date of the sale or
exchange of the preferred stock.
(d) Special Rule for Certain Property Not Held on September
6, 2008.--The Secretary of the Treasury or the Secretary's
delegate may extend the application of this section to all or
a portion of the gain or loss from a sale or exchange in any
case where--
(1) an applicable financial institution sells or exchanges
applicable preferred stock after September 6, 2008, which the
applicable financial institution did not hold on such date,
but the basis of which in the hands of the applicable
financial institution at the time of the sale or exchange is
the same as the basis in the hands of the person which held
such stock on such date, or
(2) the applicable financial institution is a partner in a
partnership which--
(A) held such stock on September 6, 2008, and later sold or
exchanged such stock, or
(B) sold or exchanged such stock during the period
described in subsection (b)(2)(B).
(e) Regulatory Authority.--The Secretary of the Treasury or
the Secretary's delegate may prescribe such guidance, rules,
or regulations as are necessary to carry out the purposes of
this section.
(f) Effective Date.--This section shall apply to sales or
exchanges occurring after December 31, 2007, in taxable years
ending after such date.
SEC. 302. SPECIAL RULES FOR TAX TREATMENT OF EXECUTIVE
COMPENSATION OF EMPLOYERS PARTICIPATING IN THE
TROUBLED ASSETS RELIEF PROGRAM.
(a) Denial of Deduction.--Subsection (m) of section 162 of
the Internal Revenue Code of 1986 is amended by adding at the
end the following new paragraph:
``(5) Special rule for application to employers
participating in the troubled assets relief program.--
``(A) In general.--In the case of an applicable employer,
no deduction shall be allowed under this chapter--
``(i) in the case of executive remuneration for any
applicable taxable year which is attributable to services
performed by a covered executive during such applicable
taxable year, to the extent that the amount of such
remuneration exceeds $500,000, or
``(ii) in the case of deferred deduction executive
remuneration for any taxable year for services performed
during any applicable taxable year by a covered executive, to
the extent that the amount of such remuneration exceeds
$500,000 reduced (but not below zero) by the sum of--
``(I) the executive remuneration for such applicable
taxable year, plus
``(II) the portion of the deferred deduction executive
remuneration for such services which was taken into account
under this clause in a preceding taxable year.
``(B) Applicable employer.--For purposes of this
paragraph--
``(i) In general.--Except as provided in clause (ii), the
term `applicable employer' means any employer from whom 1 or
more troubled assets are acquired under a program established
by the Secretary under section 101(a) of the Emergency
Economic Stabilization Act of 2008 if the aggregate amount of
the assets so acquired for all taxable years exceeds
$300,000,000.
``(ii) Disregard of certain assets sold through direct
purchase.--If the only sales of troubled assets by an
employer under the program described in clause (i) are
through 1 or more direct purchases (within the meaning of
section 113(c) of the Emergency Economic Stabilization Act of
2008), such assets shall not be taken into account under
clause (i) in determining whether the employer is an
applicable employer for purposes of this paragraph.
``(iii) Aggregation rules.--Two or more persons who are
treated as a single employer under subsection (b) or (c) of
section 414 shall be treated as a single employer, except
that in applying section 1563(a) for purposes of either such
subsection, paragraphs (2) and (3) thereof shall be
disregarded.
``(C) Applicable taxable year.--For purposes of this
paragraph, the term `applicable taxable year' means, with
respect to any employer--
``(i) the first taxable year of the employer--
``(I) which includes any portion of the period during which
the authorities under section 101(a) of the Emergency
Economic Stabilization Act of 2008 are in effect (determined
under section 120 thereof), and
``(II) in which the aggregate amount of troubled assets
acquired from the employer during the taxable year pursuant
to such authorities (other than assets to which subparagraph
(B)(ii) applies), when added to the aggregate amount so
acquired for all preceding taxable years, exceeds
$300,000,000, and
``(ii) any subsequent taxable year which includes any
portion of such period.
``(D) Covered executive.--For purposes of this paragraph--
``(i) In general.--The term `covered executive' means, with
respect to any applicable taxable year, any employee--
``(I) who, at any time during the portion of the taxable
year during which the authorities under section 101(a) of the
Emergency Economic Stabilization Act of 2008 are in effect
(determined under section 120 thereof), is the chief
executive officer of the applicable employer or the chief
financial officer of the applicable employer, or an
individual acting in either such capacity, or
``(II) who is described in clause (ii).
``(ii) Highest compensated employees.--An employee is
described in this clause if the employee is 1 of the 3
highest compensated officers of the applicable employer for
the taxable year (other than an individual described in
clause (i)(I)), determined--
``(I) on the basis of the shareholder disclosure rules for
compensation under the Securities Exchange Act of 1934
(without regard to whether those rules apply to the
employer), and
``(II) by only taking into account employees employed
during the portion of the taxable year described in clause
(i)(I).
``(iii) Employee remains covered executive.--If an employee
is a covered executive with respect to an applicable employer
for any applicable taxable year, such employee shall be
treated as a covered executive with respect to such employer
for all subsequent applicable taxable years and for all
subsequent taxable years in which deferred deduction
executive remuneration with respect to services performed in
all such applicable taxable years would (but for this
paragraph) be deductible.
``(E) Executive remuneration.--For purposes of this
paragraph, the term `executive remuneration' means the
applicable employee remuneration of the covered executive, as
determined under paragraph (4) without regard to
subparagraphs (B), (C), and (D) thereof. Such term shall not
include any deferred deduction executive remuneration with
respect to services performed in a prior applicable taxable
year.
``(F) Deferred deduction executive remuneration.--For
purposes of this paragraph, the term `deferred deduction
executive remuneration' means remuneration which would be
executive remuneration for services performed in an
applicable taxable year but for the fact that the deduction
under this chapter (determined without regard to this
paragraph) for such remuneration is allowable in a subsequent
taxable year.
``(G) Coordination.--Rules similar to the rules of
subparagraphs (F) and (G) of paragraph (4) shall apply for
purposes of this paragraph.
``(H) Regulatory authority.--The Secretary may prescribe
such guidance, rules, or regulations as are necessary to
carry out the purposes of this paragraph and the Emergency
Economic Stabilization Act of 2008, including the extent to
which this paragraph applies in the case of any acquisition,
merger, or reorganization of an applicable employer.''.
(b) Golden Parachute Rule.--Section 280G of the Internal
Revenue Code of 1986 is amended--
(1) by redesignating subsection (e) as subsection (f), and
(2) by inserting after subsection (d) the following new
subsection:
[[Page 23675]]
``(e) Special Rule for Application to Employers
Participating in the Troubled Assets Relief Program.--
``(1) In general.--In the case of the severance from
employment of a covered executive of an applicable employer
during the period during which the authorities under section
101(a) of the Emergency Economic Stabilization Act of 2008
are in effect (determined under section 120 of such Act),
this section shall be applied to payments to such executive
with the following modifications:
``(A) Any reference to a disqualified individual (other
than in subsection (c)) shall be treated as a reference to a
covered executive.
``(B) Any reference to a change described in subsection
(b)(2)(A)(i) shall be treated as a reference to an applicable
severance from employment of a covered executive, and any
reference to a payment contingent on such a change shall be
treated as a reference to any payment made during an
applicable taxable year of the employer on account of such
applicable severance from employment.
``(C) Any reference to a corporation shall be treated as a
reference to an applicable employer.
``(D) The provisions of subsections (b)(2)(C), (b)(4),
(b)(5), and (d)(5) shall not apply.
``(2) Definitions and special rules.--For purposes of this
subsection:
``(A) Definitions.--Any term used in this subsection which
is also used in section 162(m)(5) shall have the meaning
given such term by such section.
``(B) Applicable severance from employment.--The term
`applicable severance from employment' means any severance
from employment of a covered executive--
``(i) by reason of an involuntary termination of the
executive by the employer, or
``(ii) in connection with any bankruptcy, liquidation, or
receivership of the employer.
``(C) Coordination and other rules.--
``(i) In general.--If a payment which is treated as a
parachute payment by reason of this subsection is also a
parachute payment determined without regard to this
subsection, this subsection shall not apply to such payment.
``(ii) Regulatory authority.--The Secretary may prescribe
such guidance, rules, or regulations as are necessary--
``(I) to carry out the purposes of this subsection and the
Emergency Economic Stabilization Act of 2008, including the
extent to which this subsection applies in the case of any
acquisition, merger, or reorganization of an applicable
employer,
``(II) to apply this section and section 4999 in cases
where one or more payments with respect to any individual are
treated as parachute payments by reason of this subsection,
and other payments with respect to such individual are
treated as parachute payments under this section without
regard to this subsection, and
``(III) to prevent the avoidance of the application of this
section through the mischaracterization of a severance from
employment as other than an applicable severance from
employment.''.
(c) Effective Dates.--
(1) In general.--The amendment made by subsection (a) shall
apply to taxable years ending on or after the date of the
enactment of this Act.
(2) Golden parachute rule.--The amendments made by
subsection (b) shall apply to payments with respect to
severances occurring during the period during which the
authorities under section 101(a) of this Act are in effect
(determined under section 120 of this Act).
SEC. 303. EXTENSION OF EXCLUSION OF INCOME FROM DISCHARGE OF
QUALIFIED PRINCIPAL RESIDENCE INDEBTEDNESS.
(a) Extension.--Subparagraph (E) of section 108(a)(1) of
the Internal Revenue Code of 1986 is amended by striking
``January 1, 2010'' and inserting ``January 1, 2013''.
(b) Effective Date.--The amendment made by this section
shall apply to discharges of indebtedness occurring on or
after January 1, 2010.
DIVISION B--ENERGY IMPROVEMENT AND EXTENSION ACT OF 2008
SECTION 1. SHORT TITLE, ETC.
(a) Short Title.--This division may be cited as the
``Energy Improvement and Extension Act of 2008''.
(b) Reference.--Except as otherwise expressly provided,
whenever in this division an amendment or repeal is expressed
in terms of an amendment to, or repeal of, a section or other
provision, the reference shall be considered to be made to a
section or other provision of the Internal Revenue Code of
1986.
(c) Table of Contents.--The table of contents for this
division is as follows:
Sec. 1. Short title, etc.
TITLE I--ENERGY PRODUCTION INCENTIVES
Subtitle A--Renewable Energy Incentives
Sec. 101. Renewable energy credit.
Sec. 102. Production credit for electricity produced from marine
renewables.
Sec. 103. Energy credit.
Sec. 104. Energy credit for small wind property.
Sec. 105. Energy credit for geothermal heat pump systems.
Sec. 106. Credit for residential energy efficient property.
Sec. 107. New clean renewable energy bonds.
Sec. 108. Credit for steel industry fuel.
Sec. 109. Special rule to implement FERC and State electric
restructuring policy.
Subtitle B--Carbon Mitigation and Coal Provisions
Sec. 111. Expansion and modification of advanced coal project
investment credit.
Sec. 112. Expansion and modification of coal gasification investment
credit.
Sec. 113. Temporary increase in coal excise tax; funding of Black Lung
Disability Trust Fund.
Sec. 114. Special rules for refund of the coal excise tax to certain
coal producers and exporters.
Sec. 115. Tax credit for carbon dioxide sequestration.
Sec. 116. Certain income and gains relating to industrial source carbon
dioxide treated as qualifying income for publicly traded
partnerships.
Sec. 117. Carbon audit of the tax code.
TITLE II--TRANSPORTATION AND DOMESTIC FUEL SECURITY PROVISIONS
Sec. 201. Inclusion of cellulosic biofuel in bonus depreciation for
biomass ethanol plant property.
Sec. 202. Credits for biodiesel and renewable diesel.
Sec. 203. Clarification that credits for fuel are designed to provide
an incentive for United States production.
Sec. 204. Extension and modification of alternative fuel credit.
Sec. 205. Credit for new qualified plug-in electric drive motor
vehicles.
Sec. 206. Exclusion from heavy truck tax for idling reduction units and
advanced insulation.
Sec. 207. Alternative fuel vehicle refueling property credit.
Sec. 208. Certain income and gains relating to alcohol fuels and
mixtures, biodiesel fuels and mixtures, and alternative
fuels and mixtures treated as qualifying income for
publicly traded partnerships.
Sec. 209. Extension and modification of election to expense certain
refineries.
Sec. 210. Extension of suspension of taxable income limit on percentage
depletion for oil and natural gas produced from marginal
properties.
Sec. 211. Transportation fringe benefit to bicycle commuters.
TITLE III--ENERGY CONSERVATION AND EFFICIENCY PROVISIONS
Sec. 301. Qualified energy conservation bonds.
Sec. 302. Credit for nonbusiness energy property.
Sec. 303. Energy efficient commercial buildings deduction.
Sec. 304. New energy efficient home credit.
Sec. 305. Modifications of energy efficient appliance credit for
appliances produced after 2007.
Sec. 306. Accelerated recovery period for depreciation of smart meters
and smart grid systems.
Sec. 307. Qualified green building and sustainable design projects.
Sec. 308. Special depreciation allowance for certain reuse and
recycling property.
TITLE IV--REVENUE PROVISIONS
Sec. 401. Limitation of deduction for income attributable to domestic
production of oil, gas, or primary products thereof.
Sec. 402. Elimination of the different treatment of foreign oil and gas
extraction income and foreign oil related income for
purposes of the foreign tax credit.
Sec. 403. Broker reporting of customer's basis in securities
transactions.
Sec. 404. 0.2 percent FUTA surtax.
Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax.
TITLE I--ENERGY PRODUCTION INCENTIVES
Subtitle A--Renewable Energy Incentives
SEC. 101. RENEWABLE ENERGY CREDIT.
(a) Extension of Credit.--
(1) 1-year extension for wind and refined coal
facilities.--Paragraphs (1) and (8) of section 45(d) are each
amended by striking ``January 1, 2009'' and inserting
``January 1, 2010''.
(2) 2-year extension for certain other facilities.--Each of
the following provisions of section 45(d) is amended by
striking ``January 1, 2009'' and inserting ``January 1,
2011'':
(A) Clauses (i) and (ii) of paragraph (2)(A).
(B) Clauses (i)(I) and (ii) of paragraph (3)(A).
(C) Paragraph (4).
(D) Paragraph (5).
(E) Paragraph (6).
(F) Paragraph (7).
(G) Subparagraphs (A) and (B) of paragraph (9).
(b) Modification of Refined Coal as a Qualified Energy
Resource.--
[[Page 23676]]
(1) Elimination of increased market value test.--Section
45(c)(7)(A)(i) (defining refined coal), as amended by section
108, is amended--
(A) by striking subclause (IV),
(B) by adding ``and'' at the end of subclause (II), and
(C) by striking ``, and'' at the end of subclause (III) and
inserting a period.
(2) Increase in required emission reduction.--Section
45(c)(7)(B) (defining qualified emission reduction) is
amended by inserting ``at least 40 percent of the emissions
of'' after ``nitrogen oxide and''.
(c) Trash Facility Clarification.--Paragraph (7) of section
45(d) is amended--
(1) by striking ``facility which burns'' and inserting
``facility (other than a facility described in paragraph (6))
which uses'', and
(2) by striking ``combustion''.
(d) Expansion of Biomass Facilities.--
(1) Open-loop biomass facilities.--Paragraph (3) of section
45(d) is amended by redesignating subparagraph (B) as
subparagraph (C) and by inserting after subparagraph (A) the
following new subparagraph:
``(B) Expansion of facility.--Such term shall include a new
unit placed in service after the date of the enactment of
this subparagraph in connection with a facility described in
subparagraph (A), but only to the extent of the increased
amount of electricity produced at the facility by reason of
such new unit.''.
(2) Closed-loop biomass facilities.--Paragraph (2) of
section 45(d) is amended by redesignating subparagraph (B) as
subparagraph (C) and inserting after subparagraph (A) the
following new subparagraph:
``(B) Expansion of facility.--Such term shall include a new
unit placed in service after the date of the enactment of
this subparagraph in connection with a facility described in
subparagraph (A)(i), but only to the extent of the increased
amount of electricity produced at the facility by reason of
such new unit.''.
(e) Modification of Rules for Hydropower Production.--
Subparagraph (C) of section 45(c)(8) is amended to read as
follows:
``(C) Nonhydroelectric dam.--For purposes of subparagraph
(A), a facility is described in this subparagraph if--
``(i) the hydroelectric project installed on the
nonhydroelectric dam is licensed by the Federal Energy
Regulatory Commission and meets all other applicable
environmental, licensing, and regulatory requirements,
``(ii) the nonhydroelectric dam was placed in service
before the date of the enactment of this paragraph and
operated for flood control, navigation, or water supply
purposes and did not produce hydroelectric power on the date
of the enactment of this paragraph, and
``(iii) the hydroelectric project is operated so that the
water surface elevation at any given location and time that
would have occurred in the absence of the hydroelectric
project is maintained, subject to any license requirements
imposed under applicable law that change the water surface
elevation for the purpose of improving environmental quality
of the affected waterway.
The Secretary, in consultation with the Federal Energy
Regulatory Commission, shall certify if a hydroelectric
project licensed at a nonhydroelectric dam meets the criteria
in clause (iii). Nothing in this section shall affect the
standards under which the Federal Energy Regulatory
Commission issues licenses for and regulates hydropower
projects under part I of the Federal Power Act.''.
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to property originally placed in service after December 31,
2008.
(2) Refined coal.--The amendments made by subsection (b)
shall apply to coal produced and sold from facilities placed
in service after December 31, 2008.
(3) Trash facility clarification.--The amendments made by
subsection (c) shall apply to electricity produced and sold
after the date of the enactment of this Act.
(4) Expansion of biomass facilities.--The amendments made
by subsection (d) shall apply to property placed in service
after the date of the enactment of this Act.
SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM
MARINE RENEWABLES.
(a) In General.--Paragraph (1) of section 45(c) is amended
by striking ``and'' at the end of subparagraph (G), by
striking the period at the end of subparagraph (H) and
inserting ``, and'', and by adding at the end the following
new subparagraph:
``(I) marine and hydrokinetic renewable energy.''.
(b) Marine Renewables.--Subsection (c) of section 45 is
amended by adding at the end the following new paragraph:
``(10) Marine and hydrokinetic renewable energy.--
``(A) In general.--The term `marine and hydrokinetic
renewable energy' means energy derived from--
``(i) waves, tides, and currents in oceans, estuaries, and
tidal areas,
``(ii) free flowing water in rivers, lakes, and streams,
``(iii) free flowing water in an irrigation system, canal,
or other man-made channel, including projects that utilize
nonmechanical structures to accelerate the flow of water for
electric power production purposes, or
``(iv) differentials in ocean temperature (ocean thermal
energy conversion).
``(B) Exceptions.--Such term shall not include any energy
which is derived from any source which utilizes a dam,
diversionary structure (except as provided in subparagraph
(A)(iii)), or impoundment for electric power production
purposes.''.
(c) Definition of Facility.--Subsection (d) of section 45
is amended by adding at the end the following new paragraph:
``(11) Marine and hydrokinetic renewable energy
facilities.--In the case of a facility producing electricity
from marine and hydrokinetic renewable energy, the term
`qualified facility' means any facility owned by the
taxpayer--
``(A) which has a nameplate capacity rating of at least 150
kilowatts, and
``(B) which is originally placed in service on or after the
date of the enactment of this paragraph and before January 1,
2012.''.
(d) Credit Rate.--Subparagraph (A) of section 45(b)(4) is
amended by striking ``or (9)'' and inserting ``(9), or
(11)''.
(e) Coordination With Small Irrigation Power.--Paragraph
(5) of section 45(d), as amended by section 101, is amended
by striking ``January 1, 2012'' and inserting ``the date of
the enactment of paragraph (11)''.
(f) Effective Date.--The amendments made by this section
shall apply to electricity produced and sold after the date
of the enactment of this Act, in taxable years ending after
such date.
SEC. 103. ENERGY CREDIT.
(a) Extension of Credit.--
(1) Solar energy property.--Paragraphs (2)(A)(i)(II) and
(3)(A)(ii) of section 48(a) are each amended by striking
``January 1, 2009'' and inserting ``January 1, 2017''.
(2) Fuel cell property.--Subparagraph (E) of section
48(c)(1) is amended by striking ``December 31, 2008'' and
inserting ``December 31, 2016''.
(3) Microturbine property.--Subparagraph (E) of section
48(c)(2) is amended by striking ``December 31, 2008'' and
inserting ``December 31, 2016''.
(b) Allowance of Energy Credit Against Alternative Minimum
Tax.--
(1) In general.--Subparagraph (B) of section 38(c)(4), as
amended by the Housing Assistance Tax Act of 2008, is amended
by redesignating clause (vi) as clause (vi) and (vii),
respectively, and by inserting after clause (iv) the
following new clause:
``(v) the credit determined under section 46 to the extent
that such credit is attributable to the energy credit
determined under section 48,''.
(2) Technical amendment.--Clause (vi) of section
38(c)(4)(B), as redesignated by paragraph (1), is amended by
striking ``section 47 to the extent attributable to'' and
inserting ``section 46 to the extent that such credit is
attributable to the rehabilitation credit under section 47,
but only with respect to''.
(c) Energy Credit for Combined Heat and Power System
Property.--
(1) In general.--Section 48(a)(3)(A) is amended by striking
``or'' at the end of clause (iii), by inserting ``or'' at the
end of clause (iv), and by adding at the end the following
new clause:
``(v) combined heat and power system property,''.
(2) Combined heat and power system property.--Subsection
(c) of section 48 is amended--
(A) by striking ``Qualified Fuel Cell Property; Qualified
Microturbine Property'' in the heading and inserting
``Definitions'', and
(B) by adding at the end the following new paragraph:
``(3) Combined heat and power system property.--
``(A) Combined heat and power system property.--The term
`combined heat and power system property' means property
comprising a system--
``(i) which uses the same energy source for the
simultaneous or sequential generation of electrical power,
mechanical shaft power, or both, in combination with the
generation of steam or other forms of useful thermal energy
(including heating and cooling applications),
``(ii) which produces--
``(I) at least 20 percent of its total useful energy in the
form of thermal energy which is not used to produce
electrical or mechanical power (or combination thereof), and
``(II) at least 20 percent of its total useful energy in
the form of electrical or mechanical power (or combination
thereof),
``(iii) the energy efficiency percentage of which exceeds
60 percent, and
``(iv) which is placed in service before January 1, 2017.
``(B) Limitation.--
``(i) In general.--In the case of combined heat and power
system property with an electrical capacity in excess of the
applicable capacity placed in service during the taxable
year, the credit under subsection (a)(1) (determined without
regard to this paragraph) for such year shall be equal to the
amount which bears the same ratio to such credit as the
applicable capacity bears to the capacity of such property.
``(ii) Applicable capacity.--For purposes of clause (i),
the term `applicable capacity'
[[Page 23677]]
means 15 megawatts or a mechanical energy capacity of more
than 20,000 horsepower or an equivalent combination of
electrical and mechanical energy capacities.
``(iii) Maximum capacity.--The term `combined heat and
power system property' shall not include any property
comprising a system if such system has a capacity in excess
of 50 megawatts or a mechanical energy capacity in excess of
67,000 horsepower or an equivalent combination of electrical
and mechanical energy capacities.
``(C) Special rules.--
``(i) Energy efficiency percentage.--For purposes of this
paragraph, the energy efficiency percentage of a system is
the fraction--
``(I) the numerator of which is the total useful
electrical, thermal, and mechanical power produced by the
system at normal operating rates, and expected to be consumed
in its normal application, and
``(II) the denominator of which is the lower heating value
of the fuel sources for the system.
``(ii) Determinations made on btu basis.--The energy
efficiency percentage and the percentages under subparagraph
(A)(ii) shall be determined on a Btu basis.
``(iii) Input and output property not included.--The term
`combined heat and power system property' does not include
property used to transport the energy source to the facility
or to distribute energy produced by the facility.
``(D) Systems using biomass.--If a system is designed to
use biomass (within the meaning of paragraphs (2) and (3) of
section 45(c) without regard to the last sentence of
paragraph (3)(A)) for at least 90 percent of the energy
source--
``(i) subparagraph (A)(iii) shall not apply, but
``(ii) the amount of credit determined under subsection (a)
with respect to such system shall not exceed the amount which
bears the same ratio to such amount of credit (determined
without regard to this subparagraph) as the energy efficiency
percentage of such system bears to 60 percent.''.
(3) Conforming amendment.--Section 48(a)(1) is amended by
striking ``paragraphs (1)(B) and (2)(B)'' and inserting
``paragraphs (1)(B), (2)(B), and (3)(B)''.
(d) Increase of Credit Limitation for Fuel Cell Property.--
Subparagraph (B) of section 48(c)(1) is amended by striking
``$500'' and inserting ``$1,500''.
(e) Public Utility Property Taken Into Account.--
(1) In general.--Paragraph (3) of section 48(a) is amended
by striking the second sentence thereof.
(2) Conforming amendments.--
(A) Paragraph (1) of section 48(c) is amended by striking
subparagraph (D) and redesignating subparagraph (E) as
subparagraph (D).
(B) Paragraph (2) of section 48(c) is amended by striking
subparagraph (D) and redesignating subparagraph (E) as
subparagraph (D).
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect on the date of the enactment of this Act.
(2) Allowance against alternative minimum tax.--The
amendments made by subsection (b) shall apply to credits
determined under section 46 of the Internal Revenue Code of
1986 in taxable years beginning after the date of the
enactment of this Act and to carrybacks of such credits.
(3) Combined heat and power and fuel cell property.--The
amendments made by subsections (c) and (d) shall apply to
periods after the date of the enactment of this Act, in
taxable years ending after such date, under rules similar to
the rules of section 48(m) of the Internal Revenue Code of
1986 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990).
(4) Public utility property.--The amendments made by
subsection (e) shall apply to periods after February 13,
2008, in taxable years ending after such date, under rules
similar to the rules of section 48(m) of the Internal Revenue
Code of 1986 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990).
SEC. 104. ENERGY CREDIT FOR SMALL WIND PROPERTY.
(a) In General.--Section 48(a)(3)(A), as amended by section
103, is amended by striking ``or'' at the end of clause (iv),
by adding ``or'' at the end of clause (v), and by inserting
after clause (v) the following new clause:
``(vi) qualified small wind energy property,''.
(b) 30 Percent Credit.--Section 48(a)(2)(A)(i) is amended
by striking ``and'' at the end of subclause (II) and by
inserting after subclause (III) the following new subclause:
``(IV) qualified small wind energy property, and''.
(c) Qualified Small Wind Energy Property.--Section 48(c),
as amended by section 103, is amended by adding at the end
the following new paragraph:
``(4) Qualified small wind energy property.--
``(A) In general.--The term `qualified small wind energy
property' means property which uses a qualifying small wind
turbine to generate electricity.
``(B) Limitation.--In the case of qualified small wind
energy property placed in service during the taxable year,
the credit otherwise determined under subsection (a)(1) for
such year with respect to all such property of the taxpayer
shall not exceed $4,000.
``(C) Qualifying small wind turbine.--The term `qualifying
small wind turbine' means a wind turbine which has a
nameplate capacity of not more than 100 kilowatts.
``(D) Termination.--The term `qualified small wind energy
property' shall not include any property for any period after
December 31, 2016.''.
(d) Conforming Amendment.--Section 48(a)(1), as amended by
section 103, is amended by striking ``paragraphs (1)(B),
(2)(B), and (3)(B)'' and inserting ``paragraphs (1)(B),
(2)(B), (3)(B), and (4)(B)''.
(e) Effective Date.--The amendments made by this section
shall apply to periods after the date of the enactment of
this Act, in taxable years ending after such date, under
rules similar to the rules of section 48(m) of the Internal
Revenue Code of 1986 (as in effect on the day before the date
of the enactment of the Revenue Reconciliation Act of 1990).
SEC. 105. ENERGY CREDIT FOR GEOTHERMAL HEAT PUMP SYSTEMS.
(a) In General.--Subparagraph (A) of section 48(a)(3), as
amended by this Act, is amended by striking ``or'' at the end
of clause (v), by inserting ``or'' at the end of clause (vi),
and by adding at the end the following new clause:
``(vii) equipment which uses the ground or ground water as
a thermal energy source to heat a structure or as a thermal
energy sink to cool a structure, but only with respect to
periods ending before January 1, 2017,''.
(b) Effective Date.--The amendments made by this section
shall apply to periods after the date of the enactment of
this Act, in taxable years ending after such date, under
rules similar to the rules of section 48(m) of the Internal
Revenue Code of 1986 (as in effect on the day before the date
of the enactment of the Revenue Reconciliation Act of 1990).
SEC. 106. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.
(a) Extension.--Section 25D(g) is amended by striking
``December 31, 2008'' and inserting ``December 31, 2016''.
(b) Removal of Limitation for Solar Electric Property.--
(1) In general.--Section 25D(b)(1), as amended by
subsections (c) and (d), is amended--
(A) by striking subparagraph (A), and
(B) by redesignating subparagraphs (B) through (E) as
subparagraphs (A) through and (D), respectively.
(2) Conforming amendment.--Section 25D(e)(4)(A), as amended
by subsections (c) and (d), is amended--
(A) by striking clause (i), and
(B) by redesignating clauses (ii) through (v) as clauses
(i) and (iv), respectively.
(c) Credit for Residential Wind Property.--
(1) In general.--Section 25D(a) is amended by striking
``and'' at the end of paragraph (2), by striking the period
at the end of paragraph (3) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(4) 30 percent of the qualified small wind energy
property expenditures made by the taxpayer during such
year.''.
(2) Limitation.--Section 25D(b)(1) is amended by striking
``and'' at the end of subparagraph (B), by striking the
period at the end of subparagraph (C) and inserting ``,
and'', and by adding at the end the following new
subparagraph:
``(D) $500 with respect to each half kilowatt of capacity
(not to exceed $4,000) of wind turbines for which qualified
small wind energy property expenditures are made.''.
(3) Qualified small wind energy property expenditures.--
(A) In general.--Section 25D(d) is amended by adding at the
end the following new paragraph:
``(4) Qualified small wind energy property expenditure.--
The term `qualified small wind energy property expenditure'
means an expenditure for property which uses a wind turbine
to generate electricity for use in connection with a dwelling
unit located in the United States and used as a residence by
the taxpayer.''.
(B) No double benefit.--Section 45(d)(1) is amended by
adding at the end the following new sentence: ``Such term
shall not include any facility with respect to which any
qualified small wind energy property expenditure (as defined
in subsection (d)(4) of section 25D) is taken into account in
determining the credit under such section.''.
(4) Maximum expenditures in case of joint occupancy.--
Section 25D(e)(4)(A) is amended by striking ``and'' at the
end of clause (ii), by striking the period at the end of
clause (iii) and inserting ``, and'', and by adding at the
end the following new clause:
``(iv) $1,667 in the case of each half kilowatt of capacity
(not to exceed $13,333) of wind turbines for which qualified
small wind energy property expenditures are made.''.
(d) Credit for Geothermal Heat pump Systems.--
(1) In general.--Section 25D(a), as amended by subsection
(c), is amended by striking
[[Page 23678]]
``and'' at the end of paragraph (3), by striking the period
at the end of paragraph (4) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(5) 30 percent of the qualified geothermal heat pump
property expenditures made by the taxpayer during such
year.''.
(2) Limitation.--Section 25D(b)(1), as amended by
subsection (c), is amended by striking ``and'' at the end of
subparagraph (C), by striking the period at the end of
subparagraph (D) and inserting ``, and'', and by adding at
the end the following new subparagraph:
``(E) $2,000 with respect to any qualified geothermal heat
pump property expenditures.''.
(3) Qualified geothermal heat pump property expenditure.--
Section 25D(d), as amended by subsection (c), is amended by
adding at the end the following new paragraph:
``(5) Qualified geothermal heat pump property
expenditure.--
``(A) In general.--The term `qualified geothermal heat pump
property expenditure' means an expenditure for qualified
geothermal heat pump property installed on or in connection
with a dwelling unit located in the United States and used as
a residence by the taxpayer.
``(B) Qualified geothermal heat pump property.--The term
`qualified geothermal heat pump property' means any equipment
which--
``(i) uses the ground or ground water as a thermal energy
source to heat the dwelling unit referred to in subparagraph
(A) or as a thermal energy sink to cool such dwelling unit,
and
``(ii) meets the requirements of the Energy Star program
which are in effect at the time that the expenditure for such
equipment is made.''.
(4) Maximum expenditures in case of joint occupancy.--
Section 25D(e)(4)(A), as amended by subsection (c), is
amended by striking ``and'' at the end of clause (iii), by
striking the period at the end of clause (iv) and inserting
``, and'', and by adding at the end the following new clause:
``(v) $6,667 in the case of any qualified geothermal heat
pump property expenditures.''.
(e) Credit Allowed Against Alternative Minimum Tax.--
(1) In general.--Subsection (c) of section 25D is amended
to read as follows:
``(c) Limitation Based on Amount of Tax; Carryforward of
Unused Credit.--
``(1) Limitation based on amount of tax.--In the case of a
taxable year to which section 26(a)(2) does not apply, the
credit allowed under subsection (a) for the taxable year
shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under this subpart
(other than this section) and section 27 for the taxable
year.
``(2) Carryforward of unused credit.--
``(A) Rule for years in which all personal credits allowed
against regular and alternative minimum tax.--In the case of
a taxable year to which section 26(a)(2) applies, if the
credit allowable under subsection (a) exceeds the limitation
imposed by section 26(a)(2) for such taxable year reduced by
the sum of the credits allowable under this subpart (other
than this section), such excess shall be carried to the
succeeding taxable year and added to the credit allowable
under subsection (a) for such succeeding taxable year.
``(B) Rule for other years.--In the case of a taxable year
to which section 26(a)(2) does not apply, if the credit
allowable under subsection (a) exceeds the limitation imposed
by paragraph (1) for such taxable year, such excess shall be
carried to the succeeding taxable year and added to the
credit allowable under subsection (a) for such succeeding
taxable year.''.
(2) Conforming amendments.--
(A) Section 23(b)(4)(B) is amended by inserting ``and
section 25D'' after ``this section''.
(B) Section 24(b)(3)(B) is amended by striking ``and 25B''
and inserting ``, 25B, and 25D''.
(C) Section 25B(g)(2) is amended by striking ``section 23''
and inserting ``sections 23 and 25D''.
(D) Section 26(a)(1) is amended by striking ``and 25B'' and
inserting ``25B, and 25D''.
(f) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2007.
(2) Solar electric property limitation.--The amendments
made by subsection (b) shall apply to taxable years beginning
after December 31, 2008.
(3) Application of egtrra sunset.--The amendments made by
subparagraphs (A) and (B) of subsection (e)(2) shall be
subject to title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 in the same manner as the
provisions of such Act to which such amendments relate.
SEC. 107. NEW CLEAN RENEWABLE ENERGY BONDS.
(a) In General.--Subpart I of part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
section:
``SEC. 54C. NEW CLEAN RENEWABLE ENERGY BONDS.
``(a) New Clean Renewable Energy Bond.--For purposes of
this subpart, the term `new clean renewable energy bond'
means any bond issued as part of an issue if--
``(1) 100 percent of the available project proceeds of such
issue are to be used for capital expenditures incurred by
governmental bodies, public power providers, or cooperative
electric companies for one or more qualified renewable energy
facilities,
``(2) the bond is issued by a qualified issuer, and
``(3) the issuer designates such bond for purposes of this
section.
``(b) Reduced Credit Amount.--The annual credit determined
under section 54A(b) with respect to any new clean renewable
energy bond shall be 70 percent of the amount so determined
without regard to this subsection.
``(c) Limitation on Amount of Bonds Designated.--
``(1) In general.--The maximum aggregate face amount of
bonds which may be designated under subsection (a) by any
issuer shall not exceed the limitation amount allocated under
this subsection to such issuer.
``(2) National limitation on amount of bonds designated.--
There is a national new clean renewable energy bond
limitation of $800,000,000 which shall be allocated by the
Secretary as provided in paragraph (3), except that--
``(A) not more than 33\1/3\ percent thereof may be
allocated to qualified projects of public power providers,
``(B) not more than 33\1/3\ percent thereof may be
allocated to qualified projects of governmental bodies, and
``(C) not more than 33\1/3\ percent thereof may be
allocated to qualified projects of cooperative electric
companies.
``(3) Method of allocation.--
``(A) Allocation among public power providers.--After the
Secretary determines the qualified projects of public power
providers which are appropriate for receiving an allocation
of the national new clean renewable energy bond limitation,
the Secretary shall, to the maximum extent practicable, make
allocations among such projects in such manner that the
amount allocated to each such project bears the same ratio to
the cost of such project as the limitation under paragraph
(2)(A) bears to the cost of all such projects.
``(B) Allocation among governmental bodies and cooperative
electric companies.--The Secretary shall make allocations of
the amount of the national new clean renewable energy bond
limitation described in paragraphs (2)(B) and (2)(C) among
qualified projects of governmental bodies and cooperative
electric companies, respectively, in such manner as the
Secretary determines appropriate.
``(d) Definitions.--For purposes of this section--
``(1) Qualified renewable energy facility.--The term
`qualified renewable energy facility' means a qualified
facility (as determined under section 45(d) without regard to
paragraphs (8) and (10) thereof and to any placed in service
date) owned by a public power provider, a governmental body,
or a cooperative electric company.
``(2) Public power provider.--The term `public power
provider' means a State utility with a service obligation, as
such terms are defined in section 217 of the Federal Power
Act (as in effect on the date of the enactment of this
paragraph).
``(3) Governmental body.--The term `governmental body'
means any State or Indian tribal government, or any political
subdivision thereof.
``(4) Cooperative electric company.--The term `cooperative
electric company' means a mutual or cooperative electric
company described in section 501(c)(12) or section
1381(a)(2)(C).
``(5) Clean renewable energy bond lender.--The term `clean
renewable energy bond lender' means a lender which is a
cooperative which is owned by, or has outstanding loans to,
100 or more cooperative electric companies and is in
existence on February 1, 2002, and shall include any
affiliated entity which is controlled by such lender.
``(6) Qualified issuer.--The term `qualified issuer' means
a public power provider, a cooperative electric company, a
governmental body, a clean renewable energy bond lender, or a
not-for-profit electric utility which has received a loan or
loan guarantee under the Rural Electrification Act.''.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 54A(d) is amended to read as
follows:
``(1) Qualified tax credit bond.--The term `qualified tax
credit bond' means--
``(A) a qualified forestry conservation bond, or
``(B) a new clean renewable energy bond,
which is part of an issue that meets requirements of
paragraphs (2), (3), (4), (5), and (6).''.
(2) Subparagraph (C) of section 54A(d)(2) is amended to
read as follows:
``(C) Qualified purpose.--For purposes of this paragraph,
the term `qualified purpose' means--
``(i) in the case of a qualified forestry conservation
bond, a purpose specified in section 54B(e), and
``(ii) in the case of a new clean renewable energy bond, a
purpose specified in section 54C(a)(1).''.
[[Page 23679]]
(3) The table of sections for subpart I of part IV of
subchapter A of chapter 1 is amended by adding at the end the
following new item:
``Sec. 54C. Qualified clean renewable energy bonds.''.
(c) Extension for Clean Renewable Energy Bonds.--Subsection
(m) of section 54 is amended by striking ``December 31,
2008'' and inserting ``December 31, 2009''.
(d) Effective Date.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.
SEC. 108. CREDIT FOR STEEL INDUSTRY FUEL.
(a) Treatment as Refined Coal.--
(1) In general.--Subparagraph (A) of section 45(c)(7) of
the Internal Revenue Code of 1986 (relating to refined coal),
as amended by this Act, is amended to read as follows:
``(A) In general.--The term `refined coal' means a fuel--
``(i) which--
``(I) is a liquid, gaseous, or solid fuel produced from
coal (including lignite) or high carbon fly ash, including
such fuel used as a feedstock,
``(II) is sold by the taxpayer with the reasonable
expectation that it will be used for purpose of producing
steam,
``(III) is certified by the taxpayer as resulting (when
used in the production of steam) in a qualified emission
reduction, and
``(IV) is produced in such a manner as to result in an
increase of at least 50 percent in the market value of the
refined coal (excluding any increase caused by materials
combined or added during the production process), as compared
to the value of the feedstock coal, or
``(ii) which is steel industry fuel.''.
(2) Steel industry fuel defined.--Paragraph (7) of section
45(c) of such Code is amended by adding at the end the
following new subparagraph:
``(C) Steel industry fuel.--
``(i) In general.--The term `steel industry fuel' means a
fuel which--
``(I) is produced through a process of liquifying coal
waste sludge and distributing it on coal, and
``(II) is used as a feedstock for the manufacture of coke.
``(ii) Coal waste sludge.--The term `coal waste sludge'
means the tar decanter sludge and related byproducts of the
coking process, including such materials that have been
stored in ground, in tanks and in lagoons, that have been
treated as hazardous wastes under applicable Federal
environmental rules absent liquefaction and processing with
coal into a feedstock for the manufacture of coke.''.
(b) Credit Amount.--
(1) In general.--Paragraph (8) of section 45(e) of the
Internal Revenue Code of 1986 (relating to refined coal
production facilities) is amended by adding at the end the
following new subparagraph
``(D) Special rule for steel industry fuel.--
``(i) In general.--In the case of a taxpayer who produces
steel industry fuel--
``(I) this paragraph shall be applied separately with
respect to steel industry fuel and other refined coal, and
``(II) in applying this paragraph to steel industry fuel,
the modifications in clause (ii) shall apply.
``(ii) Modifications.--
``(I) Credit amount.--Subparagraph (A) shall be applied by
substituting `$2 per barrel-of-oil equivalent' for `$4.375
per ton'.
``(II) Credit period.--In lieu of the 10-year period
referred to in clauses (i) and (ii)(II) of subparagraph (A),
the credit period shall be the period beginning on the later
of the date such facility was originally placed in service,
the date the modifications described in clause (iii) were
placed in service, or October 1, 2008, and ending on the
later of December 31, 2009, or the date which is 1 year after
the date such facility or the modifications described in
clause (iii) were placed in service.
``(III) No phaseout.--Subparagraph (B) shall not apply.
``(iii) Modifications.--The modifications described in this
clause are modifications to an existing facility which allow
such facility to produce steel industry fuel.
``(iv) Barrel-of-oil equivalent.--For purposes of this
subparagraph, a barrel-of-oil equivalent is the amount of
steel industry fuel that has a Btu content of 5,800,000
Btus.''.
(2) Inflation adjustment.--Paragraph (2) of section 45(b)
of such Code is amended by inserting ``the $3 amount in
subsection (e)(8)(D)(ii)(I),'' after ``subsection
(e)(8)(A),''.
(c) Termination.--Paragraph (8) of section 45(d) of the
Internal Revenue Code of 1986 (relating to refined coal
production facility), as amended by this Act, is amended to
read as follows:
``(8) Refined coal production facility.--In the case of a
facility that produces refined coal, the term `refined coal
production facility' means--
``(A) with respect to a facility producing steel industry
fuel, any facility (or any modification to a facility) which
is placed in service before January 1, 2010, and
``(B) with respect to any other facility producing refined
coal, any facility placed in service after the date of the
enactment of the American Jobs Creation Act of 2004 and
before January 1, 2010.''.
(d) Coordination With Credit for Producing Fuel From a
Nonconventional Source.--
(1) In general.--Subparagraph (B) of section 45(e)(9) of
the Internal Revenue Code of 1986 is amended--
(A) by striking ``The term'' and inserting the following:
``(i) In general.--The term'', and
(B) by adding at the end the following new clause:
``(ii) Exception for steel industry coal.--In the case of a
facility producing steel industry fuel, clause (i) shall not
apply to so much of the refined coal produced at such
facility as is steel industry fuel.''.
(2) No double benefit.--Section 45K(g)(2) of such Code is
amended by adding at the end the following new subparagraph:
``(E) Coordination with section 45.--No credit shall be
allowed with respect to any qualified fuel which is steel
industry fuel (as defined in section 45(c)(7)) if a credit is
allowed to the taxpayer for such fuel under section 45.''.
(e) Effective Date.--The amendments made by this section
shall apply to fuel produced and sold after September 30,
2008.
SEC. 109. SPECIAL RULE TO IMPLEMENT FERC AND STATE ELECTRIC
RESTRUCTURING POLICY.
(a) Extension for Qualified Electric Utilities.--
(1) In general.--Paragraph (3) of section 451(i) is amended
by inserting ``(before January 1, 2010, in the case of a
qualified electric utility)'' after ``January 1, 2008''.
(2) Qualified electric utility.--Subsection (i) of section
451 is amended by redesignating paragraphs (6) through (10)
as paragraphs (7) through (11), respectively, and by
inserting after paragraph (5) the following new paragraph:
``(6) Qualified electric utility.--For purposes of this
subsection, the term `qualified electric utility' means a
person that, as of the date of the qualifying electric
transmission transaction, is vertically integrated, in that
it is both--
``(A) a transmitting utility (as defined in section 3(23)
of the Federal Power Act (16 U.S.C. 796(23))) with respect to
the transmission facilities to which the election under this
subsection applies, and
``(B) an electric utility (as defined in section 3(22) of
the Federal Power Act (16 U.S.C. 796(22))).''.
(b) Extension of Period for Transfer of Operational Control
Authorized by FERC.--Clause (ii) of section 451(i)(4)(B) is
amended by striking ``December 31, 2007'' and inserting ``the
date which is 4 years after the close of the taxable year in
which the transaction occurs''.
(c) Property Located Outside the United States Not Treated
as Exempt Utility Property.--Paragraph (5) of section 451(i)
is amended by adding at the end the following new
subparagraph:
``(C) Exception for property located outside the united
states.--The term `exempt utility property' shall not include
any property which is located outside the United States.''.
(d) Effective Dates.--
(1) Extension.--The amendments made by subsection (a) shall
apply to transactions after December 31, 2007.
(2) Transfers of operational control.--The amendment made
by subsection (b) shall take effect as if included in section
909 of the American Jobs Creation Act of 2004.
(3) Exception for property located outside the united
states.--The amendment made by subsection (c) shall apply to
transactions after the date of the enactment of this Act.
Subtitle B--Carbon Mitigation and Coal Provisions
SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT
INVESTMENT CREDIT.
(a) Modification of Credit Amount.--Section 48A(a) is
amended by striking ``and'' at the end of paragraph (1), by
striking the period at the end of paragraph (2) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(3) 30 percent of the qualified investment for such
taxable year in the case of projects described in clause
(iii) of subsection (d)(3)(B).''.
(b) Expansion of Aggregate Credits.--Section 48A(d)(3)(A)
is amended by striking ``$1,300,000,000'' and inserting
``$2,550,000,000''.
(c) Authorization of Additional Projects.--
(1) In general.--Subparagraph (B) of section 48A(d)(3) is
amended to read as follows:
``(B) Particular projects.--Of the dollar amount in
subparagraph (A), the Secretary is authorized to certify--
``(i) $800,000,000 for integrated gasification combined
cycle projects the application for which is submitted during
the period described in paragraph (2)(A)(i),
``(ii) $500,000,000 for projects which use other advanced
coal-based generation technologies the application for which
is submitted during the period described in paragraph
(2)(A)(i), and
``(iii) $1,250,000,000 for advanced coal-based generation
technology projects the application for which is submitted
during the period described in paragraph (2)(A)(ii).''.
[[Page 23680]]
(2) Application period for additional projects.--
Subparagraph (A) of section 48A(d)(2) is amended to read as
follows:
``(A) Application period.--Each applicant for certification
under this paragraph shall submit an application meeting the
requirements of subparagraph (B). An applicant may only
submit an application--
``(i) for an allocation from the dollar amount specified in
clause (i) or (ii) of paragraph (3)(B) during the 3-year
period beginning on the date the Secretary establishes the
program under paragraph (1), and
``(ii) for an allocation from the dollar amount specified
in paragraph (3)(B)(iii) during the 3-year period beginning
at the earlier of the termination of the period described in
clause (i) or the date prescribed by the Secretary.''.
(3) Capture and sequestration of carbon dioxide emissions
requirement.--
(A) In general.--Section 48A(e)(1) is amended by striking
``and'' at the end of subparagraph (E), by striking the
period at the end of subparagraph (F) and inserting ``;
and'', and by adding at the end the following new
subparagraph:
``(G) in the case of any project the application for which
is submitted during the period described in subsection
(d)(2)(A)(ii), the project includes equipment which separates
and sequesters at least 65 percent (70 percent in the case of
an application for reallocated credits under subsection
(d)(4)) of such project's total carbon dioxide emissions.''.
(B) Highest priority for projects which sequester carbon
dioxide emissions.--Section 48A(e)(3) is amended by striking
``and'' at the end of subparagraph (A)(iii), by striking the
period at the end of subparagraph (B)(iii) and inserting ``,
and'', and by adding at the end the following new
subparagraph:
``(C) give highest priority to projects with the greatest
separation and sequestration percentage of total carbon
dioxide emissions.''.
(C) Recapture of credit for failure to sequester.--Section
48A is amended by adding at the end the following new
subsection:
``(i) Recapture of Credit for Failure To Sequester.--The
Secretary shall provide for recapturing the benefit of any
credit allowable under subsection (a) with respect to any
project which fails to attain or maintain the separation and
sequestration requirements of subsection (e)(1)(G).''.
(4) Additional priority for research partnerships.--Section
48A(e)(3)(B), as amended by paragraph (3)(B), is amended--
(A) by striking ``and'' at the end of clause (ii),
(B) by redesignating clause (iii) as clause (iv), and
(C) by inserting after clause (ii) the following new
clause:
``(iii) applicant participants who have a research
partnership with an eligible educational institution (as
defined in section 529(e)(5)), and''.
(5) Clerical amendment.--Section 48A(e)(3) is amended by
striking ``integrated gasification combined cycle'' in the
heading and inserting ``certain''.
(d) Disclosure of Allocations.--Section 48A(d) is amended
by adding at the end the following new paragraph:
``(5) Disclosure of allocations.--The Secretary shall, upon
making a certification under this subsection or section
48B(d), publicly disclose the identity of the applicant and
the amount of the credit certified with respect to such
applicant.''.
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to credits the application for which is submitted during the
period described in section 48A(d)(2)(A)(ii) of the Internal
Revenue Code of 1986 and which are allocated or reallocated
after the date of the enactment of this Act.
(2) Disclosure of allocations.--The amendment made by
subsection (d) shall apply to certifications made after the
date of the enactment of this Act.
(3) Clerical amendment.--The amendment made by subsection
(c)(5) shall take effect as if included in the amendment made
by section 1307(b) of the Energy Tax Incentives Act of 2005.
SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFICATION
INVESTMENT CREDIT.
(a) Modification of Credit Amount.--Section 48B(a) is
amended by inserting ``(30 percent in the case of credits
allocated under subsection (d)(1)(B))'' after ``20 percent''.
(b) Expansion of Aggregate Credits.--Section 48B(d)(1) is
amended by striking ``shall not exceed $350,000,000'' and all
that follows and inserting ``shall not exceed--
``(A) $350,000,000, plus
``(B) $250,000,000 for qualifying gasification projects
that include equipment which separates and sequesters at
least 75 percent of such project's total carbon dioxide
emissions.''.
(c) Recapture of Credit for Failure to Sequester.--Section
48B is amended by adding at the end the following new
subsection:
``(f) Recapture of Credit for Failure to Sequester.--The
Secretary shall provide for recapturing the benefit of any
credit allowable under subsection (a) with respect to any
project which fails to attain or maintain the separation and
sequestration requirements for such project under subsection
(d)(1).''.
(d) Selection Priorities.--Section 48B(d) is amended by
adding at the end the following new paragraph:
``(4) Selection priorities.--In determining which
qualifying gasification projects to certify under this
section, the Secretary shall--
``(A) give highest priority to projects with the greatest
separation and sequestration percentage of total carbon
dioxide emissions, and
``(B) give high priority to applicant participants who have
a research partnership with an eligible educational
institution (as defined in section 529(e)(5)).''.
(e) Eligible Projects Include Transportation Grade Liquid
Fuels.--Section 48B(c)(7) (defining eligible entity) is
amended by striking ``and'' at the end of subparagraph (F),
by striking the period at the end of subparagraph (G) and
inserting ``, and'', and by adding at the end the following
new subparagraph:
``(H) transportation grade liquid fuels.''.
(f) Effective Date.--The amendments made by this section
shall apply to credits described in section 48B(d)(1)(B) of
the Internal Revenue Code of 1986 which are allocated or
reallocated after the date of the enactment of this Act.
SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX; FUNDING OF
BLACK LUNG DISABILITY TRUST FUND.
(a) Extension of Temporary Increase.--Paragraph (2) of
section 4121(e) is amended--
(1) by striking ``January 1, 2014'' in subparagraph (A) and
inserting ``December 31, 2018'', and
(2) by striking ``January 1 after 1981'' in subparagraph
(B) and inserting ``December 31 after 2007''.
(b) Restructuring of Trust Fund Debt.--
(1) Definitions.--For purposes of this subsection--
(A) Market value of the outstanding repayable advances,
plus accrued interest.--The term ``market value of the
outstanding repayable advances, plus accrued interest'' means
the present value (determined by the Secretary of the
Treasury as of the refinancing date and using the Treasury
rate as the discount rate) of the stream of principal and
interest payments derived assuming that each repayable
advance that is outstanding on the refinancing date is due on
the 30th anniversary of the end of the fiscal year in which
the advance was made to the Trust Fund, and that all such
principal and interest payments are made on September 30 of
the applicable fiscal year.
(B) Refinancing date.--The term ``refinancing date'' means
the date occurring 2 days after the enactment of this Act.
(C) Repayable advance.--The term ``repayable advance''
means an amount that has been appropriated to the Trust Fund
in order to make benefit payments and other expenditures that
are authorized under section 9501 of the Internal Revenue
Code of 1986 and are required to be repaid when the Secretary
of the Treasury determines that monies are available in the
Trust Fund for such purpose.
(D) Treasury rate.--The term ``Treasury rate'' means a rate
determined by the Secretary of the Treasury, taking into
consideration current market yields on outstanding marketable
obligations of the United States of comparable maturities.
(E) Treasury 1-year rate.--The term ``Treasury 1-year
rate'' means a rate determined by the Secretary of the
Treasury, taking into consideration current market yields on
outstanding marketable obligations of the United States with
remaining periods to maturity of approximately 1 year, to
have been in effect as of the close of business 1 business
day prior to the date on which the Trust Fund issues
obligations to the Secretary of the Treasury under paragraph
(2)(B).
(2) Refinancing of outstanding principal of repayable
advances and unpaid interest on such advances.--
(A) Transfer to general fund.--On the refinancing date, the
Trust Fund shall repay the market value of the outstanding
repayable advances, plus accrued interest, by transferring
into the general fund of the Treasury the following sums:
(i) The proceeds from obligations that the Trust Fund shall
issue to the Secretary of the Treasury in such amounts as the
Secretaries of Labor and the Treasury shall determine and
bearing interest at the Treasury rate, and that shall be in
such forms and denominations and be subject to such other
terms and conditions, including maturity, as the Secretary of
the Treasury shall prescribe.
(ii) All, or that portion, of the appropriation made to the
Trust Fund pursuant to paragraph (3) that is needed to cover
the difference defined in that paragraph.
(B) Repayment of obligations.--In the event that the Trust
Fund is unable to repay the obligations that it has issued to
the Secretary of the Treasury under subparagraph (A)(i) and
this subparagraph, or is unable to make benefit payments and
other authorized expenditures, the Trust Fund shall issue
obligations to the Secretary of the Treasury in such amounts
as may be necessary to make such repayments, payments, and
expenditures, with a maturity of 1 year, and bearing interest
at the Treasury 1-year rate. These obligations shall be in
such forms and denominations and be subject to such other
terms and conditions as the Secretary of the Treasury shall
prescribe.
[[Page 23681]]
(C) Authority to issue obligations.--The Trust Fund is
authorized to issue obligations to the Secretary of the
Treasury under subparagraphs (A)(i) and (B). The Secretary of
the Treasury is authorized to purchase such obligations of
the Trust Fund. For the purposes of making such purchases,
the Secretary of the Treasury may use as a public debt
transaction the proceeds from the sale of any securities
issued under chapter 31 of title 31, United States Code, and
the purposes for which securities may be issued under such
chapter are extended to include any purchase of such Trust
Fund obligations under this subparagraph.
(3) One-time appropriation.--There is hereby appropriated
to the Trust Fund an amount sufficient to pay to the general
fund of the Treasury the difference between--
(A) the market value of the outstanding repayable advances,
plus accrued interest; and
(B) the proceeds from the obligations issued by the Trust
Fund to the Secretary of the Treasury under paragraph
(2)(A)(i).
(4) Prepayment of trust fund obligations.--The Trust Fund
is authorized to repay any obligation issued to the Secretary
of the Treasury under subparagraphs (A)(i) and (B) of
paragraph (2) prior to its maturity date by paying a
prepayment price that would, if the obligation being prepaid
(including all unpaid interest accrued thereon through the
date of prepayment) were purchased by a third party and held
to the maturity date of such obligation, produce a yield to
the third-party purchaser for the period from the date of
purchase to the maturity date of such obligation
substantially equal to the Treasury yield on outstanding
marketable obligations of the United States having a
comparable maturity to this period.
SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EXCISE TAX TO
CERTAIN COAL PRODUCERS AND EXPORTERS.
(a) Refund.--
(1) Coal producers.--
(A) In general.--Notwithstanding subsections (a)(1) and (c)
of section 6416 and section 6511 of the Internal Revenue Code
of 1986, if--
(i) a coal producer establishes that such coal producer, or
a party related to such coal producer, exported coal produced
by such coal producer to a foreign country or shipped coal
produced by such coal producer to a possession of the United
States, or caused such coal to be exported or shipped, the
export or shipment of which was other than through an
exporter who meets the requirements of paragraph (2),
(ii) such coal producer filed an excise tax return on or
after October 1, 1990, and on or before the date of the
enactment of this Act, and
(iii) such coal producer files a claim for refund with the
Secretary not later than the close of the 30-day period
beginning on the date of the enactment of this Act,
then the Secretary shall pay to such coal producer an amount
equal to the tax paid under section 4121 of such Code on such
coal exported or shipped by the coal producer or a party
related to such coal producer, or caused by the coal producer
or a party related to such coal producer to be exported or
shipped.
(B) Special rules for certain taxpayers.--For purposes of
this section--
(i) In general.--If a coal producer or a party related to a
coal producer has received a judgment described in clause
(iii), such coal producer shall be deemed to have established
the export of coal to a foreign country or shipment of coal
to a possession of the United States under subparagraph
(A)(i).
(ii) Amount of payment.--If a taxpayer described in clause
(i) is entitled to a payment under subparagraph (A), the
amount of such payment shall be reduced by any amount paid
pursuant to the judgment described in clause (iii).
(iii) Judgment described.--A judgment is described in this
subparagraph if such judgment--
(I) is made by a court of competent jurisdiction within the
United States,
(II) relates to the constitutionality of any tax paid on
exported coal under section 4121 of the Internal Revenue Code
of 1986, and
(III) is in favor of the coal producer or the party related
to the coal producer.
(2) Exporters.--Notwithstanding subsections (a)(1) and (c)
of section 6416 and section 6511 of the Internal Revenue Code
of 1986, and a judgment described in paragraph (1)(B)(iii) of
this subsection, if--
(A) an exporter establishes that such exporter exported
coal to a foreign country or shipped coal to a possession of
the United States, or caused such coal to be so exported or
shipped,
(B) such exporter filed a tax return on or after October 1,
1990, and on or before the date of the enactment of this Act,
and
(C) such exporter files a claim for refund with the
Secretary not later than the close of the 30-day period
beginning on the date of the enactment of this Act,
then the Secretary shall pay to such exporter an amount equal
to $0.825 per ton of such coal exported by the exporter or
caused to be exported or shipped, or caused to be exported or
shipped, by the exporter.
(b) Limitations.--Subsection (a) shall not apply with
respect to exported coal if a settlement with the Federal
Government has been made with and accepted by, the coal
producer, a party related to such coal producer, or the
exporter, of such coal, as of the date that the claim is
filed under this section with respect to such exported coal.
For purposes of this subsection, the term ``settlement with
the Federal Government'' shall not include any settlement or
stipulation entered into as of the date of the enactment of
this Act, the terms of which contemplate a judgment
concerning which any party has reserved the right to file an
appeal, or has filed an appeal.
(c) Subsequent Refund Prohibited.--No refund shall be made
under this section to the extent that a credit or refund of
such tax on such exported or shipped coal has been paid to
any person.
(d) Definitions.--For purposes of this section--
(1) Coal producer.--The term ``coal producer'' means the
person in whom is vested ownership of the coal immediately
after the coal is severed from the ground, without regard to
the existence of any contractual arrangement for the sale or
other disposition of the coal or the payment of any royalties
between the producer and third parties. The term includes any
person who extracts coal from coal waste refuse piles or from
the silt waste product which results from the wet washing (or
similar processing) of coal.
(2) Exporter.--The term ``exporter'' means a person, other
than a coal producer, who does not have a contract, fee
arrangement, or any other agreement with a producer or seller
of such coal to export or ship such coal to a third party on
behalf of the producer or seller of such coal and--
(A) is indicated in the shipper's export declaration or
other documentation as the exporter of record, or
(B) actually exported such coal to a foreign country or
shipped such coal to a possession of the United States, or
caused such coal to be so exported or shipped.
(3) Related party.--The term ``a party related to such coal
producer'' means a person who--
(A) is related to such coal producer through any degree of
common management, stock ownership, or voting control,
(B) is related (within the meaning of section 144(a)(3) of
the Internal Revenue Code of 1986) to such coal producer, or
(C) has a contract, fee arrangement, or any other agreement
with such coal producer to sell such coal to a third party on
behalf of such coal producer.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Treasury or the Secretary's designee.
(e) Timing of Refund.--With respect to any claim for refund
filed pursuant to this section, the Secretary shall determine
whether the requirements of this section are met not later
than 180 days after such claim is filed. If the Secretary
determines that the requirements of this section are met, the
claim for refund shall be paid not later than 180 days after
the Secretary makes such determination.
(f) Interest.--Any refund paid pursuant to this section
shall be paid by the Secretary with interest from the date of
overpayment determined by using the overpayment rate and
method under section 6621 of the Internal Revenue Code of
1986.
(g) Denial of Double Benefit.--The payment under subsection
(a) with respect to any coal shall not exceed--
(1) in the case of a payment to a coal producer, the amount
of tax paid under section 4121 of the Internal Revenue Code
of 1986 with respect to such coal by such coal producer or a
party related to such coal producer, and
(2) in the case of a payment to an exporter, an amount
equal to $0.825 per ton with respect to such coal exported by
the exporter or caused to be exported by the exporter.
(h) Application of Section.--This section applies only to
claims on coal exported or shipped on or after October 1,
1990, through the date of the enactment of this Act.
(i) Standing Not Conferred.--
(1) Exporters.--With respect to exporters, this section
shall not confer standing upon an exporter to commence, or
intervene in, any judicial or administrative proceeding
concerning a claim for refund by a coal producer of any
Federal or State tax, fee, or royalty paid by the coal
producer.
(2) Coal producers.--With respect to coal producers, this
section shall not confer standing upon a coal producer to
commence, or intervene in, any judicial or administrative
proceeding concerning a claim for refund by an exporter of
any Federal or State tax, fee, or royalty paid by the
producer and alleged to have been passed on to an exporter.
SEC. 115. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRATION.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 (relating to business credits) is amended by adding
at the end the following new section:
``SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION.
``(a) General Rule.--For purposes of section 38, the carbon
dioxide sequestration credit for any taxable year is an
amount equal to the sum of--
``(1) $20 per metric ton of qualified carbon dioxide which
is--
[[Page 23682]]
``(A) captured by the taxpayer at a qualified facility, and
``(B) disposed of by the taxpayer in secure geological
storage, and
``(2) $10 per metric ton of qualified carbon dioxide which
is--
``(A) captured by the taxpayer at a qualified facility, and
``(B) used by the taxpayer as a tertiary injectant in a
qualified enhanced oil or natural gas recovery project.
``(b) Qualified Carbon Dioxide.--For purposes of this
section--
``(1) In general.--The term `qualified carbon dioxide'
means carbon dioxide captured from an industrial source
which--
``(A) would otherwise be released into the atmosphere as
industrial emission of greenhouse gas, and
``(B) is measured at the source of capture and verified at
the point of disposal or injection.
``(2) Recycled carbon dioxide.--The term `qualified carbon
dioxide' includes the initial deposit of captured carbon
dioxide used as a tertiary injectant. Such term does not
include carbon dioxide that is re-captured, recycled, and re-
injected as part of the enhanced oil and natural gas recovery
process.
``(c) Qualified Facility.--For purposes of this section,
the term `qualified facility' means any industrial facility--
``(1) which is owned by the taxpayer,
``(2) at which carbon capture equipment is placed in
service, and
``(3) which captures not less than 500,000 metric tons of
carbon dioxide during the taxable year.
``(d) Special Rules and Other Definitions.--For purposes of
this section--
``(1) Only carbon dioxide captured and disposed of or used
within the united states taken into account.--The credit
under this section shall apply only with respect to qualified
carbon dioxide the capture and disposal or use of which is
within--
``(A) the United States (within the meaning of section
638(1)), or
``(B) a possession of the United States (within the meaning
of section 638(2)).
``(2) Secure geological storage.--The Secretary, in
consultation with the Administrator of the Environmental
Protection Agency, shall establish regulations for
determining adequate security measures for the geological
storage of carbon dioxide under subsection (a)(1)(B) such
that the carbon dioxide does not escape into the atmosphere.
Such term shall include storage at deep saline formations and
unminable coal seems under such conditions as the Secretary
may determine under such regulations.
``(3) Tertiary injectant.--The term `tertiary injectant'
has the same meaning as when used within section 193(b)(1).
``(4) Qualified enhanced oil or natural gas recovery
project.--The term `qualified enhanced oil or natural gas
recovery project' has the meaning given the term `qualified
enhanced oil recovery project' by section 43(c)(2), by
substituting `crude oil or natural gas' for `crude oil' in
subparagraph (A)(i) thereof.
``(5) Credit attributable to taxpayer.--Any credit under
this section shall be attributable to the person that
captures and physically or contractually ensures the disposal
of or the use as a tertiary injectant of the qualified carbon
dioxide, except to the extent provided in regulations
prescribed by the Secretary.
``(6) Recapture.--The Secretary shall, by regulations,
provide for recapturing the benefit of any credit allowable
under subsection (a) with respect to any qualified carbon
dioxide which ceases to be captured, disposed of, or used as
a tertiary injectant in a manner consistent with the
requirements of this section.
``(7) Inflation adjustment.--In the case of any taxable
year beginning in a calendar year after 2009, there shall be
substituted for each dollar amount contained in subsection
(a) an amount equal to the product of--
``(A) such dollar amount, multiplied by
``(B) the inflation adjustment factor for such calendar
year determined under section 43(b)(3)(B) for such calendar
year, determined by substituting `2008' for `1990'.
``(e) Application of Section.--The credit under this
section shall apply with respect to qualified carbon dioxide
before the end of the calendar year in which the Secretary,
in consultation with the Administrator of the Environmental
Protection Agency, certifies that 75,000,000 metric tons of
qualified carbon dioxide have been captured and disposed of
or used as a tertiary injectant.''.
(b) Conforming Amendment.--Section 38(b) (relating to
general business credit) is amended by striking ``plus'' at
the end of paragraph (32), by striking the period at the end
of paragraph (33) and inserting ``, plus'', and by adding at
the end of following new paragraph:
``(34) the carbon dioxide sequestration credit determined
under section 45Q(a).''.
(c) Clerical Amendment.--The table of sections for subpart
B of part IV of subchapter A of chapter 1 (relating to other
credits) is amended by adding at the end the following new
section:
``Sec. 45Q. Credit for carbon dioxide sequestration.''.
(d) Effective Date.--The amendments made by this section
shall apply to carbon dioxide captured after the date of the
enactment of this Act.
SEC. 116. CERTAIN INCOME AND GAINS RELATING TO INDUSTRIAL
SOURCE CARBON DIOXIDE TREATED AS QUALIFYING
INCOME FOR PUBLICLY TRADED PARTNERSHIPS.
(a) In General.--Subparagraph (E) of section 7704(d)(1)
(defining qualifying income) is amended by inserting ``or
industrial source carbon dioxide'' after ``timber)''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of the enactment of this Act,
in taxable years ending after such date.
SEC. 117. CARBON AUDIT OF THE TAX CODE.
(a) Study.--The Secretary of the Treasury shall enter into
an agreement with the National Academy of Sciences to
undertake a comprehensive review of the Internal Revenue Code
of 1986 to identify the types of and specific tax provisions
that have the largest effects on carbon and other greenhouse
gas emissions and to estimate the magnitude of those effects.
(b) Report.--Not later than 2 years after the date of
enactment of this Act, the National Academy of Sciences shall
submit to Congress a report containing the results of study
authorized under this section.
(c) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $1,500,000 for
the period of fiscal years 2009 and 2010.
TITLE II--TRANSPORTATION AND DOMESTIC FUEL SECURITY PROVISIONS
SEC. 201. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS
DEPRECIATION FOR BIOMASS ETHANOL PLANT
PROPERTY.
(a) In General.--Paragraph (3) of section 168(l) is amended
to read as follows:
``(3) Cellulosic biofuel.--The term `cellulosic biofuel'
means any liquid fuel which is produced from any
lignocellulosic or hemicellulosic matter that is available on
a renewable or recurring basis.''.
(b) Conforming Amendments.--Subsection (l) of section 168
is amended--
(1) by striking ``cellulosic biomass ethanol'' each place
it appears and inserting ``cellulosic biofuel'',
(2) by striking ``Cellulosic Biomass Ethanol'' in the
heading of such subsection and inserting ``Cellulosic
Biofuel'', and
(3) by striking ``cellulosic biomass ethanol'' in the
heading of paragraph (2) thereof and inserting ``cellulosic
biofuel''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act, in taxable years ending after such
date.
SEC. 202. CREDITS FOR BIODIESEL AND RENEWABLE DIESEL.
(a) In General.--Sections 40A(g), 6426(c)(6), and
6427(e)(5)(B) are each amended by striking ``December 31,
2008'' and inserting ``December 31, 2009''.
(b) Increase in Rate of Credit.--
(1) Income tax credit.--Paragraphs (1)(A) and (2)(A) of
section 40A(b) are each amended by striking ``50 cents'' and
inserting ``$1.00''.
(2) Excise tax credit.--Paragraph (2) of section 6426(c) is
amended to read as follows:
``(2) Applicable amount.--For purposes of this subsection,
the applicable amount is $1.00.''.
(3) Conforming amendments.--
(A) Subsection (b) of section 40A is amended by striking
paragraph (3) and by redesignating paragraphs (4) and (5) as
paragraphs (3) and (4), respectively.
(B) Paragraph (2) of section 40A(f) is amended to read as
follows:
``(2) Exception.--Subsection (b)(4) shall not apply with
respect to renewable diesel.''.
(C) Paragraphs (2) and (3) of section 40A(e) are each
amended by striking ``subsection (b)(5)(C)'' and inserting
``subsection (b)(4)(C)''.
(D) Clause (ii) of section 40A(d)(3)(C) is amended by
striking ``subsection (b)(5)(B)'' and inserting ``subsection
(b)(4)(B)''.
(c) Uniform Treatment of Diesel Produced From Biomass.--
Paragraph (3) of section 40A(f) is amended--
(1) by striking ``diesel fuel'' and inserting ``liquid
fuel'',
(2) by striking ``using a thermal depolymerization
process'', and
(3) by inserting ``, or other equivalent standard approved
by the Secretary'' after ``D396''.
(d) Coproduction of Renewable Diesel With Petroleum
Feedstock.--
(1) In general.--Paragraph (3) of section 40A(f) is amended
by adding at the end the following new sentences: ``Such term
does not include any fuel derived from coprocessing biomass
with a feedstock which is not biomass. For purposes of this
paragraph, the term `biomass' has the meaning given such term
by section 45K(c)(3).''.
(2) Conforming amendment.--Paragraph (3) of section 40A(f)
is amended by striking ``(as defined in section 45K(c)(3))''.
(e) Eligibility of Certain Aviation Fuel.--Subsection (f)
of section 40A (relating to renewable diesel) is amended by
adding at the end the following new paragraph:
``(4) Certain aviation fuel.--
``(A) In general.--Except as provided in the last 3
sentences of paragraph (3), the
[[Page 23683]]
term `renewable diesel' shall include fuel derived from
biomass which meets the requirements of a Department of
Defense specification for military jet fuel or an American
Society of Testing and Materials specification for aviation
turbine fuel.
``(B) Application of mixture credits.--In the case of fuel
which is treated as renewable diesel solely by reason of
subparagraph (A), subsection (b)(1) and section 6426(c) shall
be applied with respect to such fuel by treating kerosene as
though it were diesel fuel.''.
(f) Modification Relating to Definition of Agri-
Biodiesel.--Paragraph (2) of section 40A(d) (relating to
agri-biodiesel) is amended by striking ``and mustard seeds''
and inserting ``mustard seeds, and camelina''.
(g) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to fuel produced, and sold or used, after December 31, 2008.
(2) Coproduction of renewable diesel with petroleum
feedstock.--The amendment made by subsection (d) shall apply
to fuel produced, and sold or used, after the date of the
enactment of this Act.
SEC. 203. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO
PROVIDE AN INCENTIVE FOR UNITED STATES
PRODUCTION.
(a) Alcohol Fuels Credit.--Subsection (d) of section 40 is
amended by adding at the end the following new paragraph:
``(7) Limitation to alcohol with connection to the united
states.--No credit shall be determined under this section
with respect to any alcohol which is produced outside the
United States for use as a fuel outside the United States.
For purposes of this paragraph, the term `United States'
includes any possession of the United States.''.
(b) Biodiesel Fuels Credit.--Subsection (d) of section 40A
is amended by adding at the end the following new paragraph:
``(5) Limitation to biodiesel with connection to the united
states.--No credit shall be determined under this section
with respect to any biodiesel which is produced outside the
United States for use as a fuel outside the United States.
For purposes of this paragraph, the term `United States'
includes any possession of the United States.''.
(c) Excise Tax Credit.--
(1) In general.--Section 6426 is amended by adding at the
end the following new subsection:
``(i) Limitation to Fuels With Connection to the United
States.--
``(1) Alcohol.--No credit shall be determined under this
section with respect to any alcohol which is produced outside
the United States for use as a fuel outside the United
States.
``(2) Biodiesel and alternative fuels.--No credit shall be
determined under this section with respect to any biodiesel
or alternative fuel which is produced outside the United
States for use as a fuel outside the United States.
For purposes of this subsection, the term `United States'
includes any possession of the United States.''.
(2) Conforming amendment.--Subsection (e) of section 6427
is amended by redesignating paragraph (5) as paragraph (6)
and by inserting after paragraph (4) the following new
paragraph:
``(5) Limitation to fuels with connection to the united
states.--No amount shall be payable under paragraph (1) or
(2) with respect to any mixture or alternative fuel if credit
is not allowed with respect to such mixture or alternative
fuel by reason of section 6426(i).''.
(d) Effective Date.--The amendments made by this section
shall apply to claims for credit or payment made on or after
May 15, 2008.
SEC. 204. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL
CREDIT.
(a) Extension.--
(1) Alternative fuel credit.--Paragraph (4) of section
6426(d) (relating to alternative fuel credit) is amended by
striking ``September 30, 2009'' and inserting ``December 31,
2009''.
(2) Alternative fuel mixture credit.--Paragraph (3) of
section 6426(e) (relating to alternative fuel mixture credit)
is amended by striking ``September 30, 2009'' and inserting
``December 31, 2009''.
(3) Payments.--Subparagraph (C) of section 6427(e)(5)
(relating to termination) is amended by striking ``September
30, 2009'' and inserting ``December 31, 2009''.
(b) Modifications.--
(1) Alternative fuel to include compressed or liquified
biomass gas.--Paragraph (2) of section 6426(d) (relating to
alternative fuel credit) is amended by striking ``and'' at
the end of subparagraph (E), by redesignating subparagraph
(F) as subparagraph (G), and by inserting after subparagraph
(E) the following new subparagraph:
``(F) compressed or liquefied gas derived from biomass (as
defined in section 45K(c)(3)), and''.
(2) Credit allowed for aviation use of fuel.--Paragraph (1)
of section 6426(d) is amended by inserting ``sold by the
taxpayer for use as a fuel in aviation,'' after
``motorboat,''.
(c) Carbon Capture Requirement for Certain Fuels.--
(1) In general.--Subsection (d) of section 6426, as amended
by subsection (a), is amended by redesignating paragraph (4)
as paragraph (5) and by inserting after paragraph (3) the
following new paragraph:
``(4) Carbon capture requirement.--
``(A) In general.--The requirements of this paragraph are
met if the fuel is certified, under such procedures as
required by the Secretary, as having been derived from coal
produced at a gasification facility which separates and
sequesters not less than the applicable percentage of such
facility's total carbon dioxide emissions.
``(B) Applicable percentage.--For purposes of subparagraph
(A), the applicable percentage is--
``(i) 50 percent in the case of fuel produced after
September 30, 2009, and on or before December 30, 2009, and
``(ii) 75 percent in the case of fuel produced after
December 30, 2009.''.
(2) Conforming amendment.--Subparagraph (E) of section
6426(d)(2) is amended by inserting ``which meets the
requirements of paragraph (4) and which is'' after ``any
liquid fuel''.
(d) Effective Date.--The amendments made by this section
shall apply to fuel sold or used after the date of the
enactment of this Act.
SEC. 205. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE
MOTOR VEHICLES.
(a) Plug-in Electric Drive Motor Vehicle Credit.--Subpart B
of part IV of subchapter A of chapter 1 (relating to other
credits) is amended by adding at the end the following new
section:
``SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR
VEHICLES.
``(a) Allowance of Credit.--
``(1) In general.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year
an amount equal to the applicable amount with respect to each
new qualified plug-in electric drive motor vehicle placed in
service by the taxpayer during the taxable year.
``(2) Applicable amount.--For purposes of paragraph (1),
the applicable amount is sum of--
``(A) $2,500, plus
``(B) $417 for each kilowatt hour of traction battery
capacity in excess of 4 kilowatt hours.
``(b) Limitations.--
``(1) Limitation based on weight.--The amount of the credit
allowed under subsection (a) by reason of subsection (a)(2)
shall not exceed--
``(A) $7,500, in the case of any new qualified plug-in
electric drive motor vehicle with a gross vehicle weight
rating of not more than 10,000 pounds,
``(B) $10,000, in the case of any new qualified plug-in
electric drive motor vehicle with a gross vehicle weight
rating of more than 10,000 pounds but not more than 14,000
pounds,
``(C) $12,500, in the case of any new qualified plug-in
electric drive motor vehicle with a gross vehicle weight
rating of more than 14,000 pounds but not more than 26,000
pounds, and
``(D) $15,000, in the case of any new qualified plug-in
electric drive motor vehicle with a gross vehicle weight
rating of more than 26,000 pounds.
``(2) Limitation on number of passenger vehicles and light
trucks eligible for credit.--
``(A) In general.--In the case of a new qualified plug-in
electric drive motor vehicle sold during the phaseout period,
only the applicable percentage of the credit otherwise
allowable under subsection (a) shall be allowed.
``(B) Phaseout period.--For purposes of this subsection,
the phaseout period is the period beginning with the second
calendar quarter following the calendar quarter which
includes the first date on which the total number of such new
qualified plug-in electric drive motor vehicles sold for use
in the United States after December 31, 2008, is at least
250,000.
``(C) Applicable percentage.--For purposes of subparagraph
(A), the applicable percentage is--
``(i) 50 percent for the first 2 calendar quarters of the
phaseout period,
``(ii) 25 percent for the 3d and 4th calendar quarters of
the phaseout period, and
``(iii) 0 percent for each calendar quarter thereafter.
``(D) Controlled groups.--Rules similar to the rules of
section 30B(f)(4) shall apply for purposes of this
subsection.
``(c) New Qualified Plug-in Electric Drive Motor Vehicle.--
For purposes of this section, the term `new qualified plug-in
electric drive motor vehicle' means a motor vehicle--
``(1) which draws propulsion using a traction battery with
at least 4 kilowatt hours of capacity,
``(2) which uses an offboard source of energy to recharge
such battery,
``(3) which, in the case of a passenger vehicle or light
truck which has a gross vehicle weight rating of not more
than 8,500 pounds, has received a certificate of conformity
under the Clean Air Act and meets or exceeds the equivalent
qualifying California low emission vehicle standard under
section 243(e)(2) of the Clean Air Act for that make and
model year, and
[[Page 23684]]
``(A) in the case of a vehicle having a gross vehicle
weight rating of 6,000 pounds or less, the Bin 5 Tier II
emission standard established in regulations prescribed by
the Administrator of the Environmental Protection Agency
under section 202(i) of the Clean Air Act for that make and
model year vehicle, and
``(B) in the case of a vehicle having a gross vehicle
weight rating of more than 6,000 pounds but not more than
8,500 pounds, the Bin 8 Tier II emission standard which is so
established,
``(4) the original use of which commences with the
taxpayer,
``(5) which is acquired for use or lease by the taxpayer
and not for resale, and
``(6) which is made by a manufacturer.
``(d) Application With Other Credits.--
``(1) Business credit treated as part of general business
credit.--So much of the credit which would be allowed under
subsection (a) for any taxable year (determined without
regard to this subsection) that is attributable to property
of a character subject to an allowance for depreciation shall
be treated as a credit listed in section 38(b) for such
taxable year (and not allowed under subsection (a)).
``(2) Personal credit.--
``(A) In general.--For purposes of this title, the credit
allowed under subsection (a) for any taxable year (determined
after application of paragraph (1)) shall be treated as a
credit allowable under subpart A for such taxable year.
``(B) Limitation based on amount of tax.--In the case of a
taxable year to which section 26(a)(2) does not apply, the
credit allowed under subsection (a) for any taxable year
(determined after application of paragraph (1)) shall not
exceed the excess of--
``(i) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(ii) the sum of the credits allowable under subpart A
(other than this section and sections 23 and 25D) and section
27 for the taxable year.
``(e) Other Definitions and Special Rules.--For purposes of
this section--
``(1) Motor vehicle.--The term `motor vehicle' has the
meaning given such term by section 30(c)(2).
``(2) Other terms.--The terms `passenger automobile',
`light truck', and `manufacturer' have the meanings given
such terms in regulations prescribed by the Administrator of
the Environmental Protection Agency for purposes of the
administration of title II of the Clean Air Act (42 U.S.C.
7521 et seq.).
``(3) Traction battery capacity.--Traction battery capacity
shall be measured in kilowatt hours from a 100 percent state
of charge to a zero percent state of charge.
``(4) Reduction in basis.--For purposes of this subtitle,
the basis of any property for which a credit is allowable
under subsection (a) shall be reduced by the amount of such
credit so allowed.
``(5) No double benefit.--The amount of any deduction or
other credit allowable under this chapter for a new qualified
plug-in electric drive motor vehicle shall be reduced by the
amount of credit allowed under subsection (a) for such
vehicle for the taxable year.
``(6) Property used by tax-exempt entity.--In the case of a
vehicle the use of which is described in paragraph (3) or (4)
of section 50(b) and which is not subject to a lease, the
person who sold such vehicle to the person or entity using
such vehicle shall be treated as the taxpayer that placed
such vehicle in service, but only if such person clearly
discloses to such person or entity in a document the amount
of any credit allowable under subsection (a) with respect to
such vehicle (determined without regard to subsection
(b)(2)).
``(7) Property used outside united states, etc., not
qualified.--No credit shall be allowable under subsection (a)
with respect to any property referred to in section 50(b)(1)
or with respect to the portion of the cost of any property
taken into account under section 179.
``(8) Recapture.--The Secretary shall, by regulations,
provide for recapturing the benefit of any credit allowable
under subsection (a) with respect to any property which
ceases to be property eligible for such credit (including
recapture in the case of a lease period of less than the
economic life of a vehicle).
``(9) Election to not take credit.--No credit shall be
allowed under subsection (a) for any vehicle if the taxpayer
elects not to have this section apply to such vehicle.
``(10) Interaction with air quality and motor vehicle
safety standards.--Unless otherwise provided in this section,
a motor vehicle shall not be considered eligible for a credit
under this section unless such vehicle is in compliance
with--
``(A) the applicable provisions of the Clean Air Act for
the applicable make and model year of the vehicle (or
applicable air quality provisions of State law in the case of
a State which has adopted such provision under a waiver under
section 209(b) of the Clean Air Act), and
``(B) the motor vehicle safety provisions of sections 30101
through 30169 of title 49, United States Code.
``(f) Regulations.--
``(1) In general.--Except as provided in paragraph (2), the
Secretary shall promulgate such regulations as necessary to
carry out the provisions of this section.
``(2) Coordination in prescription of certain
regulations.--The Secretary of the Treasury, in coordination
with the Secretary of Transportation and the Administrator of
the Environmental Protection Agency, shall prescribe such
regulations as necessary to determine whether a motor vehicle
meets the requirements to be eligible for a credit under this
section.
``(g) Termination.--This section shall not apply to
property purchased after December 31, 2014.''.
(b) Coordination With Alternative Motor Vehicle Credit.--
Section 30B(d)(3) is amended by adding at the end the
following new subparagraph:
``(D) Exclusion of plug-in vehicles.--Any vehicle with
respect to which a credit is allowable under section 30D
(determined without regard to subsection (d) thereof) shall
not be taken into account under this section.''.
(c) Credit Made Part of General Business Credit.--Section
38(b), as amended by this Act, is amended by striking
``plus'' at the end of paragraph (33), by striking the period
at the end of paragraph (34) and inserting ``plus'', and by
adding at the end the following new paragraph:
``(35) the portion of the new qualified plug-in electric
drive motor vehicle credit to which section 30D(d)(1)
applies.''.
(d) Conforming Amendments.--
(1)(A) Section 24(b)(3)(B), as amended by section 106, is
amended by striking ``and 25D'' and inserting ``25D, and
30D''.
(B) Section 25(e)(1)(C)(ii) is amended by inserting
``30D,'' after ``25D,''.
(C) Section 25B(g)(2), as amended by section 106, is
amended by striking ``and 25D'' and inserting ``, 25D, and
30D''.
(D) Section 26(a)(1), as amended by section 106, is amended
by striking ``and 25D'' and inserting ``25D, and 30D''.
(E) Section 1400C(d)(2) is amended by striking ``and 25D''
and inserting ``25D, and 30D''.
(2) Section 1016(a) is amended by striking ``and'' at the
end of paragraph (35), by striking the period at the end of
paragraph (36) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(37) to the extent provided in section 30D(e)(4).''.
(3) Section 6501(m) is amended by inserting ``30D(e)(9),''
after ``30C(e)(5),''.
(4) The table of sections for subpart B of part IV of
subchapter A of chapter 1 is amended by adding at the end the
following new item:
``Sec. 30D. New qualified plug-in electric drive motor vehicles.''.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.
(f) Application of EGTRRA Sunset.--The amendment made by
subsection (d)(1)(A) shall be subject to title IX of the
Economic Growth and Tax Relief Reconciliation Act of 2001 in
the same manner as the provision of such Act to which such
amendment relates.
SEC. 206. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING REDUCTION
UNITS AND ADVANCED INSULATION.
(a) In General.--Section 4053 is amended by adding at the
end the following new paragraphs:
``(9) Idling reduction device.--Any device or system of
devices which--
``(A) is designed to provide to a vehicle those services
(such as heat, air conditioning, or electricity) that would
otherwise require the operation of the main drive engine
while the vehicle is temporarily parked or remains stationary
using one or more devices affixed to a tractor, and
``(B) is determined by the Administrator of the
Environmental Protection Agency, in consultation with the
Secretary of Energy and the Secretary of Transportation, to
reduce idling of such vehicle at a motor vehicle rest stop or
other location where such vehicles are temporarily parked or
remain stationary.
``(10) Advanced insulation.--Any insulation that has an R
value of not less than R35 per inch.''.
(b) Effective Date.--The amendment made by this section
shall apply to sales or installations after the date of the
enactment of this Act.
SEC. 207. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.
(a) Extension of Credit.--Paragraph (2) of section 30C(g)
is amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Inclusion of Electricity as a Clean-Burning Fuel.--
Section 30C(c)(2) is amended by adding at the end the
following new subparagraph:
``(C) Electricity.''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act, in taxable years ending after such
date.
[[Page 23685]]
SEC. 208. CERTAIN INCOME AND GAINS RELATING TO ALCOHOL FUELS
AND MIXTURES, BIODIESEL FUELS AND MIXTURES, AND
ALTERNATIVE FUELS AND MIXTURES TREATED AS
QUALIFYING INCOME FOR PUBLICLY TRADED
PARTNERSHIPS.
(a) In General.--Subparagraph (E) of section 7704(d)(1), as
amended by this Act, is amended by striking ``or industrial
source carbon dioxide'' and inserting ``, industrial source
carbon dioxide, or the transportation or storage of any fuel
described in subsection (b), (c), (d), or (e) of section
6426, or any alcohol fuel defined in section 6426(b)(4)(A) or
any biodiesel fuel as defined in section 40A(d)(1)'' after
``timber)''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of the enactment of this Act,
in taxable years ending after such date.
SEC. 209. EXTENSION AND MODIFICATION OF ELECTION TO EXPENSE
CERTAIN REFINERIES.
(a) Extension.--Paragraph (1) of section 179C(c) (relating
to qualified refinery property) is amended--
(1) by striking ``January 1, 2012'' in subparagraph (B) and
inserting ``January 1, 2014'', and
(2) by striking ``January 1, 2008'' each place it appears
in subparagraph (F) and inserting ``January 1, 2010''.
(b) Inclusion of Fuel Derived From Shale and Tar Sands.--
(1) In general.--Subsection (d) of section 179C is amended
by inserting ``, or directly from shale or tar sands'' after
``(as defined in section 45K(c))''.
(2) Conforming amendment.--Paragraph (2) of section 179C(e)
is amended by inserting ``shale, tar sands, or'' before
``qualified fuels''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act.
SEC. 210. EXTENSION OF SUSPENSION OF TAXABLE INCOME LIMIT ON
PERCENTAGE DEPLETION FOR OIL AND NATURAL GAS
PRODUCED FROM MARGINAL PROPERTIES.
Subparagraph (H) of section 613A(c)(6) (relating to oil and
gas produced from marginal properties) is amended by striking
``for any taxable year'' and all that follows and inserting
``for any taxable year--
``(i) beginning after December 31, 1997, and before January
1, 2008, or
``(ii) beginning after December 31, 2008, and before
January 1, 2010.''.
SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS.
(a) In General.--Paragraph (1) of section 132(f) is amended
by adding at the end the following:
``(D) Any qualified bicycle commuting reimbursement.''.
(b) Limitation on Exclusion.--Paragraph (2) of section
132(f) is amended by striking ``and'' at the end of
subparagraph (A), by striking the period at the end of
subparagraph (B) and inserting ``, and'', and by adding at
the end the following new subparagraph:
``(C) the applicable annual limitation in the case of any
qualified bicycle commuting reimbursement.''.
(c) Definitions.--Paragraph (5) of section 132(f) is
amended by adding at the end the following:
``(F) Definitions related to bicycle commuting
reimbursement.--
``(i) Qualified bicycle commuting reimbursement.--The term
`qualified bicycle commuting reimbursement' means, with
respect to any calendar year, any employer reimbursement
during the 15-month period beginning with the first day of
such calendar year for reasonable expenses incurred by the
employee during such calendar year for the purchase of a
bicycle and bicycle improvements, repair, and storage, if
such bicycle is regularly used for travel between the
employee's residence and place of employment.
``(ii) Applicable annual limitation.--The term `applicable
annual limitation' means, with respect to any employee for
any calendar year, the product of $20 multiplied by the
number of qualified bicycle commuting months during such
year.
``(iii) Qualified bicycle commuting month.--The term
`qualified bicycle commuting month' means, with respect to
any employee, any month during which such employee--
``(I) regularly uses the bicycle for a substantial portion
of the travel between the employee's residence and place of
employment, and
``(II) does not receive any benefit described in
subparagraph (A), (B), or (C) of paragraph (1).''.
(d) Constructive Receipt of Benefit.--Paragraph (4) of
section 132(f) is amended by inserting ``(other than a
qualified bicycle commuting reimbursement)'' after
``qualified transportation fringe''.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.
TITLE III--ENERGY CONSERVATION AND EFFICIENCY PROVISIONS
SEC. 301. QUALIFIED ENERGY CONSERVATION BONDS.
(a) In General.--Subpart I of part IV of subchapter A of
chapter 1, as amended by section 107, is amended by adding at
the end the following new section:
``SEC. 54D. QUALIFIED ENERGY CONSERVATION BONDS.
``(a) Qualified Energy Conservation Bond.--For purposes of
this subchapter, the term `qualified energy conservation
bond' means any bond issued as part of an issue if--
``(1) 100 percent of the available project proceeds of such
issue are to be used for one or more qualified conservation
purposes,
``(2) the bond is issued by a State or local government,
and
``(3) the issuer designates such bond for purposes of this
section.
``(b) Reduced Credit Amount.--The annual credit determined
under section 54A(b) with respect to any qualified energy
conservation bond shall be 70 percent of the amount so
determined without regard to this subsection.
``(c) Limitation on Amount of Bonds Designated.--The
maximum aggregate face amount of bonds which may be
designated under subsection (a) by any issuer shall not
exceed the limitation amount allocated to such issuer under
subsection (e).
``(d) National Limitation on Amount of Bonds Designated.--
There is a national qualified energy conservation bond
limitation of $800,000,000.
``(e) Allocations.--
``(1) In general.--The limitation applicable under
subsection (d) shall be allocated by the Secretary among the
States in proportion to the population of the States.
``(2) Allocations to largest local governments.--
``(A) In general.--In the case of any State in which there
is a large local government, each such local government shall
be allocated a portion of such State's allocation which bears
the same ratio to the State's allocation (determined without
regard to this subparagraph) as the population of such large
local government bears to the population of such State.
``(B) Allocation of unused limitation to state.--The amount
allocated under this subsection to a large local government
may be reallocated by such local government to the State in
which such local government is located.
``(C) Large local government.--For purposes of this
section, the term `large local government' means any
municipality or county if such municipality or county has a
population of 100,000 or more.
``(3) Allocation to issuers; restriction on private
activity bonds.--Any allocation under this subsection to a
State or large local government shall be allocated by such
State or large local government to issuers within the State
in a manner that results in not less than 70 percent of the
allocation to such State or large local government being used
to designate bonds which are not private activity bonds.
``(f) Qualified Conservation Purpose.--For purposes of this
section--
``(1) In general.--The term `qualified conservation
purpose' means any of the following:
``(A) Capital expenditures incurred for purposes of--
``(i) reducing energy consumption in publicly-owned
buildings by at least 20 percent,
``(ii) implementing green community programs,
``(iii) rural development involving the production of
electricity from renewable energy resources, or
``(iv) any qualified facility (as determined under section
45(d) without regard to paragraphs (8) and (10) thereof and
without regard to any placed in service date).
``(B) Expenditures with respect to research facilities, and
research grants, to support research in--
``(i) development of cellulosic ethanol or other nonfossil
fuels,
``(ii) technologies for the capture and sequestration of
carbon dioxide produced through the use of fossil fuels,
``(iii) increasing the efficiency of existing technologies
for producing nonfossil fuels,
``(iv) automobile battery technologies and other
technologies to reduce fossil fuel consumption in
transportation, or
``(v) technologies to reduce energy use in buildings.
``(C) Mass commuting facilities and related facilities that
reduce the consumption of energy, including expenditures to
reduce pollution from vehicles used for mass commuting.
``(D) Demonstration projects designed to promote the
commercialization of--
``(i) green building technology,
``(ii) conversion of agricultural waste for use in the
production of fuel or otherwise,
``(iii) advanced battery manufacturing technologies,
``(iv) technologies to reduce peak use of electricity, or
``(v) technologies for the capture and sequestration of
carbon dioxide emitted from combusting fossil fuels in order
to produce electricity.
``(E) Public education campaigns to promote energy
efficiency.
``(2) Special rules for private activity bonds.--For
purposes of this section, in the case of any private activity
bond, the term `qualified conservation purposes' shall not
include any expenditure which is not a capital expenditure.
[[Page 23686]]
``(g) Population.--
``(1) In general.--The population of any State or local
government shall be determined for purposes of this section
as provided in section 146(j) for the calendar year which
includes the date of the enactment of this section.
``(2) Special rule for counties.--In determining the
population of any county for purposes of this section, any
population of such county which is taken into account in
determining the population of any municipality which is a
large local government shall not be taken into account in
determining the population of such county.
``(h) Application to Indian Tribal Governments.--An Indian
tribal government shall be treated for purposes of this
section in the same manner as a large local government,
except that--
``(1) an Indian tribal government shall be treated for
purposes of subsection (e) as located within a State to the
extent of so much of the population of such government as
resides within such State, and
``(2) any bond issued by an Indian tribal government shall
be treated as a qualified energy conservation bond only if
issued as part of an issue the available project proceeds of
which are used for purposes for which such Indian tribal
government could issue bonds to which section 103(a)
applies.''.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 54A(d), as amended by this
Act, is amended to read as follows:
``(1) Qualified tax credit bond.--The term `qualified tax
credit bond' means--
``(A) a qualified forestry conservation bond,
``(B) a new clean renewable energy bond, or
``(C) a qualified energy conservation bond,
which is part of an issue that meets requirements of
paragraphs (2), (3), (4), (5), and (6).''.
(2) Subparagraph (C) of section 54A(d)(2), as amended by
this Act, is amended to read as follows:
``(C) Qualified purpose.--For purposes of this paragraph,
the term `qualified purpose' means--
``(i) in the case of a qualified forestry conservation
bond, a purpose specified in section 54B(e),
``(ii) in the case of a new clean renewable energy bond, a
purpose specified in section 54C(a)(1), and
``(iii) in the case of a qualified energy conservation
bond, a purpose specified in section 54D(a)(1).''.
(3) The table of sections for subpart I of part IV of
subchapter A of chapter 1, as amended by this Act, is amended
by adding at the end the following new item:
``Sec. 54D. Qualified energy conservation bonds.''.
(c) Effective Date.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.
SEC. 302. CREDIT FOR NONBUSINESS ENERGY PROPERTY.
(a) Extension of Credit.--Section 25C(g) is amended by
striking ``placed in service after December 31, 2007'' and
inserting ``placed in service--
``(1) after December 31, 2007, and before January 1, 2009,
or
``(2) after December 31, 2009.''.
(b) Qualified Biomass Fuel Property.--
(1) In general.--Section 25C(d)(3) is amended--
(A) by striking ``and'' at the end of subparagraph (D),
(B) by striking the period at the end of subparagraph (E)
and inserting ``, and'', and
(C) by adding at the end the following new subparagraph:
``(F) a stove which uses the burning of biomass fuel to
heat a dwelling unit located in the United States and used as
a residence by the taxpayer, or to heat water for use in such
a dwelling unit, and which has a thermal efficiency rating of
at least 75 percent.''.
(2) Biomass fuel.--Section 25C(d) is amended by adding at
the end the following new paragraph:
``(6) Biomass fuel.--The term `biomass fuel' means any
plant-derived fuel available on a renewable or recurring
basis, including agricultural crops and trees, wood and wood
waste and residues (including wood pellets), plants
(including aquatic plants), grasses, residues, and fibers.''.
(c) Modification of Water Heater Requirements.--Section
25C(d)(3)(E) is amended by inserting ``or a thermal
efficiency of at least 90 percent'' after ``0.80''.
(d) Coordination With Credit for Qualified Geothermal Heat
pump Property Expenditures.--
(1) In general.--Paragraph (3) of section 25C(d), as
amended by subsections (b) and (c), is amended by striking
subparagraph (C) and by redesignating subparagraphs (D), (E),
and (F) as subparagraphs (C), (D), and (E), respectively.
(2) Conforming amendment.--Subparagraph (C) of section
25C(d)(2) is amended to read as follows:
``(C) Requirements and standards for air conditioners and
heat pumps.--The standards and requirements prescribed by the
Secretary under subparagraph (B) with respect to the energy
efficiency ratio (EER) for central air conditioners and
electric heat pumps--
``(i) shall require measurements to be based on published
data which is tested by manufacturers at 95 degrees
Fahrenheit, and
``(ii) may be based on the certified data of the Air
Conditioning and Refrigeration Institute that are prepared in
partnership with the Consortium for Energy Efficiency.''.
(e) Modification of Qualified Energy Efficiency
Improvements.--
(1) In general.--Paragraph (1) of section 25C(c) is amended
by inserting ``, or an asphalt roof with appropriate cooling
granules,'' before ``which meet the Energy Star program
requirements''.
(2) Building envelope component.--Subparagraph (D) of
section 25C(c)(2) is amended--
(A) by inserting ``or asphalt roof'' after ``metal roof'',
and
(B) by inserting ``or cooling granules'' after ``pigmented
coatings''.
(f) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made this section shall apply to expenditures made
after December 31, 2008.
(2) Modification of qualified energy efficiency
improvements.--The amendments made by subsection (e) shall
apply to property placed in service after the date of the
enactment of this Act.
SEC. 303. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.
Subsection (h) of section 179D is amended by striking
``December 31, 2008'' and inserting ``December 31, 2013''.
SEC. 304. NEW ENERGY EFFICIENT HOME CREDIT.
Subsection (g) of section 45L (relating to termination) is
amended by striking ``December 31, 2008'' and inserting
``December 31, 2009''.
SEC. 305. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT
FOR APPLIANCES PRODUCED AFTER 2007.
(a) In General.--Subsection (b) of section 45M is amended
to read as follows:
``(b) Applicable Amount.--For purposes of subsection (a)--
``(1) Dishwashers.--The applicable amount is--
``(A) $45 in the case of a dishwasher which is manufactured
in calendar year 2008 or 2009 and which uses no more than 324
kilowatt hours per year and 5.8 gallons per cycle, and
``(B) $75 in the case of a dishwasher which is manufactured
in calendar year 2008, 2009, or 2010 and which uses no more
than 307 kilowatt hours per year and 5.0 gallons per cycle
(5.5 gallons per cycle for dishwashers designed for greater
than 12 place settings).
``(2) Clothes washers.--The applicable amount is--
``(A) $75 in the case of a residential top-loading clothes
washer manufactured in calendar year 2008 which meets or
exceeds a 1.72 modified energy factor and does not exceed a
8.0 water consumption factor,
``(B) $125 in the case of a residential top-loading clothes
washer manufactured in calendar year 2008 or 2009 which meets
or exceeds a 1.8 modified energy factor and does not exceed a
7.5 water consumption factor,
``(C) $150 in the case of a residential or commercial
clothes washer manufactured in calendar year 2008, 2009, or
2010 which meets or exceeds 2.0 modified energy factor and
does not exceed a 6.0 water consumption factor, and
``(D) $250 in the case of a residential or commercial
clothes washer manufactured in calendar year 2008, 2009, or
2010 which meets or exceeds 2.2 modified energy factor and
does not exceed a 4.5 water consumption factor.
``(3) Refrigerators.--The applicable amount is--
``(A) $50 in the case of a refrigerator which is
manufactured in calendar year 2008, and consumes at least 20
percent but not more than 22.9 percent less kilowatt hours
per year than the 2001 energy conservation standards,
``(B) $75 in the case of a refrigerator which is
manufactured in calendar year 2008 or 2009, and consumes at
least 23 percent but no more than 24.9 percent less kilowatt
hours per year than the 2001 energy conservation standards,
``(C) $100 in the case of a refrigerator which is
manufactured in calendar year 2008, 2009, or 2010, and
consumes at least 25 percent but not more than 29.9 percent
less kilowatt hours per year than the 2001 energy
conservation standards, and
``(D) $200 in the case of a refrigerator manufactured in
calendar year 2008, 2009, or 2010 and which consumes at least
30 percent less energy than the 2001 energy conservation
standards.''.
(b) Eligible Production.--
(1) Similar treatment for all appliances.--Subsection (c)
of section 45M is amended--
(A) by striking paragraph (2),
(B) by striking ``(1) In general'' and all that follows
through ``the eligible'' and inserting ``The eligible'',
(C) by moving the text of such subsection in line with the
subsection heading, and
(D) by redesignating subparagraphs (A) and (B) as
paragraphs (1) and (2), respectively, and by moving such
paragraphs 2 ems to the left.
(2) Modification of base period.--Paragraph (2) of section
45M(c), as amended by
[[Page 23687]]
paragraph (1), is amended by striking ``3-calendar year'' and
inserting ``2-calendar year''.
(c) Types of Energy Efficient Appliances.--Subsection (d)
of section 45M is amended to read as follows:
``(d) Types of Energy Efficient Appliance.--For purposes of
this section, the types of energy efficient appliances are--
``(1) dishwashers described in subsection (b)(1),
``(2) clothes washers described in subsection (b)(2), and
``(3) refrigerators described in subsection (b)(3).''.
(d) Aggregate Credit Amount Allowed.--
(1) Increase in limit.--Paragraph (1) of section 45M(e) is
amended to read as follows:
``(1) Aggregate credit amount allowed.--The aggregate
amount of credit allowed under subsection (a) with respect to
a taxpayer for any taxable year shall not exceed $75,000,000
reduced by the amount of the credit allowed under subsection
(a) to the taxpayer (or any predecessor) for all prior
taxable years beginning after December 31, 2007.''.
(2) Exception for certain refrigerator and clothes
washers.--Paragraph (2) of section 45M(e) is amended to read
as follows:
``(2) Amount allowed for certain refrigerators and clothes
washers.--Refrigerators described in subsection (b)(3)(D) and
clothes washers described in subsection (b)(2)(D) shall not
be taken into account under paragraph (1).''.
(e) Qualified Energy Efficient Appliances.--
(1) In general.--Paragraph (1) of section 45M(f) is amended
to read as follows:
``(1) Qualified energy efficient appliance.--The term
`qualified energy efficient appliance' means--
``(A) any dishwasher described in subsection (b)(1),
``(B) any clothes washer described in subsection (b)(2),
and
``(C) any refrigerator described in subsection (b)(3).''.
(2) Clothes washer.--Section 45M(f)(3) is amended by
inserting ``commercial'' before ``residential'' the second
place it appears.
(3) Top-loading clothes washer.--Subsection (f) of section
45M is amended by redesignating paragraphs (4), (5), (6), and
(7) as paragraphs (5), (6), (7), and (8), respectively, and
by inserting after paragraph (3) the following new paragraph:
``(4) Top-loading clothes washer.--The term `top-loading
clothes washer' means a clothes washer which has the clothes
container compartment access located on the top of the
machine and which operates on a vertical axis.''.
(4) Replacement of energy factor.--Section 45M(f)(6), as
redesignated by paragraph (3), is amended to read as follows:
``(6) Modified energy factor.--The term `modified energy
factor' means the modified energy factor established by the
Department of Energy for compliance with the Federal energy
conservation standard.''.
(5) Gallons per cycle; water consumption factor.--Section
45M(f), as amended by paragraph (3), is amended by adding at
the end the following:
``(9) Gallons per cycle.--The term `gallons per cycle'
means, with respect to a dishwasher, the amount of water,
expressed in gallons, required to complete a normal cycle of
a dishwasher.
``(10) Water consumption factor.--The term `water
consumption factor' means, with respect to a clothes washer,
the quotient of the total weighted per-cycle water
consumption divided by the cubic foot (or liter) capacity of
the clothes washer.''.
(f) Effective Date.--The amendments made by this section
shall apply to appliances produced after December 31, 2007.
SEC. 306. ACCELERATED RECOVERY PERIOD FOR DEPRECIATION OF
SMART METERS AND SMART GRID SYSTEMS.
(a) In General.--Section 168(e)(3)(D) is amended by
striking ``and'' at the end of clause (i), by striking the
period at the end of clause (ii) and inserting a comma, and
by inserting after clause (ii) the following new clauses:
``(iii) any qualified smart electric meter, and
``(iv) any qualified smart electric grid system.''.
(b) Definitions.--Section 168(i) is amended by inserting at
the end the following new paragraph:
``(18) Qualified smart electric meters.--
``(A) In general.--The term `qualified smart electric
meter' means any smart electric meter which--
``(i) is placed in service by a taxpayer who is a supplier
of electric energy or a provider of electric energy services,
and
``(ii) does not have a class life (determined without
regard to subsection (e)) of less than 10 years.
``(B) Smart electric meter.--For purposes of subparagraph
(A), the term `smart electric meter' means any time-based
meter and related communication equipment which is capable of
being used by the taxpayer as part of a system that--
``(i) measures and records electricity usage data on a
time-differentiated basis in at least 24 separate time
segments per day,
``(ii) provides for the exchange of information between
supplier or provider and the customer's electric meter in
support of time-based rates or other forms of demand
response,
``(iii) provides data to such supplier or provider so that
the supplier or provider can provide energy usage information
to customers electronically, and
``(iv) provides net metering.
``(19) Qualified smart electric grid systems.--
``(A) In general.--The term `qualified smart electric grid
system' means any smart grid property which--
``(i) is used as part of a system for electric distribution
grid communications, monitoring, and management placed in
service by a taxpayer who is a supplier of electric energy or
a provider of electric energy services, and
``(ii) does not have a class life (determined without
regard to subsection (e)) of less than 10 years.
``(B) Smart grid property.--For the purposes of
subparagraph (A), the term `smart grid property' means
electronics and related equipment that is capable of--
``(i) sensing, collecting, and monitoring data of or from
all portions of a utility's electric distribution grid,
``(ii) providing real-time, two-way communications to
monitor or manage such grid, and
``(iii) providing real time analysis of and event
prediction based upon collected data that can be used to
improve electric distribution system reliability, quality,
and performance.''.
(c) Continued Application of 150 Percent Declining Balance
Method.--Paragraph (2) of section 168(b) is amended by
striking ``or'' at the end of subparagraph (B), by
redesignating subparagraph (C) as subparagraph (D), and by
inserting after subparagraph (B) the following new
subparagraph:
``(C) any property (other than property described in
paragraph (3)) which is a qualified smart electric meter or
qualified smart electric grid system, or''.
(d) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act.
SEC. 307. QUALIFIED GREEN BUILDING AND SUSTAINABLE DESIGN
PROJECTS.
(a) In General.--Paragraph (8) of section 142(l) is amended
by striking ``September 30, 2009'' and inserting ``September
30, 2012''.
(b) Treatment of Current Refunding Bonds.--Paragraph (9) of
section 142(l) is amended by striking ``October 1, 2009'' and
inserting ``October 1, 2012''.
(c) Accountability.--The second sentence of section 701(d)
of the American Jobs Creation Act of 2004 is amended by
striking ``issuance,'' and inserting ``issuance of the last
issue with respect to such project,''.
SEC. 308. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN REUSE
AND RECYCLING PROPERTY.
(a) In General.--Section 168 is amended by adding at the
end the following new subsection:
``(m) Special Allowance for Certain Reuse and Recycling
Property.--
``(1) In general.--In the case of any qualified reuse and
recycling property--
``(A) the depreciation deduction provided by section 167(a)
for the taxable year in which such property is placed in
service shall include an allowance equal to 50 percent of the
adjusted basis of the qualified reuse and recycling property,
and
``(B) the adjusted basis of the qualified reuse and
recycling property shall be reduced by the amount of such
deduction before computing the amount otherwise allowable as
a depreciation deduction under this chapter for such taxable
year and any subsequent taxable year.
``(2) Qualified reuse and recycling property.--For purposes
of this subsection--
``(A) In general.--The term `qualified reuse and recycling
property' means any reuse and recycling property--
``(i) to which this section applies,
``(ii) which has a useful life of at least 5 years,
``(iii) the original use of which commences with the
taxpayer after August 31, 2008, and
``(iv) which is--
``(I) acquired by purchase (as defined in section
179(d)(2)) by the taxpayer after August 31, 2008, but only if
no written binding contract for the acquisition was in effect
before September 1, 2008, or
``(II) acquired by the taxpayer pursuant to a written
binding contract which was entered into after August 31,
2008.
``(B) Exceptions.--
``(i) Bonus depreciation property under subsection (k).--
The term `qualified reuse and recycling property' shall not
include any property to which section 168(k) applies.
``(ii) Alternative depreciation property.--The term
`qualified reuse and recycling property' shall not include
any property to which the alternative depreciation system
under subsection (g) applies, determined without regard to
paragraph (7) of subsection (g) (relating to election to have
system apply).
``(iii) Election out.--If a taxpayer makes an election
under this clause with respect to any class of property for
any taxable year, this subsection shall not apply to all
property in such class placed in service during such taxable
year.
[[Page 23688]]
``(C) Special rule for self-constructed property.--In the
case of a taxpayer manufacturing, constructing, or producing
property for the taxpayer's own use, the requirements of
clause (iv) of subparagraph (A) shall be treated as met if
the taxpayer begins manufacturing, constructing, or producing
the property after August 31, 2008.
``(D) Deduction allowed in computing minimum tax.--For
purposes of determining alternative minimum taxable income
under section 55, the deduction under subsection (a) for
qualified reuse and recycling property shall be determined
under this section without regard to any adjustment under
section 56.
``(3) Definitions.--For purposes of this subsection--
``(A) Reuse and recycling property.--
``(i) In general.--The term `reuse and recycling property'
means any machinery and equipment (not including buildings or
real estate), along with all appurtenances thereto, including
software necessary to operate such equipment, which is used
exclusively to collect, distribute, or recycle qualified
reuse and recyclable materials.
``(ii) Exclusion.--Such term does not include rolling stock
or other equipment used to transport reuse and recyclable
materials.
``(B) Qualified reuse and recyclable materials.--
``(i) In general.--The term `qualified reuse and recyclable
materials' means scrap plastic, scrap glass, scrap textiles,
scrap rubber, scrap packaging, recovered fiber, scrap ferrous
and nonferrous metals, or electronic scrap generated by an
individual or business.
``(ii) Electronic scrap.--For purposes of clause (i), the
term `electronic scrap' means--
``(I) any cathode ray tube, flat panel screen, or similar
video display device with a screen size greater than 4 inches
measured diagonally, or
``(II) any central processing unit.
``(C) Recycling or recycle.--The term `recycling' or
`recycle' means that process (including sorting) by which
worn or superfluous materials are manufactured or processed
into specification grade commodities that are suitable for
use as a replacement or substitute for virgin materials in
manufacturing tangible consumer and commercial products,
including packaging.''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after August 31,
2008.
TITLE IV--REVENUE PROVISIONS
SEC. 401. LIMITATION OF DEDUCTION FOR INCOME ATTRIBUTABLE TO
DOMESTIC PRODUCTION OF OIL, GAS, OR PRIMARY
PRODUCTS THEREOF.
(a) In General.--Section 199(d) is amended by redesignating
paragraph (9) as paragraph (10) and by inserting after
paragraph (8) the following new paragraph:
``(9) Special rule for taxpayers with oil related qualified
production activities income.--
``(A) In general.--If a taxpayer has oil related qualified
production activities income for any taxable year beginning
after 2009, the amount otherwise allowable as a deduction
under subsection (a) shall be reduced by 3 percent of the
least of--
``(i) the oil related qualified production activities
income of the taxpayer for the taxable year,
``(ii) the qualified production activities income of the
taxpayer for the taxable year, or
``(iii) taxable income (determined without regard to this
section).
``(B) Oil related qualified production activities income.--
For purposes of this paragraph, the term `oil related
qualified production activities income' means for any taxable
year the qualified production activities income which is
attributable to the production, refining, processing,
transportation, or distribution of oil, gas, or any primary
product thereof during such taxable year.
``(C) Primary product.--For purposes of this paragraph, the
term `primary product' has the same meaning as when used in
section 927(a)(2)(C), as in effect before its repeal.''.
(b) Conforming Amendment.--Section 199(d)(2) (relating to
application to individuals) is amended by striking
``subsection (a)(1)(B)'' and inserting ``subsections
(a)(1)(B) and (d)(9)(A)(iii)''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.
SEC. 402. ELIMINATION OF THE DIFFERENT TREATMENT OF FOREIGN
OIL AND GAS EXTRACTION INCOME AND FOREIGN OIL
RELATED INCOME FOR PURPOSES OF THE FOREIGN TAX
CREDIT.
(a) In General.--Subsections (a) and (b) of section 907
(relating to special rules in case of foreign oil and gas
income) are amended to read as follows:
``(a) Reduction in Amount Allowed as Foreign Tax Under
Section 901.--In applying section 901, the amount of any
foreign oil and gas taxes paid or accrued (or deemed to have
been paid) during the taxable year which would (but for this
subsection) be taken into account for purposes of section 901
shall be reduced by the amount (if any) by which the amount
of such taxes exceeds the product of--
``(1) the amount of the combined foreign oil and gas income
for the taxable year,
``(2) multiplied by--
``(A) in the case of a corporation, the percentage which is
equal to the highest rate of tax specified under section
11(b), or
``(B) in the case of an individual, a fraction the
numerator of which is the tax against which the credit under
section 901(a) is taken and the denominator of which is the
taxpayer's entire taxable income.
``(b) Combined Foreign Oil and Gas Income; Foreign Oil and
Gas Taxes.--For purposes of this section--
``(1) Combined foreign oil and gas income.--The term
`combined foreign oil and gas income' means, with respect to
any taxable year, the sum of--
``(A) foreign oil and gas extraction income, and
``(B) foreign oil related income.
``(2) Foreign oil and gas taxes.--The term `foreign oil and
gas taxes' means, with respect to any taxable year, the sum
of--
``(A) oil and gas extraction taxes, and
``(B) any income, war profits, and excess profits taxes
paid or accrued (or deemed to have been paid or accrued under
section 902 or 960) during the taxable year with respect to
foreign oil related income (determined without regard to
subsection (c)(4)) or loss which would be taken into account
for purposes of section 901 without regard to this
section.''.
(b) Recapture of Foreign Oil and Gas Losses.--Paragraph (4)
of section 907(c) (relating to recapture of foreign oil and
gas extraction losses by recharacterizing later extraction
income) is amended to read as follows:
``(4) Recapture of foreign oil and gas losses by
recharacterizing later combined foreign oil and gas income.--
``(A) In general.--The combined foreign oil and gas income
of a taxpayer for a taxable year (determined without regard
to this paragraph) shall be reduced--
``(i) first by the amount determined under subparagraph
(B), and
``(ii) then by the amount determined under subparagraph
(C).
The aggregate amount of such reductions shall be treated as
income (from sources without the United States) which is not
combined foreign oil and gas income.
``(B) Reduction for pre-2009 foreign oil extraction
losses.--The reduction under this paragraph shall be equal to
the lesser of--
``(i) the foreign oil and gas extraction income of the
taxpayer for the taxable year (determined without regard to
this paragraph), or
``(ii) the excess of--
``(I) the aggregate amount of foreign oil extraction losses
for preceding taxable years beginning after December 31,
1982, and before January 1, 2009, over
``(II) so much of such aggregate amount as was
recharacterized under this paragraph (as in effect before and
after the date of the enactment of the Energy Improvement and
Extension Act of 2008) for preceding taxable years beginning
after December 31, 1982.
``(C) Reduction for post-2008 foreign oil and gas losses.--
The reduction under this paragraph shall be equal to the
lesser of--
``(i) the combined foreign oil and gas income of the
taxpayer for the taxable year (determined without regard to
this paragraph), reduced by an amount equal to the reduction
under subparagraph (A) for the taxable year, or
``(ii) the excess of--
``(I) the aggregate amount of foreign oil and gas losses
for preceding taxable years beginning after December 31,
2008, over
``(II) so much of such aggregate amount as was
recharacterized under this paragraph for preceding taxable
years beginning after December 31, 2008.
``(D) Foreign oil and gas loss defined.--
``(i) In general.--For purposes of this paragraph, the term
`foreign oil and gas loss' means the amount by which--
``(I) the gross income for the taxable year from sources
without the United States and its possessions (whether or not
the taxpayer chooses the benefits of this subpart for such
taxable year) taken into account in determining the combined
foreign oil and gas income for such year, is exceeded by
``(II) the sum of the deductions properly apportioned or
allocated thereto.
``(ii) Net operating loss deduction not taken into
account.--For purposes of clause (i), the net operating loss
deduction allowable for the taxable year under section 172(a)
shall not be taken into account.
``(iii) Expropriation and casualty losses not taken into
account.--For purposes of clause (i), there shall not be
taken into account--
``(I) any foreign expropriation loss (as defined in section
172(h) (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990)) for the
taxable year, or
``(II) any loss for the taxable year which arises from
fire, storm, shipwreck, or other casualty, or from theft,
to the extent such loss is not compensated for by insurance
or otherwise.
``(iv) Foreign oil extraction loss.--For purposes of
subparagraph (B)(ii)(I), foreign oil extraction losses shall
be determined under this paragraph as in effect on the day
before the date of the enactment of the Energy Improvement
and Extension Act of 2008.''.
[[Page 23689]]
(c) Carryback and Carryover of Disallowed Credits.--Section
907(f) (relating to carryback and carryover of disallowed
credits) is amended--
(1) by striking ``oil and gas extraction taxes'' each place
it appears and inserting ``foreign oil and gas taxes'', and
(2) by adding at the end the following new paragraph:
``(4) Transition rules for pre-2009 and 2009 disallowed
credits.--
``(A) Pre-2009 credits.--In the case of any unused credit
year beginning before January 1, 2009, this subsection shall
be applied to any unused oil and gas extraction taxes carried
from such unused credit year to a year beginning after
December 31, 2008--
``(i) by substituting `oil and gas extraction taxes' for
`foreign oil and gas taxes' each place it appears in
paragraphs (1), (2), and (3), and
``(ii) by computing, for purposes of paragraph (2)(A), the
limitation under subparagraph (A) for the year to which such
taxes are carried by substituting `foreign oil and gas
extraction income' for `foreign oil and gas income' in
subsection (a).
``(B) 2009 credits.--In the case of any unused credit year
beginning in 2009, the amendments made to this subsection by
the Energy Improvement and Extension Act of 2008 shall be
treated as being in effect for any preceding year beginning
before January 1, 2009, solely for purposes of determining
how much of the unused foreign oil and gas taxes for such
unused credit year may be deemed paid or accrued in such
preceding year.''.
(d) Conforming Amendment.--Section 6501(i) is amended by
striking ``oil and gas extraction taxes'' and inserting
``foreign oil and gas taxes''.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.
SEC. 403. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES
TRANSACTIONS.
(a) In General.--
(1) Broker reporting for securities transactions.--Section
6045 is amended by adding at the end the following new
subsection:
``(g) Additional Information Required in the Case of
Securities Transactions, etc.--
``(1) In general.--If a broker is otherwise required to
make a return under subsection (a) with respect to the gross
proceeds of the sale of a covered security, the broker shall
include in such return the information described in paragraph
(2).
``(2) Additional information required.--
``(A) In general.--The information required under paragraph
(1) to be shown on a return with respect to a covered
security of a customer shall include the customer's adjusted
basis in such security and whether any gain or loss with
respect to such security is long-term or short-term (within
the meaning of section 1222).
``(B) Determination of adjusted basis.--For purposes of
subparagraph (A)--
``(i) In general.--The customer's adjusted basis shall be
determined--
``(I) in the case of any security (other than any stock for
which an average basis method is permissible under section
1012), in accordance with the first-in first-out method
unless the customer notifies the broker by means of making an
adequate identification of the stock sold or transferred, and
``(II) in the case of any stock for which an average basis
method is permissible under section 1012, in accordance with
the broker's default method unless the customer notifies the
broker that he elects another acceptable method under section
1012 with respect to the account in which such stock is held.
``(ii) Exception for wash sales.--Except as otherwise
provided by the Secretary, the customer's adjusted basis
shall be determined without regard to section 1091 (relating
to loss from wash sales of stock or securities) unless the
transactions occur in the same account with respect to
identical securities.
``(3) Covered security.--For purposes of this subsection--
``(A) In general.--The term `covered security' means any
specified security acquired on or after the applicable date
if such security--
``(i) was acquired through a transaction in the account in
which such security is held, or
``(ii) was transferred to such account from an account in
which such security was a covered security, but only if the
broker received a statement under section 6045A with respect
to the transfer.
``(B) Specified security.--The term `specified security'
means--
``(i) any share of stock in a corporation,
``(ii) any note, bond, debenture, or other evidence of
indebtedness,
``(iii) any commodity, or contract or derivative with
respect to such commodity, if the Secretary determines that
adjusted basis reporting is appropriate for purposes of this
subsection, and
``(iv) any other financial instrument with respect to which
the Secretary determines that adjusted basis reporting is
appropriate for purposes of this subsection.
``(C) Applicable date.--The term `applicable date' means--
``(i) January 1, 2011, in the case of any specified
security which is stock in a corporation (other than any
stock described in clause (ii)),
``(ii) January 1, 2012, in the case of any stock for which
an average basis method is permissible under section 1012,
and
``(iii) January 1, 2013, or such later date determined by
the Secretary in the case of any other specified security.
``(4) Treatment of s corporations.--In the case of the sale
of a covered security acquired by an S corporation (other
than a financial institution) after December 31, 2011, such S
corporation shall be treated in the same manner as a
partnership for purposes of this section.
``(5) Special rules for short sales.--In the case of a
short sale, reporting under this section shall be made for
the year in which such sale is closed.''.
(2) Broker information required with respect to options.--
Section 6045, as amended by subsection (a), is amended by
adding at the end the following new subsection:
``(h) Application to Options on Securities.--
``(1) Exercise of option.--For purposes of this section, if
a covered security is acquired or disposed of pursuant to the
exercise of an option that was granted or acquired in the
same account as the covered security, the amount received
with respect to the grant or paid with respect to the
acquisition of such option shall be treated as an adjustment
to gross proceeds or as an adjustment to basis, as the case
may be.
``(2) Lapse or closing transaction.--In the case of the
lapse (or closing transaction (as defined in section
1234(b)(2)(A))) of an option on a specified security or the
exercise of a cash-settled option on a specified security,
reporting under subsections (a) and (g) with respect to such
option shall be made for the calendar year which includes the
date of such lapse, closing transaction, or exercise.
``(3) Prospective application.--Paragraphs (1) and (2)
shall not apply to any option which is granted or acquired
before January 1, 2013.
``(4) Definitions.--For purposes of this subsection, the
terms `covered security' and `specified security' shall have
the meanings given such terms in subsection (g)(3).''.
(3) Extension of period for statements sent to customers.--
(A) In general.--Subsection (b) of section 6045 is amended
by striking ``January 31'' and inserting ``February 15''.
(B) Statements related to substitute payments.--Subsection
(d) of section 6045 is amended--
(i) by striking ``at such time and'', and
(ii) by inserting after ``other item.'' the following new
sentence: ``The written statement required under the
preceding sentence shall be furnished on or before February
15 of the year following the calendar year in which the
payment was made.''.
(C) Other statements.--Subsection (b) of section 6045 is
amended by adding at the end the following: ``In the case of
a consolidated reporting statement (as defined in
regulations) with respect to any customer, any statement
which would otherwise be required to be furnished on or
before January 31 of a calendar year with respect to any item
reportable to the taxpayer shall instead be required to be
furnished on or before February 15 of such calendar year if
furnished with such consolidated reporting statement.''.
(b) Determination of Basis of Certain Securities on Account
by Account or Average Basis Method.--Section 1012 is
amended--
(1) by striking ``The basis of property'' and inserting the
following:
``(a) In General.--The basis of property'',
(2) by striking ``The cost of real property'' and inserting
the following:
``(b) Special Rule for Apportioned Real Estate Taxes.--The
cost of real property'', and
(3) by adding at the end the following new subsections:
``(c) Determinations by Account.--
``(1) In general.--In the case of the sale, exchange, or
other disposition of a specified security on or after the
applicable date, the conventions prescribed by regulations
under this section shall be applied on an account by account
basis.
``(2) Application to certain funds.--
``(A) In general.--Except as provided in subparagraph (B),
any stock for which an average basis method is permissible
under section 1012 which is acquired before January 1, 2012,
shall be treated as a separate account from any such stock
acquired on or after such date.
``(B) Election fund for treatment as single account.--If a
fund described in subparagraph (A) elects to have this
subparagraph apply with respect to one or more of its
stockholders--
``(i) subparagraph (A) shall not apply with respect to any
stock in such fund held by such stockholders, and
``(ii) all stock in such fund which is held by such
stockholders shall be treated as covered securities described
in section 6045(g)(3) without regard to the date of the
acquisition of such stock.
[[Page 23690]]
A rule similar to the rule of the preceding sentence shall
apply with respect to a broker holding such stock as a
nominee.
``(3) Definitions.--For purposes of this section, the terms
`specified security' and `applicable date' shall have the
meaning given such terms in section 6045(g).
``(d) Average Basis for Stock Acquired Pursuant to a
Dividend Reinvestment Plan.--
``(1) In general.--In the case of any stock acquired after
December 31, 2010, in connection with a dividend reinvestment
plan, the basis of such stock while held as part of such plan
shall be determined using one of the methods which may be
used for determining the basis of stock in an open-end fund.
``(2) Treatment after transfer.--In the case of the
transfer to another account of stock to which paragraph (1)
applies, such stock shall have a cost basis in such other
account equal to its basis in the dividend reinvestment plan
immediately before such transfer (properly adjusted for any
fees or other charges taken into account in connection with
such transfer).
``(3) Separate accounts; election for treatment as single
account.--Rules similar to the rules of subsection (c)(2)
shall apply for purposes of this subsection.
``(4) Dividend reinvestment plan.--For purposes of this
subsection--
``(A) In general.--The term `dividend reinvestment plan'
means any arrangement under which dividends on any stock are
reinvested in stock identical to the stock with respect to
which the dividends are paid.
``(B) Initial stock acquisition treated as acquired in
connection with plan.--Stock shall be treated as acquired in
connection with a dividend reinvestment plan if such stock is
acquired pursuant to such plan or if the dividends paid on
such stock are subject to such plan.''.
(c) Information by Transferors To Aid Brokers.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 is amended by inserting after section 6045 the
following new section:
``SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH
TRANSFERS OF COVERED SECURITIES TO BROKERS.
``(a) Furnishing of Information.--Every applicable person
which transfers to a broker (as defined in section
6045(c)(1)) a security which is a covered security (as
defined in section 6045(g)(3)) in the hands of such
applicable person shall furnish to such broker a written
statement in such manner and setting forth such information
as the Secretary may by regulations prescribe for purposes of
enabling such broker to meet the requirements of section
6045(g).
``(b) Applicable Person.--For purposes of subsection (a),
the term `applicable person' means--
``(1) any broker (as defined in section 6045(c)(1)), and
``(2) any other person as provided by the Secretary in
regulations.
``(c) Time for Furnishing Statement.--Except as otherwise
provided by the Secretary, any statement required by
subsection (a) shall be furnished not later than 15 days
after the date of the transfer described in such
subsection.''.
(2) Assessable penalties.--Paragraph (2) of section
6724(d), as amended by the Housing Assistance Tax Act of
2008, is amended by redesignating subparagraphs (I) through
(DD) as subparagraphs (J) through (EE), respectively, and by
inserting after subparagraph (H) the following new
subparagraph:
``(I) section 6045A (relating to information required in
connection with transfers of covered securities to
brokers),''.
(3) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61 is amended by
inserting after the item relating to section 6045 the
following new item:
``Sec. 6045A. Information required in connection with transfers of
covered securities to brokers.''.
(d) Additional Issuer Information To Aid Brokers.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61, as amended by subsection (b), is amended by
inserting after section 6045A the following new section:
``SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF
SPECIFIED SECURITIES.
``(a) In General.--According to the forms or regulations
prescribed by the Secretary, any issuer of a specified
security shall make a return setting forth--
``(1) a description of any organizational action which
affects the basis of such specified security of such issuer,
``(2) the quantitative effect on the basis of such
specified security resulting from such action, and
``(3) such other information as the Secretary may
prescribe.
``(b) Time for Filing Return.--Any return required by
subsection (a) shall be filed not later than the earlier of--
``(1) 45 days after the date of the action described in
subsection (a), or
``(2) January 15 of the year following the calendar year
during which such action occurred.
``(c) Statements To Be Furnished to Holders of Specified
Securities or Their Nominees.--According to the forms or
regulations prescribed by the Secretary, every person
required to make a return under subsection (a) with respect
to a specified security shall furnish to the nominee with
respect to the specified security (or certificate holder if
there is no nominee) a written statement showing--
``(1) the name, address, and phone number of the
information contact of the person required to make such
return,
``(2) the information required to be shown on such return
with respect to such security, and
``(3) such other information as the Secretary may
prescribe.
The written statement required under the preceding sentence
shall be furnished to the holder on or before January 15 of
the year following the calendar year during which the action
described in subsection (a) occurred.
``(d) Specified Security.--For purposes of this section,
the term `specified security' has the meaning given such term
by section 6045(g)(3)(B). No return shall be required under
this section with respect to actions described in subsection
(a) with respect to a specified security which occur before
the applicable date (as defined in section 6045(g)(3)(C))
with respect to such security.
``(e) Public Reporting in Lieu of Return.--The Secretary
may waive the requirements under subsections (a) and (c) with
respect to a specified security, if the person required to
make the return under subsection (a) makes publicly
available, in such form and manner as the Secretary
determines necessary to carry out the purposes of this
section--
``(1) the name, address, phone number, and email address of
the information contact of such person, and
``(2) the information described in paragraphs (1), (2), and
(3) of subsection (a).''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1), as amended by
the Housing Assistance Tax Act of 2008, is amended by
redesignating clause (iv) and each of the clauses which
follow as clauses (v) through (xxiii), respectively, and by
inserting after clause (iii) the following new clause:
``(iv) section 6045B(a) (relating to returns relating to
actions affecting basis of specified securities),''.
(B) Paragraph (2) of section 6724(d), as amended by the
Housing Assistance Tax Act of 2008 and by subsection (c)(2),
is amended by redesignating subparagraphs (J) through (EE) as
subparagraphs (K) through (FF), respectively, and by
inserting after subparagraph (I) the following new
subparagraph:
``(J) subsections (c) and (e) of section 6045B (relating to
returns relating to actions affecting basis of specified
securities),''.
(3) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61, as amended by
subsection (b)(3), is amended by inserting after the item
relating to section 6045A the following new item:
``Sec. 6045B. Returns relating to actions affecting basis of specified
securities.''.
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect on January 1, 2011.
(2) Extension of period for statements sent to customers.--
The amendments made by subsection (a)(3) shall apply to
statements required to be furnished after December 31, 2008.
SEC. 404. 0.2 PERCENT FUTA SURTAX.
(a) In General.--Section 3301 (relating to rate of tax) is
amended--
(1) by striking ``through 2008'' in paragraph (1) and
inserting ``through 2009'', and
(2) by striking ``calendar year 2009'' in paragraph (2) and
inserting ``calendar year 2010''.
(b) Effective Date.--The amendments made by this section
shall apply to wages paid after December 31, 2008.
SEC. 405. INCREASE AND EXTENSION OF OIL SPILL LIABILITY TRUST
FUND TAX.
(a) Increase in Rate.--
(1) In general.--Section 4611(c)(2)(B) (relating to rates)
is amended by striking ``is 5 cents a barrel.'' and inserting
``is--
``(i) in the case of crude oil received or petroleum
products entered before January 1, 2017, 8 cents a barrel,
and
``(ii) in the case of crude oil received or petroleum
products entered after December 31, 2016, 9 cents a
barrel.''.
(2) Effective date.--The amendment made by this subsection
shall apply on and after the first day of the first calendar
quarter beginning more than 60 days after the date of the
enactment of this Act.
(b) Extension.--
(1) In general.--Section 4611(f) (relating to application
of Oil Spill Liability Trust Fund financing rate) is amended
by striking paragraphs (2) and (3) and inserting the
following new paragraph:
``(2) Termination.--The Oil Spill Liability Trust Fund
financing rate shall not apply after December 31, 2017.''.
(2) Conforming amendment.--Section 4611(f)(1) is amended by
striking ``paragraphs (2) and (3)'' and inserting ``paragraph
(2)''.
[[Page 23691]]
(3) Effective date.--The amendments made by this subsection
shall take effect on the date of the enactment of this Act.
DIVISION C--TAX EXTENDERS AND ALTERNATIVE MINIMUM TAX RELIEF
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF
CONTENTS.
(a) Short Title.--This division may be cited as the ``Tax
Extenders and Alternative Minimum Tax Relief Act of 2008''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this division an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents of this
division is as follows:
Sec. 1. Short title; amendment of 1986 Code; table of contents.
TITLE I--ALTERNATIVE MINIMUM TAX RELIEF
Sec. 101. Extension of alternative minimum tax relief for nonrefundable
personal credits.
Sec. 102. Extension of increased alternative minimum tax exemption
amount.
Sec. 103. Increase of AMT refundable credit amount for individuals with
long-term unused credits for prior year minimum tax
liability, etc.
TITLE II--EXTENSION OF INDIVIDUAL TAX PROVISIONS
Sec. 201. Deduction for State and local sales taxes.
Sec. 202. Deduction of qualified tuition and related expenses.
Sec. 203. Deduction for certain expenses of elementary and secondary
school teachers.
Sec. 204. Additional standard deduction for real property taxes for
nonitemizers.
Sec. 205. Tax-free distributions from individual retirement plans for
charitable purposes.
Sec. 206. Treatment of certain dividends of regulated investment
companies.
Sec. 207. Stock in RIC for purposes of determining estates of
nonresidents not citizens.
Sec. 208. Qualified investment entities.
TITLE III--EXTENSION OF BUSINESS TAX PROVISIONS
Sec. 301. Extension and modification of research credit.
Sec. 302. New markets tax credit.
Sec. 303. Subpart F exception for active financing income.
Sec. 304. Extension of look-thru rule for related controlled foreign
corporations.
Sec. 305. Extension of 15-year straight-line cost recovery for
qualified leasehold improvements and qualified restaurant
improvements; 15-year straight-line cost recovery for
certain improvements to retail space.
Sec. 306. Modification of tax treatment of certain payments to
controlling exempt organizations.
Sec. 307. Basis adjustment to stock of S corporations making charitable
contributions of property.
Sec. 308. Increase in limit on cover over of rum excise tax to Puerto
Rico and the Virgin Islands.
Sec. 309. Extension of economic development credit for American Samoa.
Sec. 310. Extension of mine rescue team training credit.
Sec. 311. Extension of election to expense advanced mine safety
equipment.
Sec. 312. Deduction allowable with respect to income attributable to
domestic production activities in Puerto Rico.
Sec. 313. Qualified zone academy bonds.
Sec. 314. Indian employment credit.
Sec. 315. Accelerated depreciation for business property on Indian
reservations.
Sec. 316. Railroad track maintenance.
Sec. 317. Seven-year cost recovery period for motorsports racing track
facility.
Sec. 318. Expensing of environmental remediation costs.
Sec. 319. Extension of work opportunity tax credit for Hurricane
Katrina employees.
Sec. 320. Extension of increased rehabilitation credit for structures
in the Gulf Opportunity Zone.
Sec. 321. Enhanced deduction for qualified computer contributions.
Sec. 322. Tax incentives for investment in the District of Columbia.
Sec. 323. Enhanced charitable deductions for contributions of food
inventory.
Sec. 324. Extension of enhanced charitable deduction for contributions
of book inventory.
Sec. 325. Extension and modification of duty suspension on wool
products; wool research fund; wool duty refunds.
TITLE IV--EXTENSION OF TAX ADMINISTRATION PROVISIONS
Sec. 401. Permanent authority for undercover operations.
Sec. 402. Permanent authority for disclosure of information relating to
terrorist activities.
TITLE V--ADDITIONAL TAX RELIEF AND OTHER TAX PROVISIONS
Subtitle A--General Provisions
Sec. 501. $8,500 income threshold used to calculate refundable portion
of child tax credit.
Sec. 502. Provisions related to film and television productions.
Sec. 503. Exemption from excise tax for certain wooden arrows designed
for use by children.
Sec. 504. Income averaging for amounts received in connection with the
Exxon Valdez litigation.
Sec. 505. Certain farming business machinery and equipment treated as
5-year property.
Sec. 506. Modification of penalty on understatement of taxpayer's
liability by tax return preparer.
Subtitle B--Paul Wellstone and Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008
Sec. 511. Short title.
Sec. 512. Mental health parity.
TITLE VI--OTHER PROVISIONS
Sec. 601. Secure rural schools and community self-determination
program.
Sec. 602. Transfer to abandoned mine reclamation fund.
TITLE VII--DISASTER RELIEF
Subtitle A--Heartland and Hurricane Ike Disaster Relief
Sec. 701. Short title.
Sec. 702. Temporary tax relief for areas damaged by 2008 Midwestern
severe storms, tornados, and flooding.
Sec. 703. Reporting requirements relating to disaster relief
contributions.
Sec. 704. Temporary tax-exempt bond financing and low-income housing
tax relief for areas damaged by Hurricane Ike.
Subtitle B--National Disaster Relief
Sec. 706. Losses attributable to federally declared disasters.
Sec. 707. Expensing of Qualified Disaster Expenses.
Sec. 708. Net operating losses attributable to federally declared
disasters.
Sec. 709. Waiver of certain mortgage revenue bond requirements
following federally declared disasters.
Sec. 710. Special depreciation allowance for qualified disaster
property.
Sec. 711. Increased expensing for qualified disaster assistance
property.
Sec. 712. Coordination with Heartland disaster relief.
TITLE VIII--SPENDING REDUCTIONS AND APPROPRIATE REVENUE RAISERS FOR NEW
TAX RELIEF POLICY
Sec. 801. Nonqualified deferred compensation from certain tax
indifferent parties.
TITLE I--ALTERNATIVE MINIMUM TAX RELIEF
SEC. 101. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR
NONREFUNDABLE PERSONAL CREDITS.
(a) In General.--Paragraph (2) of section 26(a) (relating
to special rule for taxable years 2000 through 2007) is
amended--
(1) by striking ``or 2007'' and inserting ``2007, or
2008'', and
(2) by striking ``2007'' in the heading thereof and
inserting ``2008''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 102. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX
EXEMPTION AMOUNT.
(a) In General.--Paragraph (1) of section 55(d) (relating
to exemption amount) is amended--
(1) by striking ``($66,250 in the case of taxable years
beginning in 2007)'' in subparagraph (A) and inserting
``($69,950 in the case of taxable years beginning in 2008)'',
and
(2) by striking ``($44,350 in the case of taxable years
beginning in 2007)'' in subparagraph (B) and inserting
``($46,200 in the case of taxable years beginning in 2008)''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 103. INCREASE OF AMT REFUNDABLE CREDIT AMOUNT FOR
INDIVIDUALS WITH LONG-TERM UNUSED CREDITS FOR
PRIOR YEAR MINIMUM TAX LIABILITY, ETC.
(a) In General.--Paragraph (2) of section 53(e) is amended
to read as follows:
``(2) AMT refundable credit amount.--For purposes of
paragraph (1), the term `AMT refundable credit amount' means,
with respect to any taxable year, the amount (not in excess
of the long-term unused minimum tax credit for such taxable
year) equal to the greater of--
``(A) 50 percent of the long-term unused minimum tax credit
for such taxable year, or
``(B) the amount (if any) of the AMT refundable credit
amount determined under
[[Page 23692]]
this paragraph for the taxpayer's preceding taxable year
(determined without regard to subsection (f)(2)).''.
(b) Treatment of Certain Underpayments, Interest, and
Penalties Attributable to the Treatment of Incentive Stock
Options.--Section 53 is amended by adding at the end the
following new subsection:
``(f) Treatment of Certain Underpayments, Interest, and
Penalties Attributable to the Treatment of Incentive Stock
Options.--
``(1) Abatement.--Any underpayment of tax outstanding on
the date of the enactment of this subsection which is
attributable to the application of section 56(b)(3) for any
taxable year ending before January 1, 2008, and any interest
or penalty with respect to such underpayment which is
outstanding on such date of enactment, is hereby abated. The
amount determined under subsection (b)(1) shall not include
any tax abated under the preceding sentence.
``(2) Increase in credit for certain interest and penalties
already paid.--The AMT refundable credit amount, and the
minimum tax credit determined under subsection (b), for the
taxpayer's first 2 taxable years beginning after December 31,
2007, shall each be increased by 50 percent of the aggregate
amount of the interest and penalties which were paid by the
taxpayer before the date of the enactment of this subsection
and which would (but for such payment) have been abated under
paragraph (1).''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2007.
(2) Abatement.--Section 53(f)(1), as added by subsection
(b), shall take effect on the date of the enactment of this
Act.
TITLE II--EXTENSION OF INDIVIDUAL TAX PROVISIONS
SEC. 201. DEDUCTION FOR STATE AND LOCAL SALES TAXES.
(a) In General.--Subparagraph (I) of section 164(b)(5) is
amended by striking ``January 1, 2008'' and inserting
``January 1, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 202. DEDUCTION OF QUALIFIED TUITION AND RELATED
EXPENSES.
(a) In General.--Subsection (e) of section 222 (relating to
termination) is amended by striking ``December 31, 2007'' and
inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 203. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND
SECONDARY SCHOOL TEACHERS.
(a) In General.--Subparagraph (D) of section 62(a)(2)
(relating to certain expenses of elementary and secondary
school teachers) is amended by striking ``or 2007'' and
inserting ``2007, 2008, or 2009''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31,
2007.
SEC. 204. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY
TAXES FOR NONITEMIZERS.
(a) In General.--Subparagraph (C) of section 63(c)(1), as
added by the Housing Assistance Tax Act of 2008, is amended
by inserting ``or 2009'' after ``2008''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2008.
SEC. 205. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT
PLANS FOR CHARITABLE PURPOSES.
(a) In General.--Subparagraph (F) of section 408(d)(8)
(relating to termination) is amended by striking ``December
31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to distributions made in taxable years beginning
after December 31, 2007.
SEC. 206. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED
INVESTMENT COMPANIES.
(a) Interest-Related Dividends.--Subparagraph (C) of
section 871(k)(1) (defining interest-related dividend) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2009''.
(b) Short-Term Capital Gain Dividends.--Subparagraph (C) of
section 871(k)(2) (defining short-term capital gain dividend)
is amended by striking ``December 31, 2007'' and inserting
``December 31, 2009''.
(c) Effective Date.--The amendments made by this section
shall apply to dividends with respect to taxable years of
regulated investment companies beginning after December 31,
2007.
SEC. 207. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES OF
NONRESIDENTS NOT CITIZENS.
(a) In General.--Paragraph (3) of section 2105(d) (relating
to stock in a RIC) is amended by striking ``December 31,
2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to decedents dying after December 31, 2007.
SEC. 208. QUALIFIED INVESTMENT ENTITIES.
(a) In General.--Clause (ii) of section 897(h)(4)(A)
(relating to termination) is amended by striking ``December
31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on January 1, 2008.
TITLE III--EXTENSION OF BUSINESS TAX PROVISIONS
SEC. 301. EXTENSION AND MODIFICATION OF RESEARCH CREDIT.
(a) Extension.--
(1) In general.--Section 41(h) (relating to termination) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2009'' in paragraph (1)(B).
(2) Conforming amendment.--Subparagraph (D) of section
45C(b)(1) (relating to special rule) is amended by striking
``after December 31, 2007'' and inserting ``after December
31, 2009''.
(b) Termination of Alternative Incremental Credit.--Section
41(h) is amended by redesignating paragraph (2) as paragraph
(3), and by inserting after paragraph (1) the following new
paragraph:
``(2) Termination of alternative incremental credit.--No
election under subsection (c)(4) shall apply to taxable years
beginning after December 31, 2008.''.
(c) Modification of Alternative Simplified Credit.--
Paragraph (5)(A) of section 41(c) (relating to election of
alternative simplified credit) is amended by striking ``12
percent'' and inserting ``14 percent (12 percent in the case
of taxable years ending before January 1, 2009)''.
(d) Technical Correction.--Paragraph (3) of section 41(h)
is amended to read as follows:
``(2) Computation for taxable year in which credit
terminates.--In the case of any taxable year with respect to
which this section applies to a number of days which is less
than the total number of days in such taxable year--
``(A) the amount determined under subsection (c)(1)(B) with
respect to such taxable year shall be the amount which bears
the same ratio to such amount (determined without regard to
this paragraph) as the number of days in such taxable year to
which this section applies bears to the total number of days
in such taxable year, and
``(B) for purposes of subsection (c)(5), the average
qualified research expenses for the preceding 3 taxable years
shall be the amount which bears the same ratio to such
average qualified research expenses (determined without
regard to this paragraph) as the number of days in such
taxable year to which this section applies bears to the total
number of days in such taxable year.''.
(e) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2007.
(2) Extension.--The amendments made by subsection (a) shall
apply to amounts paid or incurred after December 31, 2007.
SEC. 302. NEW MARKETS TAX CREDIT.
Subparagraph (D) of section 45D(f)(1) (relating to national
limitation on amount of investments designated) is amended by
striking ``and 2008'' and inserting ``2008, and 2009''.
SEC. 303. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME.
(a) Exempt Insurance Income.--Paragraph (10) of section
953(e) (relating to application) is amended--
(1) by striking ``January 1, 2009'' and inserting ``January
1, 2010'', and
(2) by striking ``December 31, 2008'' and inserting
``December 31, 2009''.
(b) Exception to Treatment as Foreign Personal Holding
Company Income.--Paragraph (9) of section 954(h) (relating to
application) is amended by striking ``January 1, 2009'' and
inserting ``January 1, 2010''.
SEC. 304. EXTENSION OF LOOK-THRU RULE FOR RELATED CONTROLLED
FOREIGN CORPORATIONS.
(a) In General.--Subparagraph (C) of section 954(c)(6)
(relating to application) is amended by striking ``January 1,
2009'' and inserting ``January 1, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years of foreign corporations
beginning after December 31, 2007, and to taxable years of
United States shareholders with or within which such taxable
years of foreign corporations end.
SEC. 305. EXTENSION OF 15-YEAR STRAIGHT-LINE COST RECOVERY
FOR QUALIFIED LEASEHOLD IMPROVEMENTS AND
QUALIFIED RESTAURANT IMPROVEMENTS; 15-YEAR
STRAIGHT-LINE COST RECOVERY FOR CERTAIN
IMPROVEMENTS TO RETAIL SPACE.
(a) Extension of Leasehold and Restaurant Improvements.--
(1) In general.--Clauses (iv) and (v) of section
168(e)(3)(E) (relating to 15-year property) are each amended
by striking ``January 1, 2008'' and inserting ``January 1,
2010''.
(2) Effective date.--The amendments made by this subsection
shall apply to property placed in service after December 31,
2007.
(b) Treatment to Include New Construction.--
(1) In general.--Paragraph (7) of section 168(e) (relating
to classification of property) is amended to read as follows:
``(7) Qualified restaurant property.--
[[Page 23693]]
``(A) In general.--The term `qualified restaurant property'
means any section 1250 property which is--
``(i) a building, if such building is placed in service
after December 31, 2008, and before January 1, 2010, or
``(ii) an improvement to a building,
if more than 50 percent of the building's square footage is
devoted to preparation of, and seating for on-premises
consumption of, prepared meals.
``(B) Exclusion from bonus depreciation.--Property
described in this paragraph shall not be considered qualified
property for purposes of subsection (k).''.
(2) Effective date.--The amendment made by this subsection
shall apply to property placed in service after December 31,
2008.
(c) Recovery Period for Depreciation of Certain
Improvements to Retail Space.--
(1) 15-year recovery period.--Section 168(e)(3)(E)
(relating to 15-year property) is amended by striking ``and''
at the end of clause (vii), by striking the period at the end
of clause (viii) and inserting ``, and'', and by adding at
the end the following new clause:
``(ix) any qualified retail improvement property placed in
service after December 31, 2008, and before January 1,
2010.''.
(2) Qualified retail improvement property.--Section 168(e)
is amended by adding at the end the following new paragraph:
``(8) Qualified retail improvement property.--
``(A) In general.--The term `qualified retail improvement
property' means any improvement to an interior portion of a
building which is nonresidential real property if--
``(i) such portion is open to the general public and is
used in the retail trade or business of selling tangible
personal property to the general public, and
``(ii) such improvement is placed in service more than 3
years after the date the building was first placed in
service.
``(B) Improvements made by owner.--In the case of an
improvement made by the owner of such improvement, such
improvement shall be qualified retail improvement property
(if at all) only so long as such improvement is held by such
owner. Rules similar to the rules under paragraph (6)(B)
shall apply for purposes of the preceding sentence.
``(C) Certain improvements not included.--Such term shall
not include any improvement for which the expenditure is
attributable to--
``(i) the enlargement of the building,
``(ii) any elevator or escalator,
``(iii) any structural component benefitting a common area,
or
``(iv) the internal structural framework of the building.
``(D) Exclusion from bonus depreciation.--Property
described in this paragraph shall not be considered qualified
property for purposes of subsection (k).
``(E) Termination.--Such term shall not include any
improvement placed in service after December 31, 2009.''.
(3) Requirement to use straight line method.--Section
168(b)(3) is amended by adding at the end the following new
subparagraph:
``(I) Qualified retail improvement property described in
subsection (e)(8).''.
(4) Alternative system.--The table contained in section
168(g)(3)(B) is amended by inserting after the item relating
to subparagraph (E)(viii) the following new item:
``(E)(ix).....................................................39''.
(5) Effective date.--The amendments made by this subsection
shall apply to property placed in service after December 31,
2008.
SEC. 306. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS
TO CONTROLLING EXEMPT ORGANIZATIONS.
(a) In General.--Clause (iv) of section 512(b)(13)(E)
(relating to termination) is amended by striking ``December
31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to payments received or accrued after December
31, 2007.
SEC. 307. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING
CHARITABLE CONTRIBUTIONS OF PROPERTY.
(a) In General.--The last sentence of section 1367(a)(2)
(relating to decreases in basis) is amended by striking
``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made in taxable years beginning
after December 31, 2007.
SEC. 308. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX
TO PUERTO RICO AND THE VIRGIN ISLANDS.
(a) In General.--Paragraph (1) of section 7652(f) is
amended by striking ``January 1, 2008'' and inserting
``January 1, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to distilled spirits brought into the United
States after December 31, 2007.
SEC. 309. EXTENSION OF ECONOMIC DEVELOPMENT CREDIT FOR
AMERICAN SAMOA.
(a) In General.--Subsection (d) of section 119 of division
A of the Tax Relief and Health Care Act of 2006 is amended--
(1) by striking ``first two taxable years'' and inserting
``first 4 taxable years'', and
(2) by striking ``January 1, 2008'' and inserting ``January
1, 2010''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 310. EXTENSION OF MINE RESCUE TEAM TRAINING CREDIT.
Section 45N(e) (relating to termination) is amended by
striking ``December 31, 2008'' and inserting ``December 31,
2009''.
SEC. 311. EXTENSION OF ELECTION TO EXPENSE ADVANCED MINE
SAFETY EQUIPMENT.
Section 179E(g) (relating to termination) is amended by
striking ``December 31, 2008'' and inserting ``December 31,
2009''.
SEC. 312. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME
ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES
IN PUERTO RICO.
(a) In General.--Subparagraph (C) of section 199(d)(8)
(relating to termination) is amended--
(1) by striking ``first 2 taxable years'' and inserting
``first 4 taxable years'', and
(2) by striking ``January 1, 2008'' and inserting ``January
1, 2010''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 313. QUALIFIED ZONE ACADEMY BONDS.
(a) In General.--Subpart I of part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
section:
``SEC. 54E. QUALIFIED ZONE ACADEMY BONDS.
``(a) Qualified Zone Academy Bonds.--For purposes of this
subchapter, the term `qualified zone academy bond' means any
bond issued as part of an issue if--
``(1) 100 percent of the available project proceeds of such
issue are to be used for a qualified purpose with respect to
a qualified zone academy established by an eligible local
education agency,
``(2) the bond is issued by a State or local government
within the jurisdiction of which such academy is located, and
``(3) the issuer--
``(A) designates such bond for purposes of this section,
``(B) certifies that it has written assurances that the
private business contribution requirement of subsection (b)
will be met with respect to such academy, and
``(C) certifies that it has the written approval of the
eligible local education agency for such bond issuance.
``(b) Private Business Contribution Requirement.--For
purposes of subsection (a), the private business contribution
requirement of this subsection is met with respect to any
issue if the eligible local education agency that established
the qualified zone academy has written commitments from
private entities to make qualified contributions having a
present value (as of the date of issuance of the issue) of
not less than 10 percent of the proceeds of the issue.
``(c) Limitation on Amount of Bonds Designated.--
``(1) National limitation.--There is a national zone
academy bond limitation for each calendar year. Such
limitation is $400,000,000 for 2008 and 2009, and, except as
provided in paragraph (4), zero thereafter.
``(2) Allocation of limitation.--The national zone academy
bond limitation for a calendar year shall be allocated by the
Secretary among the States on the basis of their respective
populations of individuals below the poverty line (as defined
by the Office of Management and Budget). The limitation
amount allocated to a State under the preceding sentence
shall be allocated by the State education agency to qualified
zone academies within such State.
``(3) Designation subject to limitation amount.--The
maximum aggregate face amount of bonds issued during any
calendar year which may be designated under subsection (a)
with respect to any qualified zone academy shall not exceed
the limitation amount allocated to such academy under
paragraph (2) for such calendar year.
``(4) Carryover of unused limitation.--
``(A) In general.--If for any calendar year--
``(i) the limitation amount for any State, exceeds
``(ii) the amount of bonds issued during such year which
are designated under subsection (a) with respect to qualified
zone academies within such State,
the limitation amount for such State for the following
calendar year shall be increased by the amount of such
excess.
``(B) Limitation on carryover.--Any carryforward of a
limitation amount may be carried only to the first 2 years
following the unused limitation year. For purposes of the
preceding sentence, a limitation amount shall be treated as
used on a first-in first-out basis.
``(C) Coordination with section 1397e.--Any carryover
determined under section 1397E(e)(4) (relating to carryover
of unused limitation) with respect to any State to calendar
year 2008 or 2009 shall be treated for purposes of this
section as a carryover with respect to such State for such
calendar year under subparagraph (A), and the limitation of
subparagraph (B) shall apply to such carryover taking into
account the calendar years to which such carryover relates.
``(d) Definitions.--For purposes of this section--
[[Page 23694]]
``(1) Qualified zone academy.--The term `qualified zone
academy' means any public school (or academic program within
a public school) which is established by and operated under
the supervision of an eligible local education agency to
provide education or training below the postsecondary level
if--
``(A) such public school or program (as the case may be) is
designed in cooperation with business to enhance the academic
curriculum, increase graduation and employment rates, and
better prepare students for the rigors of college and the
increasingly complex workforce,
``(B) students in such public school or program (as the
case may be) will be subject to the same academic standards
and assessments as other students educated by the eligible
local education agency,
``(C) the comprehensive education plan of such public
school or program is approved by the eligible local education
agency, and
``(D)(i) such public school is located in an empowerment
zone or enterprise community (including any such zone or
community designated after the date of the enactment of this
section), or
``(ii) there is a reasonable expectation (as of the date of
issuance of the bonds) that at least 35 percent of the
students attending such school or participating in such
program (as the case may be) will be eligible for free or
reduced-cost lunches under the school lunch program
established under the National School Lunch Act.
``(2) Eligible local education agency.--For purposes of
this section, the term `eligible local education agency'
means any local educational agency as defined in section 9101
of the Elementary and Secondary Education Act of 1965.
``(3) Qualified purpose.--The term `qualified purpose'
means, with respect to any qualified zone academy--
``(A) rehabilitating or repairing the public school
facility in which the academy is established,
``(B) providing equipment for use at such academy,
``(C) developing course materials for education to be
provided at such academy, and
``(D) training teachers and other school personnel in such
academy.
``(4) Qualified contributions.--The term `qualified
contribution' means any contribution (of a type and quality
acceptable to the eligible local education agency) of--
``(A) equipment for use in the qualified zone academy
(including state-of-the-art technology and vocational
equipment),
``(B) technical assistance in developing curriculum or in
training teachers in order to promote appropriate market
driven technology in the classroom,
``(C) services of employees as volunteer mentors,
``(D) internships, field trips, or other educational
opportunities outside the academy for students, or
``(E) any other property or service specified by the
eligible local education agency.''.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 54A(d), as amended by this
Act, is amended by striking ``or'' at the end of subparagraph
(B), by inserting ``or'' at the end of subparagraph (C), and
by inserting after subparagraph (C) the following new
subparagraph:
``(D) a qualified zone academy bond,''.
(2) Subparagraph (C) of section 54A(d)(2), as amended by
this Act, is amended by striking ``and'' at the end of clause
(ii), by striking the period at the end of clause (iii) and
inserting ``, and'', and by adding at the end the following
new clause:
``(iv) in the case of a qualified zone academy bond, a
purpose specified in section 54E(a)(1).''.
(3) Section 1397E is amended by adding at the end the
following new subsection:
``(m) Termination.--This section shall not apply to any
obligation issued after the date of the enactment of the Tax
Extenders and Alternative Minimum Tax Relief Act of 2008.''.
(4) The table of sections for subpart I of part IV of
subchapter A of chapter 1 is amended by adding at the end the
following new item:
``Sec. 54E. Qualified zone academy bonds.''.
(c) Effective Date.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.
SEC. 314. INDIAN EMPLOYMENT CREDIT.
(a) In General.--Subsection (f) of section 45A (relating to
termination) is amended by striking ``December 31, 2007'' and
inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 315. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON
INDIAN RESERVATIONS.
(a) In General.--Paragraph (8) of section 168(j) (relating
to termination) is amended by striking ``December 31, 2007''
and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2007.
SEC. 316. RAILROAD TRACK MAINTENANCE.
(a) In General.--Subsection (f) of section 45G (relating to
application of section) is amended by striking ``January 1,
2008'' and inserting ``January 1, 2010''.
(b) Credit Allowed Against Alternative Minimum Tax.--
Subparagraph (B) of section 38(c)(4), as amended by this Act,
is amended--
(1) by redesignating clauses (v), (vi), and (vii) as
clauses (vi), (vii), and (viii), respectively, and
(2) by inserting after clause (iv) the following new
clause:
``(v) the credit determined under section 45G,''.
(c) Effective Dates.--
(1) The amendment made by subsection (a) shall apply to
expenditures paid or incurred during taxable years beginning
after December 31, 2007.
(2) The amendments made by subsection (b) shall apply to
credits determined under section 45G of the Internal Revenue
Code of 1986 in taxable years beginning after December 31,
2007, and to carrybacks of such credits.
SEC. 317. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS
RACING TRACK FACILITY.
(a) In General.--Subparagraph (D) of section 168(i)(15)
(relating to termination) is amended by striking ``December
31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2007.
SEC. 318. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.
(a) In General.--Subsection (h) of section 198 (relating to
termination) is amended by striking ``December 31, 2007'' and
inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to expenditures paid or incurred after December
31, 2007.
SEC. 319. EXTENSION OF WORK OPPORTUNITY TAX CREDIT FOR
HURRICANE KATRINA EMPLOYEES.
(a) In General.--Paragraph (1) of section 201(b) of the
Katrina Emergency Tax Relief Act of 2005 is amended by
striking ``2-year'' and inserting ``4-year''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to individuals hired after August 27, 2007.
SEC. 320. EXTENSION OF INCREASED REHABILITATION CREDIT FOR
STRUCTURES IN THE GULF OPPORTUNITY ZONE.
(a) In General.--Subsection (h) of section 1400N is amended
by striking ``December 31, 2008'' and inserting ``December
31, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to expenditures paid or incurred after the date
of the enactment of this Act.
SEC. 321. ENHANCED DEDUCTION FOR QUALIFIED COMPUTER
CONTRIBUTIONS.
(a) In General.--Subparagraph (G) of section 170(e)(6) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made during taxable years
beginning after December 31, 2007.
SEC. 322. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF
COLUMBIA.
(a) Designation of Zone.--
(1) In general.--Subsection (f) of section 1400 is amended
by striking ``2007'' both places it appears and inserting
``2009''.
(2) Effective date.--The amendments made by this subsection
shall apply to periods beginning after December 31, 2007.
(b) Tax-Exempt Economic Development Bonds.--
(1) In general.--Subsection (b) of section 1400A is amended
by striking ``2007'' and inserting ``2009''.
(2) Effective date.--The amendment made by this subsection
shall apply to bonds issued after December 31, 2007.
(c) Zero Percent Capital Gains Rate.--
(1) In general.--Subsection (b) of section 1400B is amended
by striking ``2008'' each place it appears and inserting
``2010''.
(2) Conforming amendments.--
(A) Section 1400B(e)(2) is amended--
(i) by striking ``2012'' and inserting ``2014'', and
(ii) by striking ``2012'' in the heading thereof and
inserting ``2014''.
(B) Section 1400B(g)(2) is amended by striking ``2012'' and
inserting ``2014''.
(C) Section 1400F(d) is amended by striking ``2012'' and
inserting ``2014''.
(3) Effective dates.--
(A) Extension.--The amendments made by paragraph (1) shall
apply to acquisitions after December 31, 2007.
(B) Conforming amendments.--The amendments made by
paragraph (2) shall take effect on the date of the enactment
of this Act.
(d) First-Time Homebuyer Credit.--
(1) In general.--Subsection (i) of section 1400C is amended
by striking ``2008'' and inserting ``2010''.
(2) Effective date.--The amendment made by this subsection
shall apply to property purchased after December 31, 2007.
SEC. 323. ENHANCED CHARITABLE DEDUCTIONS FOR CONTRIBUTIONS OF
FOOD INVENTORY.
(a) Increased Amount of Deduction.--
(1) In general.--Clause (iv) of section 170(e)(3)(C)
(relating to termination) is amended by striking ``December
31, 2007'' and inserting ``December 31, 2009''.
(2) Effective date.--The amendment made by this subsection
shall apply to contributions made after December 31, 2007.
[[Page 23695]]
(b) Temporary Suspension of Limitations on Charitable
Contributions.--
(1) In general.--Section 170(b) is amended by adding at the
end the following new paragraph:
``(3) Temporary suspension of limitations on charitable
contributions.--In the case of a qualified farmer or rancher
(as defined in paragraph (1)(E)(v)), any charitable
contribution of food--
``(A) to which subsection (e)(3)(C) applies (without regard
to clause (ii) thereof), and
``(B) which is made during the period beginning on the date
of the enactment of this paragraph and before January 1,
2009,
shall be treated for purposes of paragraph (1)(E) or (2)(B),
whichever is applicable, as if it were a qualified
conservation contribution which is made by a qualified farmer
or rancher and which otherwise meets the requirements of such
paragraph.''.
(2) Effective date.--The amendment made by this subsection
shall apply to taxable years ending after the date of the
enactment of this Act.
SEC. 324. EXTENSION OF ENHANCED CHARITABLE DEDUCTION FOR
CONTRIBUTIONS OF BOOK INVENTORY.
(a) Extension.--Clause (iv) of section 170(e)(3)(D)
(relating to termination) is amended by striking ``December
31, 2007'' and inserting ``December 31, 2009''.
(b) Clerical Amendment.--Clause (iii) of section
170(e)(3)(D) (relating to certification by donee) is amended
by inserting ``of books'' after ``to any contribution''.
(c) Effective Date.--The amendments made by this section
shall apply to contributions made after December 31, 2007.
SEC. 325. EXTENSION AND MODIFICATION OF DUTY SUSPENSION ON
WOOL PRODUCTS; WOOL RESEARCH FUND; WOOL DUTY
REFUNDS.
(a) Extension of Temporary Duty Reductions.--Each of the
following headings of the Harmonized Tariff Schedule of the
United States is amended by striking the date in the
effective period column and inserting ``12/31/2014'':
(1) Heading 9902.51.11 (relating to fabrics of worsted
wool).
(2) Heading 9902.51.13 (relating to yarn of combed wool).
(3) Heading 9902.51.14 (relating to wool fiber, waste,
garnetted stock, combed wool, or wool top).
(4) Heading 9902.51.15 (relating to fabrics of combed
wool).
(5) Heading 9902.51.16 (relating to fabrics of combed
wool).
(b) Extension of Duty Refunds and Wool Research Trust
Fund.--
(1) In general.--Section 4002(c) of the Wool Suit and
Textile Trade Extension Act of 2004 (Public Law 108-429; 118
Stat. 2603) is amended--
(A) in paragraph (3)(C), by striking ``2010'' and inserting
``2015''; and
(B) in paragraph (6)(A), by striking ``through 2009'' and
inserting ``through 2014''.
(2) Sunset.--Section 506(f) of the Trade and Development
Act of 2000 (Public 106-200; 114 Stat. 303 (7 U.S.C. 7101
note)) is amended by striking ``2010'' and inserting
``2015''.
TITLE IV--EXTENSION OF TAX ADMINISTRATION PROVISIONS
SEC. 401. PERMANENT AUTHORITY FOR UNDERCOVER OPERATIONS.
(a) In General.--Section 7608(c) (relating to rules
relating to undercover operations) is amended by striking
paragraph (6).
(b) Effective Date.--The amendment made by this section
shall apply to operations conducted after the date of the
enactment of this Act.
SEC. 402. PERMANENT AUTHORITY FOR DISCLOSURE OF INFORMATION
RELATING TO TERRORIST ACTIVITIES.
(a) Disclosure of Return Information to Apprise Appropriate
Officials of Terrorist Activities.--Subparagraph (C) of
section 6103(i)(3) is amended by striking clause (iv).
(b) Disclosure Upon Request of Information Relating to
Terrorist Activities.--Paragraph (7) of section 6103(i) is
amended by striking subparagraph (E).
(c) Effective Date.--The amendments made by this section
shall apply to disclosures after the date of the enactment of
this Act.
TITLE V--ADDITIONAL TAX RELIEF AND OTHER TAX PROVISIONS
Subtitle A--General Provisions
SEC. 501. $8,500 INCOME THRESHOLD USED TO CALCULATE
REFUNDABLE PORTION OF CHILD TAX CREDIT.
(a) In General.--Section 24(d) is amended by adding at the
end the following new paragraph:
``(4) Special rule for 2008.--Notwithstanding paragraph
(3), in the case of any taxable year beginning in 2008, the
dollar amount in effect for such taxable year under paragraph
(1)(B)(i) shall be $8,500.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 502. PROVISIONS RELATED TO FILM AND TELEVISION
PRODUCTIONS.
(a) Extension of Expensing Rules for Qualified Film and
Television Productions.--Section 181(f) (relating to
termination) is amended by striking ``December 31, 2008'' and
inserting ``December 31, 2009''.
(b) Modification of Limitation on Expensing.--Subparagraph
(A) of section 181(a)(2) is amended to read as follows:
``(A) In general.--Paragraph (1) shall not apply to so much
of the aggregate cost of any qualified film or television
production as exceeds $15,000,000.''.
(c) Modifications to Deduction for Domestic Activities.--
(1) Determination of w-2 wages.--Paragraph (2) of section
199(b) is amended by adding at the end the following new
subparagraph:
``(D) Special rule for qualified film.--In the case of a
qualified film, such term shall include compensation for
services performed in the United States by actors, production
personnel, directors, and producers.''.
(2) Definition of qualified film.--Paragraph (6) of section
199(c) is amended by adding at the end the following: ``A
qualified film shall include any copyrights, trademarks, or
other intangibles with respect to such film. The methods and
means of distributing a qualified film shall not affect the
availability of the deduction under this section.''.
(3) Partnerships.--Subparagraph (A) of section 199(d)(1) is
amended by striking ``and'' at the end of clause (ii), by
striking the period at the end of clause (iii) and inserting
``, and'', and by adding at the end the following new clause:
``(iv) in the case of each partner of a partnership, or
shareholder of an S corporation, who owns (directly or
indirectly) at least 20 percent of the capital interests in
such partnership or of the stock of such S corporation--
``(I) such partner or shareholder shall be treated as
having engaged directly in any film produced by such
partnership or S corporation, and
``(II) such partnership or S corporation shall be treated
as having engaged directly in any film produced by such
partner or shareholder.''.
(d) Conforming Amendment.--Section 181(d)(3)(A) is amended
by striking ``actors'' and all that follows and inserting
``actors, production personnel, directors, and producers.''.
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to qualified film and television productions commencing after
December 31, 2007.
(2) Deduction.--The amendments made by subsection (c) shall
apply to taxable years beginning after December 31, 2007.
SEC. 503. EXEMPTION FROM EXCISE TAX FOR CERTAIN WOODEN ARROWS
DESIGNED FOR USE BY CHILDREN.
(a) In General.--Paragraph (2) of section 4161(b) is
amended by redesignating subparagraph (B) as subparagraph (C)
and by inserting after subparagraph (A) the following new
subparagraph:
``(B) Exemption for certain wooden arrow shafts.--
Subparagraph (A) shall not apply to any shaft consisting of
all natural wood with no laminations or artificial means of
enhancing the spine of such shaft (whether sold separately or
incorporated as part of a finished or unfinished product) of
a type used in the manufacture of any arrow which after its
assembly--
``(i) measures \5/16\ of an inch or less in diameter, and
``(ii) is not suitable for use with a bow described in
paragraph (1)(A).''.
(b) Effective Date.--The amendments made by this section
shall apply to shafts first sold after the date of enactment
of this Act.
SEC. 504. INCOME AVERAGING FOR AMOUNTS RECEIVED IN CONNECTION
WITH THE EXXON VALDEZ LITIGATION.
(a) Income Averaging of Amounts Received From the Exxon
Valdez Litigation.--For purposes of section 1301 of the
Internal Revenue Code of 1986--
(1) any qualified taxpayer who receives any qualified
settlement income in any taxable year shall be treated as
engaged in a fishing business (determined without regard to
the commercial nature of the business), and
(2) such qualified settlement income shall be treated as
income attributable to such a fishing business for such
taxable year.
(b) Contributions of Amounts Received to Retirement
Accounts.--
(1) In general.--Any qualified taxpayer who receives
qualified settlement income during the taxable year may, at
any time before the end of the taxable year in which such
income was received, make one or more contributions to an
eligible retirement plan of which such qualified taxpayer is
a beneficiary in an aggregate amount not to exceed the lesser
of--
(A) $100,000 (reduced by the amount of qualified settlement
income contributed to an eligible retirement plan in prior
taxable years pursuant to this subsection), or
(B) the amount of qualified settlement income received by
the individual during the taxable year.
(2) Time when contributions deemed made.--For purposes of
paragraph (1), a qualified taxpayer shall be deemed to have
made a contribution to an eligible retirement plan on the
last day of the taxable year in which such income is received
if the contribution is made on account of such taxable year
and is made not later than the time prescribed by law for
filing the return for such taxable year (not including
extensions thereof).
[[Page 23696]]
(3) Treatment of contributions to eligible retirement
plans.--For purposes of the Internal Revenue Code of 1986, if
a contribution is made pursuant to paragraph (1) with respect
to qualified settlement income, then--
(A) except as provided in paragraph (4)--
(i) to the extent of such contribution, the qualified
settlement income shall not be included in taxable income,
and
(ii) for purposes of section 72 of such Code, such
contribution shall not be considered to be investment in the
contract,
(B) the qualified taxpayer shall, to the extent of the
amount of the contribution, be treated--
(i) as having received the qualified settlement income--
(I) in the case of a contribution to an individual
retirement plan (as defined under section 7701(a)(37) of such
Code), in a distribution described in section 408(d)(3) of
such Code, and
(II) in the case of any other eligible retirement plan, in
an eligible rollover distribution (as defined under section
402(f)(2) of such Code), and
(ii) as having transferred the amount to the eligible
retirement plan in a direct trustee to trustee transfer
within 60 days of the distribution,
(C) section 408(d)(3)(B) of the Internal Revenue Code of
1986 shall not apply with respect to amounts treated as a
rollover under this paragraph, and
(D) section 408A(c)(3)(B) of the Internal Revenue Code of
1986 shall not apply with respect to amounts contributed to a
Roth IRA (as defined under section 408A(b) of such Code) or a
designated Roth contribution to an applicable retirement plan
(within the meaning of section 402A of such Code) under this
paragraph.
(4) Special rule for roth iras and roth 401(k)s.--For
purposes of the Internal Revenue Code of 1986, if a
contribution is made pursuant to paragraph (1) with respect
to qualified settlement income to a Roth IRA (as defined
under section 408A(b) of such Code) or as a designated Roth
contribution to an applicable retirement plan (within the
meaning of section 402A of such Code), then--
(A) the qualified settlement income shall be includible in
taxable income, and
(B) for purposes of section 72 of such Code, such
contribution shall be considered to be investment in the
contract.
(5) Eligible retirement plan.--For purpose of this
subsection, the term ``eligible retirement plan'' has the
meaning given such term under section 402(c)(8)(B) of the
Internal Revenue Code of 1986.
(c) Treatment of Qualified Settlement Income Under
Employment Taxes.--
(1) SECA.--For purposes of chapter 2 of the Internal
Revenue Code of 1986 and section 211 of the Social Security
Act, no portion of qualified settlement income received by a
qualified taxpayer shall be treated as self-employment
income.
(2) FICA.--For purposes of chapter 21 of the Internal
Revenue Code of 1986 and section 209 of the Social Security
Act, no portion of qualified settlement income received by a
qualified taxpayer shall be treated as wages.
(d) Qualified Taxpayer.--For purposes of this section, the
term ``qualified taxpayer'' means--
(1) any individual who is a plaintiff in the civil action
In re Exxon Valdez, No. 89-095-CV (HRH) (Consolidated) (D.
Alaska); or
(2) any individual who is a beneficiary of the estate of
such a plaintiff who--
(A) acquired the right to receive qualified settlement
income from that plaintiff; and
(B) was the spouse or an immediate relative of that
plaintiff.
(e) Qualified Settlement Income.--For purposes of this
section, the term ``qualified settlement income'' means any
interest and punitive damage awards which are--
(1) otherwise includible in taxable income, and
(2) received (whether as lump sums or periodic payments) in
connection with the civil action In re Exxon Valdez, No. 89-
095-CV (HRH) (Consolidated) (D. Alaska) (whether pre- or
post-judgment and whether related to a settlement or
judgment).
SEC. 505. CERTAIN FARMING BUSINESS MACHINERY AND EQUIPMENT
TREATED AS 5-YEAR PROPERTY.
(a) In General.--Section 168(e)(3)(B) (defining 5-year
property) is amended by striking ``and'' at the end of clause
(v), by striking the period at the end of clause (vi)(III)
and inserting ``, and'', and by inserting after clause (vi)
the following new clause:
``(vii) any machinery or equipment (other than any grain
bin, cotton ginning asset, fence, or other land improvement)
which is used in a farming business (as defined in section
263A(e)(4)), the original use of which commences with the
taxpayer after December 31, 2008, and which is placed in
service before January 1, 2010.''.
(b) Alternative System.--The table contained in section
168(g)(3)(B) (relating to special rule for certain property
assigned to classes) is amended by inserting after the item
relating to subparagraph (B)(iii) the following:
(B)(vii)......................................................10''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
2008.
SEC. 506. MODIFICATION OF PENALTY ON UNDERSTATEMENT OF
TAXPAYER'S LIABILITY BY TAX RETURN PREPARER.
(a) In General.--Subsection (a) of section 6694 is amended
to read as follows:
``(a) Understatement Due to Unreasonable Positions.--
``(1) In general.--If a tax return preparer--
``(A) prepares any return or claim of refund with respect
to which any part of an understatement of liability is due to
a position described in paragraph (2), and
``(B) knew (or reasonably should have known) of the
position,
such tax return preparer shall pay a penalty with respect to
each such return or claim in an amount equal to the greater
of $1,000 or 50 percent of the income derived (or to be
derived) by the tax return preparer with respect to the
return or claim.
``(2) Unreasonable position.--
``(A) In general.--Except as otherwise provided in this
paragraph, a position is described in this paragraph unless
there is or was substantial authority for the position.
``(B) Disclosed positions.--If the position was disclosed
as provided in section 6662(d)(2)(B)(ii)(I) and is not a
position to which subparagraph (C) applies, the position is
described in this paragraph unless there is a reasonable
basis for the position.
``(C) Tax shelters and reportable transactions.--If the
position is with respect to a tax shelter (as defined in
section 6662(d)(2)(C)(ii)) or a reportable transaction to
which section 6662A applies, the position is described in
this paragraph unless it is reasonable to believe that the
position would more likely than not be sustained on its
merits.
``(3) Reasonable cause exception.--No penalty shall be
imposed under this subsection if it is shown that there is
reasonable cause for the understatement and the tax return
preparer acted in good faith.''.
(b) Effective Date.--The amendment made by this section
shall apply--
(1) in the case of a position other than a position
described in subparagraph (C) of section 6694(a)(2) of the
Internal Revenue Code of 1986 (as amended by this section),
to returns prepared after May 25, 2007, and
(2) in the case of a position described in such
subparagraph (C), to returns prepared for taxable years
ending after the date of the enactment of this Act.
Subtitle B--Paul Wellstone and Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008
SEC. 511. SHORT TITLE.
This subtitle may be cited as the ``Paul Wellstone and Pete
Domenici Mental Health Parity and Addiction Equity Act of
2008''.
SEC. 512. MENTAL HEALTH PARITY.
(a) Amendments to ERISA.--Section 712 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1185a) is
amended--
(1) in subsection (a), by adding at the end the following:
``(3) Financial requirements and treatment limitations.--
``(A) In general.--In the case of a group health plan (or
health insurance coverage offered in connection with such a
plan) that provides both medical and surgical benefits and
mental health or substance use disorder benefits, such plan
or coverage shall ensure that--
``(i) the financial requirements applicable to such mental
health or substance use disorder benefits are no more
restrictive than the predominant financial requirements
applied to substantially all medical and surgical benefits
covered by the plan (or coverage), and there are no separate
cost sharing requirements that are applicable only with
respect to mental health or substance use disorder benefits;
and
``(ii) the treatment limitations applicable to such mental
health or substance use disorder benefits are no more
restrictive than the predominant treatment limitations
applied to substantially all medical and surgical benefits
covered by the plan (or coverage) and there are no separate
treatment limitations that are applicable only with respect
to mental health or substance use disorder benefits.
``(B) Definitions.--In this paragraph:
``(i) Financial requirement.--The term `financial
requirement' includes deductibles, copayments, coinsurance,
and out-of-pocket expenses, but excludes an aggregate
lifetime limit and an annual limit subject to paragraphs (1)
and (2),
``(ii) Predominant.--A financial requirement or treatment
limit is considered to be predominant if it is the most
common or frequent of such type of limit or requirement.
``(iii) Treatment limitation.--The term `treatment
limitation' includes limits on the frequency of treatment,
number of visits, days of coverage, or other similar limits
on the scope or duration of treatment.
``(4) Availability of plan information.--The criteria for
medical necessity determinations made under the plan with
respect to mental health or substance use disorder benefits
(or the health insurance coverage offered in connection with
the plan with respect to such benefits) shall be made
available by the plan administrator (or the health insurance
issuer offering such coverage) in accordance with regulations
to any current or potential participant, beneficiary, or
contracting provider upon request. The reason
[[Page 23697]]
for any denial under the plan (or coverage) of reimbursement
or payment for services with respect to mental health or
substance use disorder benefits in the case of any
participant or beneficiary shall, on request or as otherwise
required, be made available by the plan administrator (or the
health insurance issuer offering such coverage) to the
participant or beneficiary in accordance with regulations.
``(5) Out-of-network providers.--In the case of a plan or
coverage that provides both medical and surgical benefits and
mental health or substance use disorder benefits, if the plan
or coverage provides coverage for medical or surgical
benefits provided by out-of-network providers, the plan or
coverage shall provide coverage for mental health or
substance use disorder benefits provided by out-of-network
providers in a manner that is consistent with the
requirements of this section.'';
(2) in subsection (b), by amending paragraph (2) to read as
follows:
``(2) in the case of a group health plan (or health
insurance coverage offered in connection with such a plan)
that provides mental health or substance use disorder
benefits, as affecting the terms and conditions of the plan
or coverage relating to such benefits under the plan or
coverage, except as provided in subsection (a).'';
(3) in subsection (c)--
(A) in paragraph (1)(B)--
(i) by inserting ``(or 1 in the case of an employer
residing in a State that permits small groups to include a
single individual)'' after ``at least 2'' the first place
that such appears; and
(ii) by striking ``and who employs at least 2 employees on
the first day of the plan year''; and
(B) by striking paragraph (2) and inserting the following:
``(2) Cost exemption.--
``(A) In general.--With respect to a group health plan (or
health insurance coverage offered in connection with such a
plan), if the application of this section to such plan (or
coverage) results in an increase for the plan year involved
of the actual total costs of coverage with respect to medical
and surgical benefits and mental health and substance use
disorder benefits under the plan (as determined and certified
under subparagraph (C)) by an amount that exceeds the
applicable percentage described in subparagraph (B) of the
actual total plan costs, the provisions of this section shall
not apply to such plan (or coverage) during the following
plan year, and such exemption shall apply to the plan (or
coverage) for 1 plan year. An employer may elect to continue
to apply mental health and substance use disorder parity
pursuant to this section with respect to the group health
plan (or coverage) involved regardless of any increase in
total costs.
``(B) Applicable percentage.--With respect to a plan (or
coverage), the applicable percentage described in this
subparagraph shall be--
``(i) 2 percent in the case of the first plan year in which
this section is applied; and
``(ii) 1 percent in the case of each subsequent plan year.
``(C) Determinations by actuaries.--Determinations as to
increases in actual costs under a plan (or coverage) for
purposes of this section shall be made and certified by a
qualified and licensed actuary who is a member in good
standing of the American Academy of Actuaries. All such
determinations shall be in a written report prepared by the
actuary. The report, and all underlying documentation relied
upon by the actuary, shall be maintained by the group health
plan or health insurance issuer for a period of 6 years
following the notification made under subparagraph (E).
``(D) 6-month determinations.--If a group health plan (or a
health insurance issuer offering coverage in connection with
a group health plan) seeks an exemption under this paragraph,
determinations under subparagraph (A) shall be made after
such plan (or coverage) has complied with this section for
the first 6 months of the plan year involved.
``(E) Notification.--
``(i) In general.--A group health plan (or a health
insurance issuer offering coverage in connection with a group
health plan) that, based upon a certification described under
subparagraph (C), qualifies for an exemption under this
paragraph, and elects to implement the exemption, shall
promptly notify the Secretary, the appropriate State
agencies, and participants and beneficiaries in the plan of
such election.
``(ii) Requirement.--A notification to the Secretary under
clause (i) shall include--
``(I) a description of the number of covered lives under
the plan (or coverage) involved at the time of the
notification, and as applicable, at the time of any prior
election of the cost-exemption under this paragraph by such
plan (or coverage);
``(II) for both the plan year upon which a cost exemption
is sought and the year prior, a description of the actual
total costs of coverage with respect to medical and surgical
benefits and mental health and substance use disorder
benefits under the plan; and
``(III) for both the plan year upon which a cost exemption
is sought and the year prior, the actual total costs of
coverage with respect to mental health and substance use
disorder benefits under the plan.
``(iii) Confidentiality.--A notification to the Secretary
under clause (i) shall be confidential. The Secretary shall
make available, upon request and on not more than an annual
basis, an anonymous itemization of such notifications, that
includes--
``(I) a breakdown of States by the size and type of
employers submitting such notification; and
``(II) a summary of the data received under clause (ii).
``(F) Audits by appropriate agencies.--To determine
compliance with this paragraph, the Secretary may audit the
books and records of a group health plan or health insurance
issuer relating to an exemption, including any actuarial
reports prepared pursuant to subparagraph (C), during the 6
year period following the notification of such exemption
under subparagraph (E). A State agency receiving a
notification under subparagraph (E) may also conduct such an
audit with respect to an exemption covered by such
notification.'';
(4) in subsection (e), by striking paragraph (4) and
inserting the following:
``(4) Mental health benefits.--The term `mental health
benefits' means benefits with respect to services for mental
health conditions, as defined under the terms of the plan and
in accordance with applicable Federal and State law.
``(5) Substance use disorder benefits.--The term `substance
use disorder benefits' means benefits with respect to
services for substance use disorders, as defined under the
terms of the plan and in accordance with applicable Federal
and State law.'';
(5) by striking subsection (f);
(6) by inserting after subsection (e) the following:
``(f) Secretary Report.--The Secretary shall, by January 1,
2012, and every two years thereafter, submit to the
appropriate committees of Congress a report on compliance of
group health plans (and health insurance coverage offered in
connection with such plans) with the requirements of this
section. Such report shall include the results of any surveys
or audits on compliance of group health plans (and health
insurance coverage offered in connection with such plans)
with such requirements and an analysis of the reasons for any
failures to comply.
``(g) Notice and Assistance.--The Secretary, in cooperation
with the Secretaries of Health and Human Services and
Treasury, as appropriate, shall publish and widely
disseminate guidance and information for group health plans,
participants and beneficiaries, applicable State and local
regulatory bodies, and the National Association of Insurance
Commissioners concerning the requirements of this section and
shall provide assistance concerning such requirements and the
continued operation of applicable State law. Such guidance
and information shall inform participants and beneficiaries
of how they may obtain assistance under this section,
including, where appropriate, assistance from State consumer
and insurance agencies.'';
(7) by striking ``mental health benefits'' and inserting
``mental health and substance use disorder benefits'' each
place it appears in subsections (a)(1)(B)(i), (a)(1)(C),
(a)(2)(B)(i), and (a)(2)(C); and
(8) by striking ``mental health benefits'' and inserting
``mental health or substance use disorder benefits'' each
place it appears (other than in any provision amended by the
previous paragraph).
(b) Amendments to Public Health Service Act.--Section 2705
of the Public Health Service Act (42 U.S.C. 300gg-5) is
amended--
(1) in subsection (a), by adding at the end the following:
``(3) Financial requirements and treatment limitations.--
``(A) In general.--In the case of a group health plan (or
health insurance coverage offered in connection with such a
plan) that provides both medical and surgical benefits and
mental health or substance use disorder benefits, such plan
or coverage shall ensure that--
``(i) the financial requirements applicable to such mental
health or substance use disorder benefits are no more
restrictive than the predominant financial requirements
applied to substantially all medical and surgical benefits
covered by the plan (or coverage), and there are no separate
cost sharing requirements that are applicable only with
respect to mental health or substance use disorder benefits;
and
``(ii) the treatment limitations applicable to such mental
health or substance use disorder benefits are no more
restrictive than the predominant treatment limitations
applied to substantially all medical and surgical benefits
covered by the plan (or coverage) and there are no separate
treatment limitations that are applicable only with respect
to mental health or substance use disorder benefits.
``(B) Definitions.--In this paragraph:
``(i) Financial requirement.--The term `financial
requirement' includes deductibles, copayments, coinsurance,
and out-of-pocket expenses, but excludes an aggregate
lifetime limit and an annual limit subject to paragraphs (1)
and (2).
``(ii) Predominant.--A financial requirement or treatment
limit is considered to be predominant if it is the most
common or frequent of such type of limit or requirement.
[[Page 23698]]
``(iii) Treatment limitation.--The term `treatment
limitation' includes limits on the frequency of treatment,
number of visits, days of coverage, or other similar limits
on the scope or duration of treatment.
``(4) Availability of plan information.--The criteria for
medical necessity determinations made under the plan with
respect to mental health or substance use disorder benefits
(or the health insurance coverage offered in connection with
the plan with respect to such benefits) shall be made
available by the plan administrator (or the health insurance
issuer offering such coverage) in accordance with regulations
to any current or potential participant, beneficiary, or
contracting provider upon request. The reason for any denial
under the plan (or coverage) of reimbursement or payment for
services with respect to mental health or substance use
disorder benefits in the case of any participant or
beneficiary shall, on request or as otherwise required, be
made available by the plan administrator (or the health
insurance issuer offering such coverage) to the participant
or beneficiary in accordance with regulations.
``(5) Out-of-network providers.--In the case of a plan or
coverage that provides both medical and surgical benefits and
mental health or substance use disorder benefits, if the plan
or coverage provides coverage for medical or surgical
benefits provided by out-of-network providers, the plan or
coverage shall provide coverage for mental health or
substance use disorder benefits provided by out-of-network
providers in a manner that is consistent with the
requirements of this section.'';
(2) in subsection (b), by amending paragraph (2) to read as
follows:
``(2) in the case of a group health plan (or health
insurance coverage offered in connection with such a plan)
that provides mental health or substance use disorder
benefits, as affecting the terms and conditions of the plan
or coverage relating to such benefits under the plan or
coverage, except as provided in subsection (a).'';
(3) in subsection (c)--
(A) in paragraph (1), by inserting before the period the
following: ``(as defined in section 2791(e)(4), except that
for purposes of this paragraph such term shall include
employers with 1 employee in the case of an employer residing
in a State that permits small groups to include a single
individual)''; and
(B) by striking paragraph (2) and inserting the following:
``(2) Cost exemption.--
``(A) In general.--With respect to a group health plan (or
health insurance coverage offered in connection with such a
plan), if the application of this section to such plan (or
coverage) results in an increase for the plan year involved
of the actual total costs of coverage with respect to medical
and surgical benefits and mental health and substance use
disorder benefits under the plan (as determined and certified
under subparagraph (C)) by an amount that exceeds the
applicable percentage described in subparagraph (B) of the
actual total plan costs, the provisions of this section shall
not apply to such plan (or coverage) during the following
plan year, and such exemption shall apply to the plan (or
coverage) for 1 plan year. An employer may elect to continue
to apply mental health and substance use disorder parity
pursuant to this section with respect to the group health
plan (or coverage) involved regardless of any increase in
total costs.
``(B) Applicable percentage.--With respect to a plan (or
coverage), the applicable percentage described in this
subparagraph shall be--
``(i) 2 percent in the case of the first plan year in which
this section is applied; and
``(ii) 1 percent in the case of each subsequent plan year.
``(C) Determinations by actuaries.--Determinations as to
increases in actual costs under a plan (or coverage) for
purposes of this section shall be made and certified by a
qualified and licensed actuary who is a member in good
standing of the American Academy of Actuaries. All such
determinations shall be in a written report prepared by the
actuary. The report, and all underlying documentation relied
upon by the actuary, shall be maintained by the group health
plan or health insurance issuer for a period of 6 years
following the notification made under subparagraph (E).
``(D) 6-month determinations.--If a group health plan (or a
health insurance issuer offering coverage in connection with
a group health plan) seeks an exemption under this paragraph,
determinations under subparagraph (A) shall be made after
such plan (or coverage) has complied with this section for
the first 6 months of the plan year involved.
``(E) Notification.--
``(i) In general.--A group health plan (or a health
insurance issuer offering coverage in connection with a group
health plan) that, based upon a certification described under
subparagraph (C), qualifies for an exemption under this
paragraph, and elects to implement the exemption, shall
promptly notify the Secretary, the appropriate State
agencies, and participants and beneficiaries in the plan of
such election.
``(ii) Requirement.--A notification to the Secretary under
clause (i) shall include--
``(I) a description of the number of covered lives under
the plan (or coverage) involved at the time of the
notification, and as applicable, at the time of any prior
election of the cost-exemption under this paragraph by such
plan (or coverage);
``(II) for both the plan year upon which a cost exemption
is sought and the year prior, a description of the actual
total costs of coverage with respect to medical and surgical
benefits and mental health and substance use disorder
benefits under the plan; and
``(III) for both the plan year upon which a cost exemption
is sought and the year prior, the actual total costs of
coverage with respect to mental health and substance use
disorder benefits under the plan.
``(iii) Confidentiality.--A notification to the Secretary
under clause (i) shall be confidential. The Secretary shall
make available, upon request and on not more than an annual
basis, an anonymous itemization of such notifications, that
includes--
``(I) a breakdown of States by the size and type of
employers submitting such notification; and
``(II) a summary of the data received under clause (ii).
``(F) Audits by appropriate agencies.--To determine
compliance with this paragraph, the Secretary may audit the
books and records of a group health plan or health insurance
issuer relating to an exemption, including any actuarial
reports prepared pursuant to subparagraph (C), during the 6
year period following the notification of such exemption
under subparagraph (E). A State agency receiving a
notification under subparagraph (E) may also conduct such an
audit with respect to an exemption covered by such
notification.'';
(4) in subsection (e), by striking paragraph (4) and
inserting the following:
``(4) Mental health benefits.--The term `mental health
benefits' means benefits with respect to services for mental
health conditions, as defined under the terms of the plan and
in accordance with applicable Federal and State law.
``(5) Substance use disorder benefits.--The term `substance
use disorder benefits' means benefits with respect to
services for substance use disorders, as defined under the
terms of the plan and in accordance with applicable Federal
and State law.'';
(5) by striking subsection (f);
(6) by striking ``mental health benefits'' and inserting
``mental health and substance use disorder benefits'' each
place it appears in subsections (a)(1)(B)(i), (a)(1)(C),
(a)(2)(B)(i), and (a)(2)(C); and
(7) by striking ``mental health benefits'' and inserting
``mental health or substance use disorder benefits'' each
place it appears (other than in any provision amended by the
previous paragraph).
(c) Amendments to Internal Revenue Code.--Section 9812 of
the Internal Revenue Code of 1986 is amended--
(1) in subsection (a), by adding at the end the following:
``(3) Financial requirements and treatment limitations.--
``(A) In general.--In the case of a group health plan that
provides both medical and surgical benefits and mental health
or substance use disorder benefits, such plan shall ensure
that--
``(i) the financial requirements applicable to such mental
health or substance use disorder benefits are no more
restrictive than the predominant financial requirements
applied to substantially all medical and surgical benefits
covered by the plan, and there are no separate cost sharing
requirements that are applicable only with respect to mental
health or substance use disorder benefits; and
``(ii) the treatment limitations applicable to such mental
health or substance use disorder benefits are no more
restrictive than the predominant treatment limitations
applied to substantially all medical and surgical benefits
covered by the plan and there are no separate treatment
limitations that are applicable only with respect to mental
health or substance use disorder benefits.
``(B) Definitions.--In this paragraph:
``(i) Financial requirement.--The term `financial
requirement' includes deductibles, copayments, coinsurance,
and out-of-pocket expenses, but excludes an aggregate
lifetime limit and an annual limit subject to paragraphs (1)
and (2),
``(ii) Predominant.--A financial requirement or treatment
limit is considered to be predominant if it is the most
common or frequent of such type of limit or requirement.
``(iii) Treatment limitation.--The term `treatment
limitation' includes limits on the frequency of treatment,
number of visits, days of coverage, or other similar limits
on the scope or duration of treatment.
``(4) Availability of plan information.--The criteria for
medical necessity determinations made under the plan with
respect to mental health or substance use disorder benefits
shall be made available by the plan administrator in
accordance with regulations to any current or potential
participant, beneficiary, or contracting provider upon
request. The reason for any denial under the plan of
reimbursement or payment for services with respect to mental
health or substance use disorder benefits in the case of any
participant or beneficiary shall, on request or as otherwise
required, be made
[[Page 23699]]
available by the plan administrator to the participant or
beneficiary in accordance with regulations.
``(5) Out-of-network providers.--In the case of a plan that
provides both medical and surgical benefits and mental health
or substance use disorder benefits, if the plan provides
coverage for medical or surgical benefits provided by out-of-
network providers, the plan shall provide coverage for mental
health or substance use disorder benefits provided by out-of-
network providers in a manner that is consistent with the
requirements of this section.'';
(2) in subsection (b), by amending paragraph (2) to read as
follows:
``(2) in the case of a group health plan that provides
mental health or substance use disorder benefits, as
affecting the terms and conditions of the plan relating to
such benefits under the plan, except as provided in
subsection (a).'';
(3) in subsection (c)--
(A) by amending paragraph (1) to read as follows:
``(1) Small employer exemption.--
``(A) In general.--This section shall not apply to any
group health plan for any plan year of a small employer.
``(B) Small employer.--For purposes of subparagraph (A),
the term `small employer' means, with respect to a calendar
year and a plan year, an employer who employed an average of
at least 2 (or 1 in the case of an employer residing in a
State that permits small groups to include a single
individual) but not more than 50 employees on business days
during the preceding calendar year. For purposes of the
preceding sentence, all persons treated as a single employer
under subsection (b), (c), (m), or (o) of section 414 shall
be treated as 1 employer and rules similar to rules of
subparagraphs (B) and (C) of section 4980D(d)(2) shall
apply.''; and
(B) by striking paragraph (2) and inserting the following:
``(2) Cost exemption.--
``(A) In general.--With respect to a group health plan, if
the application of this section to such plan results in an
increase for the plan year involved of the actual total costs
of coverage with respect to medical and surgical benefits and
mental health and substance use disorder benefits under the
plan (as determined and certified under subparagraph (C)) by
an amount that exceeds the applicable percentage described in
subparagraph (B) of the actual total plan costs, the
provisions of this section shall not apply to such plan
during the following plan year, and such exemption shall
apply to the plan for 1 plan year. An employer may elect to
continue to apply mental health and substance use disorder
parity pursuant to this section with respect to the group
health plan involved regardless of any increase in total
costs.
``(B) Applicable percentage.--With respect to a plan, the
applicable percentage described in this subparagraph shall
be--
``(i) 2 percent in the case of the first plan year in which
this section is applied; and
``(ii) 1 percent in the case of each subsequent plan year.
``(C) Determinations by actuaries.--Determinations as to
increases in actual costs under a plan for purposes of this
section shall be made and certified by a qualified and
licensed actuary who is a member in good standing of the
American Academy of Actuaries. All such determinations shall
be in a written report prepared by the actuary. The report,
and all underlying documentation relied upon by the actuary,
shall be maintained by the group health plan for a period of
6 years following the notification made under subparagraph
(E).
``(D) 6-month determinations.--If a group health plan seeks
an exemption under this paragraph, determinations under
subparagraph (A) shall be made after such plan has complied
with this section for the first 6 months of the plan year
involved.
``(E) Notification.--
``(i) In general.--A group health plan that, based upon a
certification described under subparagraph (C), qualifies for
an exemption under this paragraph, and elects to implement
the exemption, shall promptly notify the Secretary, the
appropriate State agencies, and participants and
beneficiaries in the plan of such election.
``(ii) Requirement.--A notification to the Secretary under
clause (i) shall include--
``(I) a description of the number of covered lives under
the plan involved at the time of the notification, and as
applicable, at the time of any prior election of the cost-
exemption under this paragraph by such plan;
``(II) for both the plan year upon which a cost exemption
is sought and the year prior, a description of the actual
total costs of coverage with respect to medical and surgical
benefits and mental health and substance use disorder
benefits under the plan; and
``(III) for both the plan year upon which a cost exemption
is sought and the year prior, the actual total costs of
coverage with respect to mental health and substance use
disorder benefits under the plan.
``(iii) Confidentiality.--A notification to the Secretary
under clause (i) shall be confidential. The Secretary shall
make available, upon request and on not more than an annual
basis, an anonymous itemization of such notifications, that
includes--
``(I) a breakdown of States by the size and type of
employers submitting such notification; and
``(II) a summary of the data received under clause (ii).
``(F) Audits by appropriate agencies.--To determine
compliance with this paragraph, the Secretary may audit the
books and records of a group health plan relating to an
exemption, including any actuarial reports prepared pursuant
to subparagraph (C), during the 6 year period following the
notification of such exemption under subparagraph (E). A
State agency receiving a notification under subparagraph (E)
may also conduct such an audit with respect to an exemption
covered by such notification.'';
(4) in subsection (e), by striking paragraph (4) and
inserting the following:
``(4) Mental health benefits.--The term `mental health
benefits' means benefits with respect to services for mental
health conditions, as defined under the terms of the plan and
in accordance with applicable Federal and State law.
``(5) Substance use disorder benefits.--The term `substance
use disorder benefits' means benefits with respect to
services for substance use disorders, as defined under the
terms of the plan and in accordance with applicable Federal
and State law.'';
(5) by striking subsection (f);
(6) by striking ``mental health benefits'' and inserting
``mental health and substance use disorder benefits'' each
place it appears in subsections (a)(1)(B)(i), (a)(1)(C),
(a)(2)(B)(i), and (a)(2)(C); and
(7) by striking ``mental health benefits'' and inserting
``mental health or substance use disorder benefits'' each
place it appears (other than in any provision amended by the
previous paragraph).
(d) Regulations.--Not later than 1 year after the date of
enactment of this Act, the Secretaries of Labor, Health and
Human Services, and the Treasury shall issue regulations to
carry out the amendments made by subsections (a), (b), and
(c), respectively.
(e) Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to group health plans for plan years
beginning after the date that is 1 year after the date of
enactment of this Act, regardless of whether regulations have
been issued to carry out such amendments by such effective
date, except that the amendments made by subsections (a)(5),
(b)(5), and (c)(5), relating to striking of certain sunset
provisions, shall take effect on January 1, 2009.
(2) Special rule for collective bargaining agreements.--In
the case of a group health plan maintained pursuant to one or
more collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, the amendments made by
this section shall not apply to plan years beginning before
the later of--
(A) the date on which the last of the collective bargaining
agreements relating to the plan terminates (determined
without regard to any extension thereof agreed to after the
date of the enactment of this Act), or
(B) January 1, 2009.
For purposes of subparagraph (A), any plan amendment made
pursuant to a collective bargaining agreement relating to the
plan which amends the plan solely to conform to any
requirement added by this section shall not be treated as a
termination of such collective bargaining agreement.
(f) Assuring Coordination.--The Secretary of Health and
Human Services, the Secretary of Labor, and the Secretary of
the Treasury may ensure, through the execution or revision of
an interagency memorandum of understanding among such
Secretaries, that--
(1) regulations, rulings, and interpretations issued by
such Secretaries relating to the same matter over which two
or more such Secretaries have responsibility under this
section (and the amendments made by this section) are
administered so as to have the same effect at all times; and
(2) coordination of policies relating to enforcing the same
requirements through such Secretaries in order to have a
coordinated enforcement strategy that avoids duplication of
enforcement efforts and assigns priorities in enforcement.
(g) Conforming Clerical Amendments.--
(1) ERISA heading.--
(A) In general.--The heading of section 712 of the Employee
Retirement Income Security Act of 1974 is amended to read as
follows:
``SEC. 712. PARITY IN MENTAL HEALTH AND SUBSTANCE USE
DISORDER BENEFITS.''.
(B) Clerical amendment.--The table of contents in section 1
of such Act is amended by striking the item relating to
section 712 and inserting the following new item:
``Sec. 712. Parity in mental health and substance use disorder
benefits.''.
(2) PHSA heading.--The heading of section 2705 of the
Public Health Service Act is amended to read as follows:
``SEC. 2705. PARITY IN MENTAL HEALTH AND SUBSTANCE USE
DISORDER BENEFITS.''.
(3) IRC heading.--
(A) In general.--The heading of section 9812 of the
Internal Revenue Code of 1986 is amended to read as follows:
[[Page 23700]]
``SEC. 9812. PARITY IN MENTAL HEALTH AND SUBSTANCE USE
DISORDER BENEFITS.''.
(B) Clerical amendment.--The table of sections for
subchapter B of chapter 100 of such Code is amended by
striking the item relating to section 9812 and inserting the
following new item:
``Sec. 9812. Parity in mental health and substance use disorder
benefits.''.
(h) GAO Study on Coverage and Exclusion of Mental Health
and Substance Use Disorder Diagnoses.--
(1) In general.--The Comptroller General of the United
States shall conduct a study that analyzes the specific
rates, patterns, and trends in coverage and exclusion of
specific mental health and substance use disorder diagnoses
by health plans and health insurance. The study shall include
an analysis of--
(A) specific coverage rates for all mental health
conditions and substance use disorders;
(B) which diagnoses are most commonly covered or excluded;
(C) whether implementation of this Act has affected trends
in coverage or exclusion of such diagnoses; and
(D) the impact of covering or excluding specific diagnoses
on participants' and enrollees' health, their health care
coverage, and the costs of delivering health care.
(2) Reports.--Not later than 3 years after the date of the
enactment of this Act, and 2 years after the date of
submission the first report under this paragraph, the
Comptroller General shall submit to Congress a report on the
results of the study conducted under paragraph (1).
TITLE VI--OTHER PROVISIONS
SEC. 601. SECURE RURAL SCHOOLS AND COMMUNITY SELF-
DETERMINATION PROGRAM.
(a) Reauthorization of the Secure Rural Schools and
Community Self-Determination Act of 2000.--The Secure Rural
Schools and Community Self-Determination Act of 2000 (16
U.S.C. 500 note; Public Law 106-393) is amended by striking
sections 1 through 403 and inserting the following:
``SECTION 1. SHORT TITLE.
``This Act may be cited as the `Secure Rural Schools and
Community Self-Determination Act of 2000'.
``SEC. 2. PURPOSES.
``The purposes of this Act are--
``(1) to stabilize and transition payments to counties to
provide funding for schools and roads that supplements other
available funds;
``(2) to make additional investments in, and create
additional employment opportunities through, projects that--
``(A)(i) improve the maintenance of existing
infrastructure;
``(ii) implement stewardship objectives that enhance forest
ecosystems; and
``(iii) restore and improve land health and water quality;
``(B) enjoy broad-based support; and
``(C) have objectives that may include--
``(i) road, trail, and infrastructure maintenance or
obliteration;
``(ii) soil productivity improvement;
``(iii) improvements in forest ecosystem health;
``(iv) watershed restoration and maintenance;
``(v) the restoration, maintenance, and improvement of
wildlife and fish habitat;
``(vi) the control of noxious and exotic weeds; and
``(vii) the reestablishment of native species; and
``(3) to improve cooperative relationships among--
``(A) the people that use and care for Federal land; and
``(B) the agencies that manage the Federal land.
``SEC. 3. DEFINITIONS.
``In this Act:
``(1) Adjusted share.--The term `adjusted share' means the
number equal to the quotient obtained by dividing--
``(A) the number equal to the quotient obtained by
dividing--
``(i) the base share for the eligible county; by
``(ii) the income adjustment for the eligible county; by
``(B) the number equal to the sum of the quotients obtained
under subparagraph (A) and paragraph (8)(A) for all eligible
counties.
``(2) Base share.--The term `base share' means the number
equal to the average of--
``(A) the quotient obtained by dividing--
``(i) the number of acres of Federal land described in
paragraph (7)(A) in each eligible county; by
``(ii) the total number acres of Federal land in all
eligible counties in all eligible States; and
``(B) the quotient obtained by dividing--
``(i) the amount equal to the average of the 3 highest 25-
percent payments and safety net payments made to each
eligible State for each eligible county during the
eligibility period; by
``(ii) the amount equal to the sum of the amounts
calculated under clause (i) and paragraph (9)(B)(i) for all
eligible counties in all eligible States during the
eligibility period.
``(3) County payment.--The term `county payment' means the
payment for an eligible county calculated under section
101(b).
``(4) Eligible county.--The term `eligible county' means
any county that--
``(A) contains Federal land (as defined in paragraph (7));
and
``(B) elects to receive a share of the State payment or the
county payment under section 102(b).
``(5) Eligibility period.--The term `eligibility period'
means fiscal year 1986 through fiscal year 1999.
``(6) Eligible state.--The term `eligible State' means a
State or territory of the United States that received a 25-
percent payment for 1 or more fiscal years of the eligibility
period.
``(7) Federal land.--The term `Federal land' means--
``(A) land within the National Forest System, as defined in
section 11(a) of the Forest and Rangeland Renewable Resources
Planning Act of 1974 (16 U.S.C. 1609(a)) exclusive of the
National Grasslands and land utilization projects designated
as National Grasslands administered pursuant to the Act of
July 22, 1937 (7 U.S.C. 1010-1012); and
``(B) such portions of the revested Oregon and California
Railroad and reconveyed Coos Bay Wagon Road grant land as are
or may hereafter come under the jurisdiction of the
Department of the Interior, which have heretofore or may
hereafter be classified as timberlands, and power-site land
valuable for timber, that shall be managed, except as
provided in the former section 3 of the Act of August 28,
1937 (50 Stat. 875; 43 U.S.C. 1181c), for permanent forest
production.
``(8) 50-Percent adjusted share.--The term `50-percent
adjusted share' means the number equal to the quotient
obtained by dividing--
``(A) the number equal to the quotient obtained by
dividing--
``(i) the 50-percent base share for the eligible county; by
``(ii) the income adjustment for the eligible county; by
``(B) the number equal to the sum of the quotients obtained
under subparagraph (A) and paragraph (1)(A) for all eligible
counties.
``(9) 50-Percent base share.--The term `50-percent base
share' means the number equal to the average of--
``(A) the quotient obtained by dividing--
``(i) the number of acres of Federal land described in
paragraph (7)(B) in each eligible county; by
``(ii) the total number acres of Federal land in all
eligible counties in all eligible States; and
``(B) the quotient obtained by dividing--
``(i) the amount equal to the average of the 3 highest 50-
percent payments made to each eligible county during the
eligibility period; by
``(ii) the amount equal to the sum of the amounts
calculated under clause (i) and paragraph (2)(B)(i) for all
eligible counties in all eligible States during the
eligibility period.
``(10) 50-percent payment.--The term `50-percent payment'
means the payment that is the sum of the 50-percent share
otherwise paid to a county pursuant to title II of the Act of
August 28, 1937 (chapter 876; 50 Stat. 875; 43 U.S.C. 1181f),
and the payment made to a county pursuant to the Act of May
24, 1939 (chapter 144; 53 Stat. 753; 43 U.S.C. 1181f-1 et
seq.).
``(11) Full funding amount.--The term `full funding amount'
means--
``(A) $500,000,000 for fiscal year 2008; and
``(B) for fiscal year 2009 and each fiscal year thereafter,
the amount that is equal to 90 percent of the full funding
amount for the preceding fiscal year.
``(12) Income adjustment.--The term `income adjustment'
means the square of the quotient obtained by dividing--
``(A) the per capita personal income for each eligible
county; by
``(B) the median per capita personal income of all eligible
counties.
``(13) Per capita personal income.--The term `per capita
personal income' means the most recent per capita personal
income data, as determined by the Bureau of Economic
Analysis.
``(14) Safety net payments.--The term `safety net payments'
means the special payment amounts paid to States and counties
required by section 13982 or 13983 of the Omnibus Budget
Reconciliation Act of 1993 (Public Law 103-66; 16 U.S.C. 500
note; 43 U.S.C. 1181f note).
``(15) Secretary concerned.--The term `Secretary concerned'
means--
``(A) the Secretary of Agriculture or the designee of the
Secretary of Agriculture with respect to the Federal land
described in paragraph (7)(A); and
``(B) the Secretary of the Interior or the designee of the
Secretary of the Interior with respect to the Federal land
described in paragraph (7)(B).
``(16) State payment.--The term `State payment' means the
payment for an eligible State calculated under section
101(a).
``(17) 25-Percent payment.--The term `25-percent payment'
means the payment to States required by the sixth paragraph
under the heading of `FOREST SERVICE' in the Act of May 23,
1908 (35 Stat. 260; 16 U.S.C. 500), and section 13 of the Act
of March 1, 1911 (36 Stat. 963; 16 U.S.C. 500).
[[Page 23701]]
``TITLE I--SECURE PAYMENTS FOR STATES AND COUNTIES CONTAINING FEDERAL
LAND
``SEC. 101. SECURE PAYMENTS FOR STATES CONTAINING FEDERAL
LAND.
``(a) State Payment.--For each of fiscal years 2008 through
2011, the Secretary of Agriculture shall calculate for each
eligible State an amount equal to the sum of the products
obtained by multiplying--
``(1) the adjusted share for each eligible county within
the eligible State; by
``(2) the full funding amount for the fiscal year.
``(b) County Payment.--For each of fiscal years 2008
through 2011, the Secretary of the Interior shall calculate
for each eligible county that received a 50-percent payment
during the eligibility period an amount equal to the product
obtained by multiplying--
``(1) the 50-percent adjusted share for the eligible
county; by
``(2) the full funding amount for the fiscal year.
``SEC. 102. PAYMENTS TO STATES AND COUNTIES.
``(a) Payment Amounts.--Except as provided in section 103,
the Secretary of the Treasury shall pay to--
``(1) a State or territory of the United States an amount
equal to the sum of the amounts elected under subsection (b)
by each county within the State or territory for--
``(A) if the county is eligible for the 25-percent payment,
the share of the 25-percent payment; or
``(B) the share of the State payment of the eligible
county; and
``(2) a county an amount equal to the amount elected under
subsection (b) by each county for--
``(A) if the county is eligible for the 50-percent payment,
the 50-percent payment; or
``(B) the county payment for the eligible county.
``(b) Election To Receive Payment Amount.--
``(1) Election; submission of results.--
``(A) In general.--The election to receive a share of the
State payment, the county payment, a share of the State
payment and the county payment, a share of the 25-percent
payment, the 50-percent payment, or a share of the 25-percent
payment and the 50-percent payment, as applicable, shall be
made at the discretion of each affected county by August 1,
2008 (or as soon thereafter as the Secretary concerned
determines is practicable), and August 1 of each second
fiscal year thereafter, in accordance with paragraph (2), and
transmitted to the Secretary concerned by the Governor of
each eligible State.
``(B) Failure to transmit.--If an election for an affected
county is not transmitted to the Secretary concerned by the
date specified under subparagraph (A), the affected county
shall be considered to have elected to receive a share of the
State payment, the county payment, or a share of the State
payment and the county payment, as applicable.
``(2) Duration of election.--
``(A) In general.--A county election to receive a share of
the 25-percent payment or 50-percent payment, as applicable,
shall be effective for 2 fiscal years.
``(B) Full funding amount.--If a county elects to receive a
share of the State payment or the county payment, the
election shall be effective for all subsequent fiscal years
through fiscal year 2011.
``(3) Source of payment amounts.--The payment to an
eligible State or eligible county under this section for a
fiscal year shall be derived from--
``(A) any amounts that are appropriated to carry out this
Act;
``(B) any revenues, fees, penalties, or miscellaneous
receipts, exclusive of deposits to any relevant trust fund,
special account, or permanent operating funds, received by
the Federal Government from activities by the Bureau of Land
Management or the Forest Service on the applicable Federal
land; and
``(C) to the extent of any shortfall, out of any amounts in
the Treasury of the United States not otherwise appropriated.
``(c) Distribution and Expenditure of Payments.--
``(1) Distribution method.--A State that receives a payment
under subsection (a) for Federal land described in section
3(7)(A) shall distribute the appropriate payment amount among
the appropriate counties in the State in accordance with--
``(A) the Act of May 23, 1908 (16 U.S.C. 500); and
``(B) section 13 of the Act of March 1, 1911 (36 Stat. 963;
16 U.S.C. 500).
``(2) Expenditure purposes.--Subject to subsection (d),
payments received by a State under subsection (a) and
distributed to counties in accordance with paragraph (1)
shall be expended as required by the laws referred to in
paragraph (1).
``(d) Expenditure Rules for Eligible Counties.--
``(1) Allocations.--
``(A) Use of portion in same manner as 25-percent payment
or 50-percent payment, as applicable.--Except as provided in
paragraph (3)(B), if an eligible county elects to receive its
share of the State payment or the county payment, not less
than 80 percent, but not more than 85 percent, of the funds
shall be expended in the same manner in which the 25-percent
payments or 50-percent payment, as applicable, are required
to be expended.
``(B) Election as to use of balance.--Except as provided in
subparagraph (C), an eligible county shall elect to do 1 or
more of the following with the balance of any funds not
expended pursuant to subparagraph (A):
``(i) Reserve any portion of the balance for projects in
accordance with title II.
``(ii) Reserve not more than 7 percent of the total share
for the eligible county of the State payment or the county
payment for projects in accordance with title III.
``(iii) Return the portion of the balance not reserved
under clauses (i) and (ii) to the Treasury of the United
States.
``(C) Counties with modest distributions.--In the case of
each eligible county to which more than $100,000, but less
than $350,000, is distributed for any fiscal year pursuant to
either or both of paragraphs (1)(B) and (2)(B) of subsection
(a), the eligible county, with respect to the balance of any
funds not expended pursuant to subparagraph (A) for that
fiscal year, shall--
``(i) reserve any portion of the balance for--
``(I) carrying out projects under title II;
``(II) carrying out projects under title III; or
``(III) a combination of the purposes described in
subclauses (I) and (II); or
``(ii) return the portion of the balance not reserved under
clause (i) to the Treasury of the United States.
``(2) Distribution of funds.--
``(A) In general.--Funds reserved by an eligible county
under subparagraph (B)(i) or (C)(i) of paragraph (1) for
carrying out projects under title II shall be deposited in a
special account in the Treasury of the United States.
``(B) Availability.--Amounts deposited under subparagraph
(A) shall--
``(i) be available for expenditure by the Secretary
concerned, without further appropriation; and
``(ii) remain available until expended in accordance with
title II.
``(3) Election.--
``(A) Notification.--
``(i) In general.--An eligible county shall notify the
Secretary concerned of an election by the eligible county
under this subsection not later than September 30, 2008 (or
as soon thereafter as the Secretary concerned determines is
practicable), and each September 30 thereafter for each
succeeding fiscal year.
``(ii) Failure to elect.--Except as provided in
subparagraph (B), if the eligible county fails to make an
election by the date specified in clause (i), the eligible
county shall--
``(I) be considered to have elected to expend 85 percent of
the funds in accordance with paragraph (1)(A); and
``(II) return the balance to the Treasury of the United
States.
``(B) Counties with minor distributions.--In the case of
each eligible county to which less than $100,000 is
distributed for any fiscal year pursuant to either or both of
paragraphs (1)(B) and (2)(B) of subsection (a), the eligible
county may elect to expend all the funds in the same manner
in which the 25-percent payments or 50-percent payments, as
applicable, are required to be expended.
``(e) Time for Payment.--The payments required under this
section for a fiscal year shall be made as soon as
practicable after the end of that fiscal year.
``SEC. 103. TRANSITION PAYMENTS TO STATES.
``(a) Definitions.--In this section:
``(1) Adjusted amount.--The term `adjusted amount' means,
with respect to a covered State--
``(A) for fiscal year 2008, 90 percent of--
``(i) the sum of the amounts paid for fiscal year 2006
under section 102(a)(2) (as in effect on September 29, 2006)
for the eligible counties in the covered State that have
elected under section 102(b) to receive a share of the State
payment for fiscal year 2008; and
``(ii) the sum of the amounts paid for fiscal year 2006
under section 103(a)(2) (as in effect on September 29, 2006)
for the eligible counties in the State of Oregon that have
elected under section 102(b) to receive the county payment
for fiscal year 2008;
``(B) for fiscal year 2009, 81 percent of--
``(i) the sum of the amounts paid for fiscal year 2006
under section 102(a)(2) (as in effect on September 29, 2006)
for the eligible counties in the covered State that have
elected under section 102(b) to receive a share of the State
payment for fiscal year 2009; and
``(ii) the sum of the amounts paid for fiscal year 2006
under section 103(a)(2) (as in effect on September 29, 2006)
for the eligible counties in the State of Oregon that have
elected under section 102(b) to receive the county payment
for fiscal year 2009; and
``(C) for fiscal year 2010, 73 percent of--
``(i) the sum of the amounts paid for fiscal year 2006
under section 102(a)(2) (as in effect on September 29, 2006)
for the eligible counties in the covered State that have
elected under section 102(b) to receive a share of the State
payment for fiscal year 2010; and
``(ii) the sum of the amounts paid for fiscal year 2006
under section 103(a)(2) (as in effect on September 29, 2006)
for the eligible counties in the State of Oregon that have
elected under section 102(b) to receive the county payment
for fiscal year 2010.
[[Page 23702]]
``(2) Covered state.--The term `covered State' means each
of the States of California, Louisiana, Oregon, Pennsylvania,
South Carolina, South Dakota, Texas, and Washington.
``(b) Transition Payments.--For each of fiscal years 2008
through 2010, in lieu of the payment amounts that otherwise
would have been made under paragraphs (1)(B) and (2)(B) of
section 102(a), the Secretary of the Treasury shall pay the
adjusted amount to each covered State and the eligible
counties within the covered State, as applicable.
``(c) Distribution of Adjusted Amount.--Except as provided
in subsection (d), it is the intent of Congress that the
method of distributing the payments under subsection (b)
among the counties in the covered States for each of fiscal
years 2008 through 2010 be in the same proportion that the
payments were distributed to the eligible counties in fiscal
year 2006.
``(d) Distribution of Payments in California.--The
following payments shall be distributed among the eligible
counties in the State of California in the same proportion
that payments under section 102(a)(2) (as in effect on
September 29, 2006) were distributed to the eligible counties
for fiscal year 2006:
``(1) Payments to the State of California under subsection
(b).
``(2) The shares of the eligible counties of the State
payment for California under section 102 for fiscal year
2011.
``(e) Treatment of Payments.--For purposes of this Act, any
payment made under subsection (b) shall be considered to be a
payment made under section 102(a).
``TITLE II--SPECIAL PROJECTS ON FEDERAL LAND
``SEC. 201. DEFINITIONS.
``In this title:
``(1) Participating county.--The term `participating
county' means an eligible county that elects under section
102(d) to expend a portion of the Federal funds received
under section 102 in accordance with this title.
``(2) Project funds.--The term `project funds' means all
funds an eligible county elects under section 102(d) to
reserve for expenditure in accordance with this title.
``(3) Resource advisory committee.--The term `resource
advisory committee' means--
``(A) an advisory committee established by the Secretary
concerned under section 205; or
``(B) an advisory committee determined by the Secretary
concerned to meet the requirements of section 205.
``(4) Resource management plan.--The term `resource
management plan' means--
``(A) a land use plan prepared by the Bureau of Land
Management for units of the Federal land described in section
3(7)(B) pursuant to section 202 of the Federal Land Policy
and Management Act of 1976 (43 U.S.C. 1712); or
``(B) a land and resource management plan prepared by the
Forest Service for units of the National Forest System
pursuant to section 6 of the Forest and Rangeland Renewable
Resources Planning Act of 1974 (16 U.S.C. 1604).
``SEC. 202. GENERAL LIMITATION ON USE OF PROJECT FUNDS.
``(a) Limitation.--Project funds shall be expended solely
on projects that meet the requirements of this title.
``(b) Authorized Uses.--Project funds may be used by the
Secretary concerned for the purpose of entering into and
implementing cooperative agreements with willing Federal
agencies, State and local governments, private and nonprofit
entities, and landowners for protection, restoration, and
enhancement of fish and wildlife habitat, and other resource
objectives consistent with the purposes of this Act on
Federal land and on non-Federal land where projects would
benefit the resources on Federal land.
``SEC. 203. SUBMISSION OF PROJECT PROPOSALS.
``(a) Submission of Project Proposals to Secretary
Concerned.--
``(1) Projects funded using project funds.--Not later than
September 30 for fiscal year 2008 (or as soon thereafter as
the Secretary concerned determines is practicable), and each
September 30 thereafter for each succeeding fiscal year
through fiscal year 2011, each resource advisory committee
shall submit to the Secretary concerned a description of any
projects that the resource advisory committee proposes the
Secretary undertake using any project funds reserved by
eligible counties in the area in which the resource advisory
committee has geographic jurisdiction.
``(2) Projects funded using other funds.--A resource
advisory committee may submit to the Secretary concerned a
description of any projects that the committee proposes the
Secretary undertake using funds from State or local
governments, or from the private sector, other than project
funds and funds appropriated and otherwise available to do
similar work.
``(3) Joint projects.--Participating counties or other
persons may propose to pool project funds or other funds,
described in paragraph (2), and jointly propose a project or
group of projects to a resource advisory committee
established under section 205.
``(b) Required Description of Projects.--In submitting
proposed projects to the Secretary concerned under subsection
(a), a resource advisory committee shall include in the
description of each proposed project the following
information:
``(1) The purpose of the project and a description of how
the project will meet the purposes of this title.
``(2) The anticipated duration of the project.
``(3) The anticipated cost of the project.
``(4) The proposed source of funding for the project,
whether project funds or other funds.
``(5)(A) Expected outcomes, including how the project will
meet or exceed desired ecological conditions, maintenance
objectives, or stewardship objectives.
``(B) An estimate of the amount of any timber, forage, and
other commodities and other economic activity, including jobs
generated, if any, anticipated as part of the project.
``(6) A detailed monitoring plan, including funding needs
and sources, that--
``(A) tracks and identifies the positive or negative
impacts of the project, implementation, and provides for
validation monitoring; and
``(B) includes an assessment of the following:
``(i) Whether or not the project met or exceeded desired
ecological conditions; created local employment or training
opportunities, including summer youth jobs programs such as
the Youth Conservation Corps where appropriate.
``(ii) Whether the project improved the use of, or added
value to, any products removed from land consistent with the
purposes of this title.
``(7) An assessment that the project is to be in the public
interest.
``(c) Authorized Projects.--Projects proposed under
subsection (a) shall be consistent with section 2.
``SEC. 204. EVALUATION AND APPROVAL OF PROJECTS BY SECRETARY
CONCERNED.
``(a) Conditions for Approval of Proposed Project.--The
Secretary concerned may make a decision to approve a project
submitted by a resource advisory committee under section 203
only if the proposed project satisfies each of the following
conditions:
``(1) The project complies with all applicable Federal laws
(including regulations).
``(2) The project is consistent with the applicable
resource management plan and with any watershed or subsequent
plan developed pursuant to the resource management plan and
approved by the Secretary concerned.
``(3) The project has been approved by the resource
advisory committee in accordance with section 205, including
the procedures issued under subsection (e) of that section.
``(4) A project description has been submitted by the
resource advisory committee to the Secretary concerned in
accordance with section 203.
``(5) The project will improve the maintenance of existing
infrastructure, implement stewardship objectives that enhance
forest ecosystems, and restore and improve land health and
water quality.
``(b) Environmental Reviews.--
``(1) Request for payment by county.--The Secretary
concerned may request the resource advisory committee
submitting a proposed project to agree to the use of project
funds to pay for any environmental review, consultation, or
compliance with applicable environmental laws required in
connection with the project.
``(2) Conduct of environmental review.--If a payment is
requested under paragraph (1) and the resource advisory
committee agrees to the expenditure of funds for this
purpose, the Secretary concerned shall conduct environmental
review, consultation, or other compliance responsibilities in
accordance with Federal laws (including regulations).
``(3) Effect of refusal to pay.--
``(A) In general.--If a resource advisory committee does
not agree to the expenditure of funds under paragraph (1),
the project shall be deemed withdrawn from further
consideration by the Secretary concerned pursuant to this
title.
``(B) Effect of withdrawal.--A withdrawal under
subparagraph (A) shall be deemed to be a rejection of the
project for purposes of section 207(c).
``(c) Decisions of Secretary Concerned.--
``(1) Rejection of projects.--
``(A) In general.--A decision by the Secretary concerned to
reject a proposed project shall be at the sole discretion of
the Secretary concerned.
``(B) No administrative appeal or judicial review.--
Notwithstanding any other provision of law, a decision by the
Secretary concerned to reject a proposed project shall not be
subject to administrative appeal or judicial review.
``(C) Notice of rejection.--Not later than 30 days after
the date on which the Secretary concerned makes the rejection
decision, the Secretary concerned shall notify in writing the
resource advisory committee that submitted the proposed
project of the rejection and the reasons for rejection.
``(2) Notice of project approval.--The Secretary concerned
shall publish in the Federal Register notice of each project
approved under subsection (a) if the notice
[[Page 23703]]
would be required had the project originated with the
Secretary.
``(d) Source and Conduct of Project.--Once the Secretary
concerned accepts a project for review under section 203, the
acceptance shall be deemed a Federal action for all purposes.
``(e) Implementation of Approved Projects.--
``(1) Cooperation.--Notwithstanding chapter 63 of title 31,
United States Code, using project funds the Secretary
concerned may enter into contracts, grants, and cooperative
agreements with States and local governments, private and
nonprofit entities, and landowners and other persons to
assist the Secretary in carrying out an approved project.
``(2) Best value contracting.--
``(A) In general.--For any project involving a contract
authorized by paragraph (1) the Secretary concerned may elect
a source for performance of the contract on a best value
basis.
``(B) Factors.--The Secretary concerned shall determine
best value based on such factors as--
``(i) the technical demands and complexity of the work to
be done;
``(ii)(I) the ecological objectives of the project; and
``(II) the sensitivity of the resources being treated;
``(iii) the past experience by the contractor with the type
of work being done, using the type of equipment proposed for
the project, and meeting or exceeding desired ecological
conditions; and
``(iv) the commitment of the contractor to hiring highly
qualified workers and local residents.
``(3) Merchantable timber contracting pilot program.--
``(A) Establishment.--The Secretary concerned shall
establish a pilot program to implement a certain percentage
of approved projects involving the sale of merchantable
timber using separate contracts for--
``(i) the harvesting or collection of merchantable timber;
and
``(ii) the sale of the timber.
``(B) Annual percentages.--Under the pilot program, the
Secretary concerned shall ensure that, on a nationwide basis,
not less than the following percentage of all approved
projects involving the sale of merchantable timber are
implemented using separate contracts:
``(i) For fiscal year 2008, 35 percent.
``(ii) For fiscal year 2009, 45 percent.
``(iii) For each of fiscal years 2010 and 2011, 50 percent.
``(C) Inclusion in pilot program.--The decision whether to
use separate contracts to implement a project involving the
sale of merchantable timber shall be made by the Secretary
concerned after the approval of the project under this title.
``(D) Assistance.--
``(i) In general.--The Secretary concerned may use funds
from any appropriated account available to the Secretary for
the Federal land to assist in the administration of projects
conducted under the pilot program.
``(ii) Maximum amount of assistance.--The total amount
obligated under this subparagraph may not exceed $1,000,000
for any fiscal year during which the pilot program is in
effect.
``(E) Review and report.--
``(i) Initial report.--Not later than September 30, 2010,
the Comptroller General shall submit to the Committees on
Agriculture, Nutrition, and Forestry and Energy and Natural
Resources of the Senate and the Committees on Agriculture and
Natural Resources of the House of Representatives a report
assessing the pilot program.
``(ii) Annual report.--The Secretary concerned shall submit
to the Committees on Agriculture, Nutrition, and Forestry and
Energy and Natural Resources of the Senate and the Committees
on Agriculture and Natural Resources of the House of
Representatives an annual report describing the results of
the pilot program.
``(f) Requirements for Project Funds.--The Secretary shall
ensure that at least 50 percent of all project funds be used
for projects that are primarily dedicated--
``(1) to road maintenance, decommissioning, or
obliteration; or
``(2) to restoration of streams and watersheds.
``SEC. 205. RESOURCE ADVISORY COMMITTEES.
``(a) Establishment and Purpose of Resource Advisory
Committees.--
``(1) Establishment.--The Secretary concerned shall
establish and maintain resource advisory committees to
perform the duties in subsection (b), except as provided in
paragraph (4).
``(2) Purpose.--The purpose of a resource advisory
committee shall be--
``(A) to improve collaborative relationships; and
``(B) to provide advice and recommendations to the land
management agencies consistent with the purposes of this
title.
``(3) Access to resource advisory committees.--To ensure
that each unit of Federal land has access to a resource
advisory committee, and that there is sufficient interest in
participation on a committee to ensure that membership can be
balanced in terms of the points of view represented and the
functions to be performed, the Secretary concerned may,
establish resource advisory committees for part of, or 1 or
more, units of Federal land.
``(4) Existing advisory committees.--
``(A) In general.--An advisory committee that meets the
requirements of this section, a resource advisory committee
established before September 29, 2006, or an advisory
committee determined by the Secretary concerned before
September 29, 2006, to meet the requirements of this section
may be deemed by the Secretary concerned to be a resource
advisory committee for the purposes of this title.
``(B) Charter.--A charter for a committee described in
subparagraph (A) that was filed on or before September 29,
2006, shall be considered to be filed for purposes of this
Act.
``(C) Bureau of land management advisory committees.--The
Secretary of the Interior may deem a resource advisory
committee meeting the requirements of subpart 1784 of part
1780 of title 43, Code of Federal Regulations, as a resource
advisory committee for the purposes of this title.
``(b) Duties.--A resource advisory committee shall--
``(1) review projects proposed under this title by
participating counties and other persons;
``(2) propose projects and funding to the Secretary
concerned under section 203;
``(3) provide early and continuous coordination with
appropriate land management agency officials in recommending
projects consistent with purposes of this Act under this
title;
``(4) provide frequent opportunities for citizens,
organizations, tribes, land management agencies, and other
interested parties to participate openly and meaningfully,
beginning at the early stages of the project development
process under this title;
``(5)(A) monitor projects that have been approved under
section 204; and
``(B) advise the designated Federal official on the
progress of the monitoring efforts under subparagraph (A);
and
``(6) make recommendations to the Secretary concerned for
any appropriate changes or adjustments to the projects being
monitored by the resource advisory committee.
``(c) Appointment by the Secretary.--
``(1) Appointment and term.--
``(A) In general.--The Secretary concerned, shall appoint
the members of resource advisory committees for a term of 4
years beginning on the date of appointment.
``(B) Reappointment.--The Secretary concerned may reappoint
members to subsequent 4-year terms.
``(2) Basic requirements.--The Secretary concerned shall
ensure that each resource advisory committee established
meets the requirements of subsection (d).
``(3) Initial appointment.--Not later than 180 days after
the date of the enactment of this Act, the Secretary
concerned shall make initial appointments to the resource
advisory committees.
``(4) Vacancies.--The Secretary concerned shall make
appointments to fill vacancies on any resource advisory
committee as soon as practicable after the vacancy has
occurred.
``(5) Compensation.--Members of the resource advisory
committees shall not receive any compensation.
``(d) Composition of Advisory Committee.--
``(1) Number.--Each resource advisory committee shall be
comprised of 15 members.
``(2) Community interests represented.--Committee members
shall be representative of the interests of the following 3
categories:
``(A) 5 persons that--
``(i) represent organized labor or non-timber forest
product harvester groups;
``(ii) represent developed outdoor recreation, off highway
vehicle users, or commercial recreation activities;
``(iii) represent--
``(I) energy and mineral development interests; or
``(II) commercial or recreational fishing interests;
``(iv) represent the commercial timber industry; or
``(v) hold Federal grazing or other land use permits, or
represent nonindustrial private forest land owners, within
the area for which the committee is organized.
``(B) 5 persons that represent--
``(i) nationally recognized environmental organizations;
``(ii) regionally or locally recognized environmental
organizations;
``(iii) dispersed recreational activities;
``(iv) archaeological and historical interests; or
``(v) nationally or regionally recognized wild horse and
burro interest groups, wildlife or hunting organizations, or
watershed associations.
``(C) 5 persons that--
``(i) hold State elected office (or a designee);
``(ii) hold county or local elected office;
``(iii) represent American Indian tribes within or adjacent
to the area for which the committee is organized;
``(iv) are school officials or teachers; or
``(v) represent the affected public at large.
[[Page 23704]]
``(3) Balanced representation.--In appointing committee
members from the 3 categories in paragraph (2), the Secretary
concerned shall provide for balanced and broad representation
from within each category.
``(4) Geographic distribution.--The members of a resource
advisory committee shall reside within the State in which the
committee has jurisdiction and, to extent practicable, the
Secretary concerned shall ensure local representation in each
category in paragraph (2).
``(5) Chairperson.--A majority on each resource advisory
committee shall select the chairperson of the committee.
``(e) Approval Procedures.--
``(1) In general.--Subject to paragraph (3), each resource
advisory committee shall establish procedures for proposing
projects to the Secretary concerned under this title.
``(2) Quorum.--A quorum must be present to constitute an
official meeting of the committee.
``(3) Approval by majority of members.--A project may be
proposed by a resource advisory committee to the Secretary
concerned under section 203(a), if the project has been
approved by a majority of members of the committee from each
of the 3 categories in subsection (d)(2).
``(f) Other Committee Authorities and Requirements.--
``(1) Staff assistance.--A resource advisory committee may
submit to the Secretary concerned a request for periodic
staff assistance from Federal employees under the
jurisdiction of the Secretary.
``(2) Meetings.--All meetings of a resource advisory
committee shall be announced at least 1 week in advance in a
local newspaper of record and shall be open to the public.
``(3) Records.--A resource advisory committee shall
maintain records of the meetings of the committee and make
the records available for public inspection.
``SEC. 206. USE OF PROJECT FUNDS.
``(a) Agreement Regarding Schedule and Cost of Project.--
``(1) Agreement between parties.--The Secretary concerned
may carry out a project submitted by a resource advisory
committee under section 203(a) using project funds or other
funds described in section 203(a)(2), if, as soon as
practicable after the issuance of a decision document for the
project and the exhaustion of all administrative appeals and
judicial review of the project decision, the Secretary
concerned and the resource advisory committee enter into an
agreement addressing, at a minimum, the following:
``(A) The schedule for completing the project.
``(B) The total cost of the project, including the level of
agency overhead to be assessed against the project.
``(C) For a multiyear project, the estimated cost of the
project for each of the fiscal years in which it will be
carried out.
``(D) The remedies for failure of the Secretary concerned
to comply with the terms of the agreement consistent with
current Federal law.
``(2) Limited use of federal funds.--The Secretary
concerned may decide, at the sole discretion of the Secretary
concerned, to cover the costs of a portion of an approved
project using Federal funds appropriated or otherwise
available to the Secretary for the same purposes as the
project.
``(b) Transfer of Project Funds.--
``(1) Initial transfer required.--As soon as practicable
after the agreement is reached under subsection (a) with
regard to a project to be funded in whole or in part using
project funds, or other funds described in section 203(a)(2),
the Secretary concerned shall transfer to the applicable unit
of National Forest System land or Bureau of Land Management
District an amount of project funds equal to--
``(A) in the case of a project to be completed in a single
fiscal year, the total amount specified in the agreement to
be paid using project funds, or other funds described in
section 203(a)(2); or
``(B) in the case of a multiyear project, the amount
specified in the agreement to be paid using project funds, or
other funds described in section 203(a)(2) for the first
fiscal year.
``(2) Condition on project commencement.--The unit of
National Forest System land or Bureau of Land Management
District concerned, shall not commence a project until the
project funds, or other funds described in section 203(a)(2)
required to be transferred under paragraph (1) for the
project, have been made available by the Secretary concerned.
``(3) Subsequent transfers for multiyear projects.--
``(A) In general.--For the second and subsequent fiscal
years of a multiyear project to be funded in whole or in part
using project funds, the unit of National Forest System land
or Bureau of Land Management District concerned shall use the
amount of project funds required to continue the project in
that fiscal year according to the agreement entered into
under subsection (a).
``(B) Suspension of work.--The Secretary concerned shall
suspend work on the project if the project funds required by
the agreement in the second and subsequent fiscal years are
not available.
``SEC. 207. AVAILABILITY OF PROJECT FUNDS.
``(a) Submission of Proposed Projects To Obligate Funds.--
By September 30, 2008 (or as soon thereafter as the Secretary
concerned determines is practicable), and each September 30
thereafter for each succeeding fiscal year through fiscal
year 2011, a resource advisory committee shall submit to the
Secretary concerned pursuant to section 203(a)(1) a
sufficient number of project proposals that, if approved,
would result in the obligation of at least the full amount of
the project funds reserved by the participating county in the
preceding fiscal year.
``(b) Use or Transfer of Unobligated Funds.--Subject to
section 208, if a resource advisory committee fails to comply
with subsection (a) for a fiscal year, any project funds
reserved by the participating county in the preceding fiscal
year and remaining unobligated shall be available for use as
part of the project submissions in the next fiscal year.
``(c) Effect of Rejection of Projects.--Subject to section
208, any project funds reserved by a participating county in
the preceding fiscal year that are unobligated at the end of
a fiscal year because the Secretary concerned has rejected
one or more proposed projects shall be available for use as
part of the project submissions in the next fiscal year.
``(d) Effect of Court Orders.--
``(1) In general.--If an approved project under this Act is
enjoined or prohibited by a Federal court, the Secretary
concerned shall return the unobligated project funds related
to the project to the participating county or counties that
reserved the funds.
``(2) Expenditure of funds.--The returned funds shall be
available for the county to expend in the same manner as the
funds reserved by the county under subparagraph (B) or (C)(i)
of section 102(d)(1).
``SEC. 208. TERMINATION OF AUTHORITY.
``(a) In General.--The authority to initiate projects under
this title shall terminate on September 30, 2011.
``(b) Deposits in Treasury.--Any project funds not
obligated by September 30, 2012, shall be deposited in the
Treasury of the United States.
``TITLE III--COUNTY FUNDS
``SEC. 301. DEFINITIONS.
``In this title:
``(1) County funds.--The term `county funds' means all
funds an eligible county elects under section 102(d) to
reserve for expenditure in accordance with this title.
``(2) Participating county.--The term `participating
county' means an eligible county that elects under section
102(d) to expend a portion of the Federal funds received
under section 102 in accordance with this title.
``SEC. 302. USE.
``(a) Authorized Uses.--A participating county, including
any applicable agencies of the participating county, shall
use county funds, in accordance with this title, only--
``(1) to carry out activities under the Firewise
Communities program to provide to homeowners in fire-
sensitive ecosystems education on, and assistance with
implementing, techniques in home siting, home construction,
and home landscaping that can increase the protection of
people and property from wildfires;
``(2) to reimburse the participating county for search and
rescue and other emergency services, including firefighting,
that are--
``(A) performed on Federal land after the date on which the
use was approved under subsection (b);
``(B) paid for by the participating county; and
``(3) to develop community wildfire protection plans in
coordination with the appropriate Secretary concerned.
``(b) Proposals.--A participating county shall use county
funds for a use described in subsection (a) only after a 45-
day public comment period, at the beginning of which the
participating county shall--
``(1) publish in any publications of local record a
proposal that describes the proposed use of the county funds;
and
``(2) submit the proposal to any resource advisory
committee established under section 205 for the participating
county.
``SEC. 303. CERTIFICATION.
``(a) In General.--Not later than February 1 of the year
after the year in which any county funds were expended by a
participating county, the appropriate official of the
participating county shall submit to the Secretary concerned
a certification that the county funds expended in the
applicable year have been used for the uses authorized under
section 302(a), including a description of the amounts
expended and the uses for which the amounts were expended.
``(b) Review.--The Secretary concerned shall review the
certifications submitted under subsection (a) as the
Secretary concerned determines to be appropriate.
``SEC. 304. TERMINATION OF AUTHORITY.
``(a) In General.--The authority to initiate projects under
this title terminates on September 30, 2011.
``(b) Availability.--Any county funds not obligated by
September 30, 2012, shall be returned to the Treasury of the
United States.
``TITLE IV--MISCELLANEOUS PROVISIONS
``SEC. 401. REGULATIONS.
``The Secretary of Agriculture and the Secretary of the
Interior shall issue regulations to carry out the purposes of
this Act.
[[Page 23705]]
``SEC. 402. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated such sums as are
necessary to carry out this Act for each of fiscal years 2008
through 2011.
``SEC. 403. TREATMENT OF FUNDS AND REVENUES.
``(a) Relation to Other Appropriations.--Funds made
available under section 402 and funds made available to a
Secretary concerned under section 206 shall be in addition to
any other annual appropriations for the Forest Service and
the Bureau of Land Management.
``(b) Deposit of Revenues and Other Funds.--All revenues
generated from projects pursuant to title II, including any
interest accrued from the revenues, shall be deposited in the
Treasury of the United States.''.
(b) Forest Receipt Payments to Eligible States and
Counties.--
(1) Act of may 23, 1908.--The sixth paragraph under the
heading ``FOREST SERVICE'' in the Act of May 23, 1908 (16
U.S.C. 500) is amended in the first sentence by striking
``twenty-five percentum'' and all that follows through
``shall be paid'' and inserting the following: ``an amount
equal to the annual average of 25 percent of all amounts
received for the applicable fiscal year and each of the
preceding 6 fiscal years from each national forest shall be
paid''.
(2) Weeks law.--Section 13 of the Act of March 1, 1911
(commonly known as the ``Weeks Law'') (16 U.S.C. 500) is
amended in the first sentence by striking ``twenty-five
percentum'' and all that follows through ``shall be paid''
and inserting the following: ``an amount equal to the annual
average of 25 percent of all amounts received for the
applicable fiscal year and each of the preceding 6 fiscal
years from each national forest shall be paid''.
(c) Payments in Lieu of Taxes.--
(1) In general.--Section 6906 of title 31, United States
Code, is amended to read as follows:
``Sec. 6906. Funding
``For each of fiscal years 2008 through 2012--
``(1) each county or other eligible unit of local
government shall be entitled to payment under this chapter;
and
``(2) sums shall be made available to the Secretary of the
Interior for obligation or expenditure in accordance with
this chapter.''.
(2) Conforming amendment.--The table of sections for
chapter 69 of title 31, United States Code, is amended by
striking the item relating to section 6906 and inserting the
following:
``6906. Funding.''.
(3) Budget scorekeeping.--
(A) In general.--Notwithstanding the Budget Scorekeeping
Guidelines and the accompanying list of programs and accounts
set forth in the joint explanatory statement of the committee
of conference accompanying Conference Report 105-217, the
section in this title regarding Payments in Lieu of Taxes
shall be treated in the baseline for purposes of section 257
of the Balanced Budget and Emergency Deficit Control Act of
1985 (as in effect prior to September 30, 2002), and by the
Chairmen of the House and Senate Budget Committees, as
appropriate, for purposes of budget enforcement in the House
and Senate, and under the Congressional Budget Act of 1974 as
if Payment in Lieu of Taxes (14-1114-0-1-806) were an account
designated as Appropriated Entitlements and Mandatories for
Fiscal Year 1997 in the joint explanatory statement of the
committee of conference accompanying Conference Report 105-
217.
(B) Effective date.--This paragraph shall remain in effect
for the fiscal years to which the entitlement in section 6906
of title 31, United States Code (as amended by paragraph
(1)), applies.
SEC. 602. TRANSFER TO ABANDONED MINE RECLAMATION FUND.
Subparagraph (C) of section 402(i)(1) of the Surface Mining
Control and Reclamation Act of 1977 (30 U.S.C. 1232(i)(1)) is
amended by striking ``and $9,000,000 on October 1, 2009'' and
inserting ``$9,000,000 on October 1, 2009, and $9,000,000 on
October 1, 2010''.
TITLE VII--DISASTER RELIEF
Subtitle A--Heartland and Hurricane Ike Disaster Relief
SEC. 701. SHORT TITLE.
This subtitle may be cited as the ``Heartland Disaster Tax
Relief Act of 2008''.
SEC. 702. TEMPORARY TAX RELIEF FOR AREAS DAMAGED BY 2008
MIDWESTERN SEVERE STORMS, TORNADOS, AND
FLOODING.
(a) In General.--Subject to the modifications described in
this section, the following provisions of or relating to the
Internal Revenue Code of 1986 shall apply to any Midwestern
disaster area in addition to the areas to which such
provisions otherwise apply:
(1) Go zone benefits.--
(A) Section 1400N (relating to tax benefits) other than
subsections (b), (d), (e), (i), (j), (m), and (o) thereof.
(B) Section 1400O (relating to education tax benefits).
(C) Section 1400P (relating to housing tax benefits).
(D) Section 1400Q (relating to special rules for use of
retirement funds).
(E) Section 1400R(a) (relating to employee retention credit
for employers).
(F) Section 1400S (relating to additional tax relief) other
than subsection (d) thereof.
(G) Section 1400T (relating to special rules for mortgage
revenue bonds).
(2) Other benefits included in katrina emergency tax relief
act of 2005.--Sections 302, 303, 304, 401, and 405 of the
Katrina Emergency Tax Relief Act of 2005.
(b) Midwestern Disaster Area.--
(1) In general.--For purposes of this section and for
applying the substitutions described in subsections (d) and
(e), the term ``Midwestern disaster area'' means an area--
(A) with respect to which a major disaster has been
declared by the President on or after May 20, 2008, and
before August 1, 2008, under section 401 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act by
reason of severe storms, tornados, or flooding occurring in
any of the States of Arkansas, Illinois, Indiana, Iowa,
Kansas, Michigan, Minnesota, Missouri, Nebraska, and
Wisconsin, and
(B) determined by the President to warrant individual or
individual and public assistance from the Federal Government
under such Act with respect to damages attributable to such
severe storms, tornados, or flooding.
(2) Certain benefits available to areas eligible only for
public assistance.--For purposes of applying this section to
benefits under the following provisions, paragraph (1) shall
be applied without regard to subparagraph (B):
(A) Sections 1400Q, 1400S(b), and 1400S(d) of the Internal
Revenue Code of 1986.
(B) Sections 302, 401, and 405 of the Katrina Emergency Tax
Relief Act of 2005.
(c) References.--
(1) Area.--Any reference in such provisions to the
Hurricane Katrina disaster area or the Gulf Opportunity Zone
shall be treated as a reference to any Midwestern disaster
area and any reference to the Hurricane Katrina disaster area
or the Gulf Opportunity Zone within a State shall be treated
as a reference to all Midwestern disaster areas within the
State.
(2) Items attributable to disaster.--Any reference in such
provisions to any loss, damage, or other item attributable to
Hurricane Katrina shall be treated as a reference to any
loss, damage, or other item attributable to the severe
storms, tornados, or flooding giving rise to any Presidential
declaration described in subsection (b)(1)(A).
(3) Applicable disaster date.--For purposes of applying the
substitutions described in subsections (d) and (e), the term
``applicable disaster date'' means, with respect to any
Midwestern disaster area, the date on which the severe
storms, tornados, or flooding giving rise to the Presidential
declaration described in subsection (b)(1)(A) occurred.
(d) Modifications to 1986 Code.--The following provisions
of the Internal Revenue Code of 1986 shall be applied with
the following modifications:
(1) Tax-exempt bond financing.--Section 1400N(a)--
(A) by substituting ``qualified Midwestern disaster area
bond'' for ``qualified Gulf Opportunity Zone Bond'' each
place it appears, except that in determining whether a bond
is a qualified Midwestern disaster area bond--
(i) paragraph (2)(A)(i) shall be applied by only treating
costs as qualified project costs if--
(I) in the case of a project involving a private business
use (as defined in section 141(b)(6)), either the person
using the property suffered a loss in a trade or business
attributable to the severe storms, tornados, or flooding
giving rise to any Presidential declaration described in
subsection (b)(1)(A) or is a person designated for purposes
of this section by the Governor of the State in which the
project is located as a person carrying on a trade or
business replacing a trade or business with respect to which
another person suffered such a loss, and
(II) in the case of a project relating to public utility
property, the project involves repair or reconstruction of
public utility property damaged by such severe storms,
tornados, or flooding, and
(ii) paragraph (2)(A)(ii) shall be applied by treating an
issue as a qualified mortgage issue only if 95 percent or
more of the net proceeds (as defined in section 150(a)(3)) of
the issue are to be used to provide financing for mortgagors
who suffered damages to their principal residences
attributable to such severe storms, tornados, or flooding,
(B) by substituting ``any State in which a Midwestern
disaster area is located'' for ``the State of Alabama,
Louisiana, or Mississippi'' in paragraph (2)(B),
(C) by substituting ``designated for purposes of this
section (on the basis of providing assistance to areas in the
order in which such assistance is most needed)'' for
``designated for purposes of this section'' in paragraph
(2)(C),
(D) by substituting ``January 1, 2013'' for ``January 1,
2011'' in paragraph (2)(D),
(E) in paragraph (3)(A)--
(i) by substituting ``$1,000'' for ``$2,500'', and
(ii) by substituting ``before the earliest applicable
disaster date for Midwestern disaster areas within the
State'' for ``before August 28, 2005'',
[[Page 23706]]
(F) by substituting ``qualified Midwestern disaster area
repair or construction'' for ``qualified GO Zone repair or
construction'' each place it appears,
(G) by substituting ``after the date of the enactment of
the Heartland Disaster Tax Relief Act of 2008 and before
January 1, 2013'' for ``after the date of the enactment of
this paragraph and before January 1, 2011'' in paragraph
(7)(C), and
(H) by disregarding paragraph (8) thereof.
(2) Low-income housing credit.--Section 1400N(c)--
(A) only with respect to calendar years 2008, 2009, and
2010,
(B) by substituting ``Disaster Recovery Assistance housing
amount'' for ``Gulf Opportunity housing amount'' each place
it appears,
(C) in paragraph (1)(B)--
(i) by substituting ``$8.00'' for ``$18.00'', and
(ii) by substituting ``before the earliest applicable
disaster date for Midwestern disaster areas within the
State'' for ``before August 28, 2005'' , and
(D) determined without regard to paragraphs (2), (3), (4),
(5), and (6) thereof.
(3) Expensing for certain demolition and clean-up costs.--
Section 1400N(f)--
(A) by substituting ``qualified Disaster Recovery
Assistance clean-up cost'' for ``qualified Gulf Opportunity
Zone clean-up cost'' each place it appears,
(B) by substituting ``beginning on the applicable disaster
date and ending on December 31, 2010'' for ``beginning on
August 28, 2005, and ending on December 31, 2007'' in
paragraph (2), and
(C) by treating costs as qualified Disaster Recovery
Assistance clean-up costs only if the removal of debris or
demolition of any structure was necessary due to damage
attributable to the severe storms, tornados, or flooding
giving rise to any Presidential declaration described in
subsection (b)(1)(A).
(4) Extension of expensing for environmental remediation
costs.--Section 1400N(g)--
(A) by substituting ``the applicable disaster date'' for
``August 28, 2005'' each place it appears,
(B) by substituting ``January 1, 2011'' for ``January 1,
2008'' in paragraph (1),
(C) by substituting ``December 31, 2010'' for ``December
31, 2007'' in paragraph (1), and
(D) by treating a site as a qualified contaminated site
only if the release (or threat of release) or disposal of a
hazardous substance at the site was attributable to the
severe storms, tornados, or flooding giving rise to any
Presidential declaration described in subsection (b)(1)(A).
(5) Increase in rehabilitation credit.--Section 1400N(h),
as amended by this Act--
(A) by substituting ``the applicable disaster date'' for
``August 28, 2005'',
(B) by substituting ``December 31, 2011'' for ``December
31, 2009'' in paragraph (1), and
(C) by only applying such subsection to qualified
rehabilitation expenditures with respect to any building or
structure which was damaged or destroyed as a result of the
severe storms, tornados, or flooding giving rise to any
Presidential declaration described in subsection (b)(1)(A).
(6) Treatment of net operating losses attributable to
disaster losses.--Section 1400N(k)--
(A) by substituting ``qualified Disaster Recovery
Assistance loss'' for ``qualified Gulf Opportunity Zone
loss'' each place it appears,
(B) by substituting ``after the day before the applicable
disaster date, and before January 1, 2011'' for ``after
August 27, 2005, and before January 1, 2008'' each place it
appears,
(C) by substituting ``the applicable disaster date'' for
``August 28, 2005'' in paragraph (2)(B)(ii)(I),
(D) by substituting ``qualified Disaster Recovery
Assistance property'' for ``qualified Gulf Opportunity Zone
property'' in paragraph (2)(B)(iv), and
(E) by substituting ``qualified Disaster Recovery
Assistance casualty loss'' for ``qualified Gulf Opportunity
Zone casualty loss'' each place it appears.
(7) Credit to holders of tax credit bonds.--Section
1400N(l)--
(A) by substituting ``Midwestern tax credit bond'' for
``Gulf tax credit bond'' each place it appears,
(B) by substituting ``any State in which a Midwestern
disaster area is located or any instrumentality of the
State'' for ``the State of Alabama, Louisiana, or
Mississippi'' in paragraph (4)(A)(i),
(C) by substituting ``after December 31, 2008 and before
January 1, 2010'' for ``after December 31, 2005, and before
January 1, 2007'',
(D) by substituting ``shall not exceed $100,000,000 for any
State with an aggregate population located in all Midwestern
disaster areas within the State of at least 2,000,000,
$50,000,000 for any State with an aggregate population
located in all Midwestern disaster areas within the State of
at least 1,000,000 but less than 2,000,000, and zero for any
other State. The population of a State within any area shall
be determined on the basis of the most recent census estimate
of resident population released by the Bureau of Census
before the earliest applicable disaster date for Midwestern
disaster areas within the State.'' for ``shall not exceed''
and all that follows in paragraph (4)(C), and
(E) by substituting ``the earliest applicable disaster date
for Midwestern disaster areas within the State'' for ``August
28, 2005'' in paragraph (5)(A).
(8) Education tax benefits.--Section 1400O, by substituting
``2008 or 2009'' for ``2005 or 2006''.
(9) Housing tax benefits.--Section 1400P, by substituting
``the applicable disaster date'' for ``August 28, 2005'' in
subsection (c)(1).
(10) Special rules for use of retirement funds.--Section
1400Q--
(A) by substituting ``qualified Disaster Recovery
Assistance distribution'' for ``qualified hurricane
distribution'' each place it appears,
(B) by substituting ``on or after the applicable disaster
date and before January 1, 2010'' for ``on or after August
25, 2005, and before January 1, 2007'' in subsection
(a)(4)(A)(i),
(C) by substituting ``the applicable disaster date'' for
``August 28, 2005'' in subsections (a)(4)(A)(i) and
(c)(3)(B),
(D) by disregarding clauses (ii) and (iii) of subsection
(a)(4)(A) thereof,
(E) by substituting ``qualified storm damage distribution''
for ``qualified Katrina distribution'' each place it appears,
(F) by substituting ``after the date which is 6 months
before the applicable disaster date and before the date which
is the day after the applicable disaster date'' for ``after
February 28, 2005, and before August 29, 2005'' in subsection
(b)(2)(B)(ii),
(G) by substituting ``the Midwestern disaster area, but not
so purchased or constructed on account of severe storms,
tornados, or flooding giving rise to the designation of the
area as a disaster area'' for ``the Hurricane Katrina
disaster area, but not so purchased or constructed on account
of Hurricane Katrina'' in subsection (b)(2)(B)(iii),
(H) by substituting ``beginning on the applicable disaster
date and ending on the date which is 5 months after the date
of the enactment of the Heartland Disaster Tax Relief Act of
2008'' for ``beginning on August 25, 2005, and ending on
February 28, 2006'' in subsection (b)(3)(A),
(I) by substituting ``qualified storm damage individual''
for ``qualified Hurricane Katrina individual'' each place it
appears,
(J) by substituting ``December 31, 2009'' for ``December
31, 2006'' in subsection (c)(2)(A),
(K) by disregarding subparagraphs (C) and (D) of subsection
(c)(3) thereof,
(L) by substituting ``beginning on the date of the
enactment of the Heartland Disaster Tax Relief Act of 2008
and ending on December 31, 2009'' for ``beginning on
September 24, 2005, and ending on December 31, 2006'' in
subsection (c)(4)(A)(i),
(M) by substituting ``the applicable disaster date'' for
``August 25, 2005'' in subsection (c)(4)(A)(ii), and
(N) by substituting ``January 1, 2010'' for ``January 1,
2007'' in subsection (d)(2)(A)(ii).
(11) Employee retention credit for employers affected by
severe storms, tornados, and flooding.--Section 1400R(a)--
(A) by substituting ``the applicable disaster date'' for
``August 28, 2005'' each place it appears,
(B) by substituting ``January 1, 2009'' for ``January 1,
2006'' both places it appears, and
(C) only with respect to eligible employers who employed an
average of not more than 200 employees on business days
during the taxable year before the applicable disaster date.
(12) Temporary suspension of limitations on charitable
contributions.--Section 1400S(a), by substituting the
following paragraph for paragraph (4) thereof:
``(4) Qualified contributions.--
``(A) In general.--For purposes of this subsection, the
term `qualified contribution' means any charitable
contribution (as defined in section 170(c)) if--
``(i) such contribution--
``(I) is paid during the period beginning on the earliest
applicable disaster date for all States and ending on
December 31, 2008, in cash to an organization described in
section 170(b)(1)(A), and
``(II) is made for relief efforts in 1 or more Midwestern
disaster areas,
``(ii) the taxpayer obtains from such organization
contemporaneous written acknowledgment (within the meaning of
section 170(f)(8)) that such contribution was used (or is to
be used) for relief efforts in 1 or more Midwestern disaster
areas, and
``(iii) the taxpayer has elected the application of this
subsection with respect to such contribution.
``(B) Exception.--Such term shall not include a
contribution by a donor if the contribution is--
``(i) to an organization described in section 509(a)(3), or
``(ii) for establishment of a new, or maintenance of an
existing, donor advised fund (as defined in section
4966(d)(2)).
``(C) Application of election to partnerships and s
corporations.--In the case of a partnership or S corporation,
the election under subparagraph (A)(iii) shall be made
separately by each partner or shareholder.''.
(13) Suspension of certain limitations on personal casualty
losses.--Section 1400S(b)(1), by substituting ``the
applicable disaster date'' for ``August 25, 2005''.
[[Page 23707]]
(14) Special rule for determining earned income.--Section
1400S(d)--
(A) by treating an individual as a qualified individual if
such individual's principal place of abode on the applicable
disaster date was located in a Midwestern disaster area,
(B) by treating the applicable disaster date with respect
to any such individual as the applicable date for purposes of
such subsection, and
(C) by treating an area as described in paragraph
(2)(B)(ii) thereof if the area is a Midwestern disaster area
only by reason of subsection (b)(2) of this section (relating
to areas eligible only for public assistance).
(15) Adjustments regarding taxpayer and dependency
status.--Section 1400S(e), by substituting ``2008 or 2009''
for ``2005 or 2006''.
(e) Modifications to Katrina Emergency Tax Relief Act of
2005.--The following provisions of the Katrina Emergency Tax
Relief Act of 2005 shall be applied with the following
modifications:
(1) Additional exemption for housing displaced
individual.--Section 302--
(A) by substituting ``2008 or 2009'' for ``2005 or 2006''
in subsection (a) thereof,
(B) by substituting ``Midwestern displaced individual'' for
``Hurricane Katrina displaced individual'' each place it
appears, and
(C) by treating an area as a core disaster area for
purposes of applying subsection (c) thereof if the area is a
Midwestern disaster area without regard to subsection (b)(2)
of this section (relating to areas eligible only for public
assistance).
(2) Increase in standard mileage rate.--Section 303, by
substituting ``beginning on the applicable disaster date and
ending on December 31, 2008'' for ``beginning on August 25,
2005, and ending on December 31, 2006''.
(3) Mileage reimbursements for charitable volunteers.--
Section 304--
(A) by substituting ``beginning on the applicable disaster
date and ending on December 31, 2008'' for ``beginning on
August 25, 2005, and ending on December 31, 2006'' in
subsection (a), and
(B) by substituting ``the applicable disaster date'' for
``August 25, 2005'' in subsection (a).
(4) Exclusion of certain cancellation of indebtedness
income.--Section 401--
(A) by treating an individual whose principal place of
abode on the applicable disaster date was in a Midwestern
disaster area (determined without regard to subsection (b)(2)
of this section) as an individual described in subsection
(b)(1) thereof, and by treating an individual whose principal
place of abode on the applicable disaster date was in a
Midwestern disaster area solely by reason of subsection
(b)(2) of this section as an individual described in
subsection (b)(2) thereof,
(B) by substituting ``the applicable disaster date'' for
``August 28, 2005'' both places it appears, and
(C) by substituting ``January 1, 2010'' for ``January 1,
2007'' in subsection (e).
(5) Extension of replacement period for nonrecognition of
gain.--Section 405, by substituting ``on or after the
applicable disaster date'' for ``on or after August 25,
2005''.
SEC. 703. REPORTING REQUIREMENTS RELATING TO DISASTER RELIEF
CONTRIBUTIONS.
(a) In General.--Section 6033(b) (relating to returns of
certain organizations described in section 501(c)(3)) is
amended by striking ``and'' at the end of paragraph (13), by
redesignating paragraph (14) as paragraph (15), and by adding
after paragraph (13) the following new paragraph:
``(14) such information as the Secretary may require with
respect to disaster relief activities, including the amount
and use of qualified contributions to which section 1400S(a)
applies, and''.
(b) Effective Date.--The amendments made by this section
shall apply to returns the due date for which (determined
without regard to any extension) occurs after December 31,
2008.
SEC. 704. TEMPORARY TAX-EXEMPT BOND FINANCING AND LOW-INCOME
HOUSING TAX RELIEF FOR AREAS DAMAGED BY
HURRICANE IKE.
(a) Tax-Exempt Bond Financing.--Section 1400N(a) of the
Internal Revenue Code of 1986 shall apply to any Hurricane
Ike disaster area in addition to any other area referenced in
such section, but with the following modifications:
(1) By substituting ``qualified Hurricane Ike disaster area
bond'' for ``qualified Gulf Opportunity Zone Bond'' each
place it appears, except that in determining whether a bond
is a qualified Hurricane Ike disaster area bond--
(A) paragraph (2)(A)(i) shall be applied by only treating
costs as qualified project costs if--
(i) in the case of a project involving a private business
use (as defined in section 141(b)(6)), either the person
using the property suffered a loss in a trade or business
attributable to Hurricane Ike or is a person designated for
purposes of this section by the Governor of the State in
which the project is located as a person carrying on a trade
or business replacing a trade or business with respect to
which another person suffered such a loss, and
(ii) in the case of a project relating to public utility
property, the project involves repair or reconstruction of
public utility property damaged by Hurricane Ike, and
(B) paragraph (2)(A)(ii) shall be applied by treating an
issue as a qualified mortgage issue only if 95 percent or
more of the net proceeds (as defined in section 150(a)(3)) of
the issue are to be used to provide financing for mortgagors
who suffered damages to their principal residences
attributable to Hurricane Ike.
(2) By substituting ``any State in which any Hurricane Ike
disaster area is located'' for ``the State of Alabama,
Louisiana, or Mississippi'' in paragraph (2)(B).
(3) By substituting ``designated for purposes of this
section (on the basis of providing assistance to areas in the
order in which such assistance is most needed)'' for
``designated for purposes of this section'' in paragraph
(2)(C).
(4) By substituting ``January 1, 2013'' for ``January 1,
2011'' in paragraph (2)(D).
(5) By substituting the following for subparagraph (A) of
paragraph (3):
``(A) Aggregate amount designated.--The maximum aggregate
face amount of bonds which may be designated under this
subsection with respect to any State shall not exceed the
product of $2,000 multiplied by the portion of the State
population which is in--
``(i) in the case of Texas, the counties of Brazoria,
Chambers, Galveston, Jefferson, and Orange, and
``(ii) in the case of Louisiana, the parishes of Calcasieu
and Cameron,
(as determined on the basis of the most recent census
estimate of resident population released by the Bureau of
Census before September 13, 2008).''.
(6) By substituting ``qualified Hurricane Ike disaster area
repair or construction'' for ``qualified GO Zone repair or
construction'' each place it appears.
(7) By substituting ``after the date of the enactment of
the Heartland Disaster Tax Relief Act of 2008 and before
January 1, 2013'' for ``after the date of the enactment of
this paragraph and before January 1, 2011'' in paragraph
(7)(C).
(8) By disregarding paragraph (8) thereof.
(9) By substituting ``any Hurricane Ike disaster area'' for
``the Gulf Opportunity Zone'' each place it appears.
(b) Low-Income Housing Credit.--Section 1400N(c) of the
Internal Revenue Code of 1986 shall apply to any Hurricane
Ike disaster area in addition to any other area referenced in
such section, but with the following modifications:
(1) Only with respect to calendar years 2008, 2009, and
2010.
(2) By substituting ``any Hurricane Ike disaster area'' for
``the Gulf Opportunity Zone'' each place it appears.
(3) By substituting ``Hurricane Ike Recovery Assistance
housing amount'' for ``Gulf Opportunity housing amount'' each
place it appears.
(4) By substituting the following for subparagraph (B) of
paragraph (1):
``(B) Hurricane ike housing amount.--For purposes of
subparagraph (A), the term `Hurricane Ike housing amount'
means, for any calendar year, the amount equal to the product
of $16.00 multiplied by the portion of the State population
which is in--
``(i) in the case of Texas, the counties of Brazoria,
Chambers, Galveston, Jefferson, and Orange, and
``(ii) in the case of Louisiana, the parishes of Calcasieu
and Cameron,
(as determined on the basis of the most recent census
estimate of resident population released by the Bureau of
Census before September 13, 2008).''.
(5) Determined without regard to paragraphs (2), (3), (4),
(5), and (6) thereof.
(c) Hurricane Ike Disaster Area.--For purposes of this
section and for applying the substitutions described in
subsections (a) and (b), the term ``Hurricane Ike disaster
area'' means an area in the State of Texas or Louisiana--
(1) with respect to which a major disaster has been
declared by the President on September 13, 2008, under
section 401 of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act by reason of Hurricane Ike, and
(2) determined by the President to warrant individual or
individual and public assistance from the Federal Government
under such Act with respect to damages attributable to
Hurricane Ike.
Subtitle B--National Disaster Relief
SEC. 706. LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED
DISASTERS.
(a) Waiver of Adjusted Gross Income Limitation.--
(1) In general.--Subsection (h) of section 165 is amended
by redesignating paragraphs (3) and (4) as paragraphs (4) and
(5), respectively, and by inserting after paragraph (2) the
following new paragraph:
``(3) Special rule for losses in federally declared
disasters.--
``(A) In general.--If an individual has a net disaster loss
for any taxable year, the amount determined under paragraph
(2)(A)(ii) shall be the sum of--
``(i) such net disaster loss, and
``(ii) so much of the excess referred to in the matter
preceding clause (i) of paragraph (2)(A) (reduced by the
amount in clause (i) of this subparagraph) as exceeds 10
percent of the adjusted gross income of the individual.
[[Page 23708]]
``(B) Net disaster loss.--For purposes of subparagraph (A),
the term `net disaster loss' means the excess of--
``(i) the personal casualty losses--
``(I) attributable to a federally declared disaster
occurring before January 1, 2010, and
``(II) occurring in a disaster area, over
``(ii) personal casualty gains.
``(C) Federally declared disaster.--For purposes of this
paragraph--
``(i) Federally declared disaster.--The term `federally
declared disaster' means any disaster subsequently determined
by the President of the United States to warrant assistance
by the Federal Government under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act.
``(ii) Disaster area.--The term `disaster area' means the
area so determined to warrant such assistance.''.
(2) Conforming amendments.--
(A) Section 165(h)(4)(B) (as so redesignated) is amended by
striking ``paragraph (2)'' and inserting ``paragraphs (2) and
(3)''.
(B) Section 165(i)(1) is amended by striking ``loss'' and
all that follows through ``Act'' and inserting ``loss
occurring in a disaster area (as defined by clause (ii) of
subsection (h)(3)(C)) and attributable to a federally
declared disaster (as defined by clause (i) of such
subsection)''.
(C) Section 165(i)(4) is amended by striking
``Presidentially declared disaster (as defined by section
1033(h)(3))'' and inserting ``federally declared disaster (as
defined by subsection (h)(3)(C)(i)''.
(D)(i) So much of subsection (h) of section 1033 as
precedes subparagraph (A) of paragraph (1) thereof is amended
to read as follows:
``(h) Special Rules for Property Damaged by Federally
Declared Disasters.--
``(1) Principal residences.--If the taxpayer's principal
residence or any of its contents is located in a disaster
area and is compulsorily or involuntarily converted as a
result of a federally declared disaster--''.
(ii) Paragraph (2) of section 1033(h) is amended by
striking ``investment'' and all that follows through
``disaster'' and inserting ``investment located in a disaster
area and compulsorily or involuntarily converted as a result
of a federally declared disaster''.
(iii) Paragraph (3) of section 1033(h) is amended to read
as follows:
``(3) Federally declared disaster; disaster area.--The
terms ``federally declared disaster'' and ``disaster area''
shall have the respective meaning given such terms by section
165(h)(3)(C).''.
(iv) Section 139(c)(2) is amended to read as follows:
``(2) federally declared disaster (as defined by section
165(h)(3)(C)(i)),''.
(v) Subclause (II) of section 172(b)(1)(F)(ii) is amended
by striking ``Presidentially declared disasters (as defined
in section 1033(h)(3))'' and inserting ``federally declared
disasters (as defined by subsection (h)(3)(C)(i))''.
(vi) Subclause (III) of section 172(b)(1)(F)(ii) is amended
by striking ``Presidentially declared disasters'' and
inserting ``federally declared disasters''.
(vii) Subsection (a) of section 7508A is amended by
striking ``Presidentially declared disaster (as defined in
section 1033(h)(3))'' and inserting ``federally declared
disaster (as defined by section 165(h)(3)(C)(i))''.
(b) Increase in Standard Deduction by Disaster Casualty
Loss.--
(1) In general.--Paragraph (1) of section 63(c), as amended
by the Housing Assistance Tax Act of 2008, is amended by
striking ``and'' at the end of subparagraph (B), by striking
the period at the end of subparagraph (C) and inserting ``,
and'', and by adding at the end the following new
subparagraph:
``(D) the disaster loss deduction.''.
(2) Disaster loss deduction.--Subsection (c) of section 63,
as amended by the Housing Assistance Tax Act of 2008, is
amended by adding at the end the following new paragraph:
``(8) Disaster loss deduction.--For the purposes of
paragraph (1), the term `disaster loss deduction' means the
net disaster loss (as defined in section 165(h)(3)(B)).''.
(3) Allowance in computing alternative minimum taxable
income.--Subparagraph (E) of section 56(b)(1) is amended by
adding at the end the following new sentence: ``The preceding
sentence shall not apply to so much of the standard deduction
as is determined under section 63(c)(1)(D).''.
(c) Increase in Limitation on Individual Loss Per
Casualty.--Paragraph (1) of section 165(h) is amended by
striking ``$100'' and inserting ``$500 ($100 for taxable
years beginning after December 31, 2009)''.
(d) Effective Dates.--
(1) In general.--Except as provided by paragraph (2), the
amendments made by this section shall apply to disasters
declared in taxable years beginning after December 31, 2007.
(2) Increase in limitation on individual loss per
casualty.--The amendment made by subsection (c) shall apply
to taxable years beginning after December 31, 2008.
SEC. 707. EXPENSING OF QUALIFIED DISASTER EXPENSES.
(a) In General.--Part VI of subchapter B of chapter 1 is
amended by inserting after section 198 the following new
section:
``SEC. 198A. EXPENSING OF QUALIFIED DISASTER EXPENSES.
``(a) In General.--A taxpayer may elect to treat any
qualified disaster expenses which are paid or incurred by the
taxpayer as an expense which is not chargeable to capital
account. Any expense which is so treated shall be allowed as
a deduction for the taxable year in which it is paid or
incurred.
``(b) Qualified Disaster Expense.--For purposes of this
section, the term `qualified disaster expense' means any
expenditure--
``(1) which is paid or incurred in connection with a trade
or business or with business-related property,
``(2) which is--
``(A) for the abatement or control of hazardous substances
that were released on account of a federally declared
disaster occurring before January 1, 2010,
``(B) for the removal of debris from, or the demolition of
structures on, real property which is business-related
property damaged or destroyed as a result of a federally
declared disaster occurring before such date, or
``(C) for the repair of business-related property damaged
as a result of a federally declared disaster occurring before
such date, and
``(3) which is otherwise chargeable to capital account.
``(c) Other Definitions.--For purposes of this section--
``(1) Business-related property.--The term `business-
related property' means property--
``(A) held by the taxpayer for use in a trade or business
or for the production of income, or
``(B) described in section 1221(a)(1) in the hands of the
taxpayer.
``(2) Federally declared disaster.--The term `federally
declared disaster' has the meaning given such term by section
165(h)(3)(C)(i).
``(d) Deduction Recaptured as Ordinary Income on Sale,
etc.--Solely for purposes of section 1245, in the case of
property to which a qualified disaster expense would have
been capitalized but for this section--
``(1) the deduction allowed by this section for such
expense shall be treated as a deduction for depreciation, and
``(2) such property (if not otherwise section 1245
property) shall be treated as section 1245 property solely
for purposes of applying section 1245 to such deduction.
``(e) Coordination With Other Provisions.--Sections 198,
280B, and 468 shall not apply to amounts which are treated as
expenses under this section.
``(f) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
the purposes of this section.''.
(b) Clerical Amendment.--The table of sections for part VI
of subchapter B of chapter 1 is amended by inserting after
the item relating to section 198 the following new item:
``Sec. 198A. Expensing of Qualified Disaster Expenses.''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred after December 31,
2007 in connection with disaster declared after such date.
SEC. 708. NET OPERATING LOSSES ATTRIBUTABLE TO FEDERALLY
DECLARED DISASTERS.
(a) In General.--Paragraph (1) of section 172(b) is amended
by adding at the end the following new subparagraph:
``(J) Certain losses attributable federally declared
disasters.--In the case of a taxpayer who has a qualified
disaster loss (as defined in subsection (j)), such loss shall
be a net operating loss carryback to each of the 5 taxable
years preceding the taxable year of such loss.''.
(b) Qualified Disaster Loss.--Section 172 is amended by
redesignating subsections (j) and (k) as subsections (k) and
(l), respectively, and by inserting after subsection (i) the
following new subsection:
``(j) Rules Relating to Qualified Disaster Losses.--For
purposes of this section--
``(1) In general.--The term `qualified disaster loss' means
the lesser of--
``(A) the sum of--
``(i) the losses allowable under section 165 for the
taxable year--
``(I) attributable to a federally declared disaster (as
defined in section 165(h)(3)(C)(i)) occurring before January
1, 2010, and
``(II) occurring in a disaster area (as defined in section
165(h)(3)(C)(ii)), and
``(ii) the deduction for the taxable year for qualified
disaster expenses which is allowable under section 198A(a) or
which would be so allowable if not otherwise treated as an
expense, or
``(B) the net operating loss for such taxable year.
``(2) Coordination with subsection (b)(2).--For purposes of
applying subsection (b)(2), a qualified disaster loss for any
taxable year shall be treated in a manner similar to the
manner in which a specified liability loss is treated.
``(3) Election.--Any taxpayer entitled to a 5-year
carryback under subsection (b)(1)(J) from any loss year may
elect to have the carryback period with respect to such loss
[[Page 23709]]
year determined without regard to subsection (b)(1)(J). Such
election shall be made in such manner as may be prescribed by
the Secretary and shall be made by the due date (including
extensions of time) for filing the taxpayer's return for the
taxable year of the net operating loss. Such election, once
made for any taxable year, shall be irrevocable for such
taxable year.
``(4) Exclusion.--The term `qualified disaster loss' shall
not include any loss with respect to any property described
in section 1400N(p)(3).''.
(c) Loss Deduction Allowed in Computing Alternative Minimum
Taxable Income.--Subsection (d) of section 56 is amended by
adding at the end the following new paragraph:
``(3) Net operating loss attributable to federally declared
disasters.--In the case of a taxpayer which has a qualified
disaster loss (as defined by section 172(b)(1)(J)) for the
taxable year, paragraph (1) shall be applied by increasing
the amount determined under subparagraph (A)(ii)(I) thereof
by the sum of the carrybacks and carryovers of such loss.''.
(d) Conforming Amendments.--
(1) Clause (ii) of section 172(b)(1)(F) is amended by
inserting ``or qualified disaster loss (as defined in
subsection (j))'' before the period at the end of the last
sentence.
(2) Paragraph (1) of section 172(i) is amended by adding at
the end the following new flush sentence:
``Such term shall not include any qualified disaster loss (as
defined in subsection (j)).''.
(e) Effective Date.--The amendments made by this section
shall apply to losses arising in taxable years beginning
after December 31, 2007, in connection with disasters
declared after such date.
SEC. 709. WAIVER OF CERTAIN MORTGAGE REVENUE BOND
REQUIREMENTS FOLLOWING FEDERALLY DECLARED
DISASTERS.
(a) In General.--Subsection (k) of section 143 is amended
by adding at the end the following new paragraph:
``(12) Special rules for residences destroyed in federally
declared disasters.--
``(A) Principal residence destroyed.--At the election of
the taxpayer, if the principal residence (within the meaning
of section 121) of such taxpayer is--
``(i) rendered unsafe for use as a residence by reason of a
federally declared disaster occurring before January 1, 2010,
or
``(ii) demolished or relocated by reason of an order of the
government of a State or political subdivision thereof on
account of a federally declared disaster occurring before
such date,
then, for the 2-year period beginning on the date of the
disaster declaration, subsection (d)(1) shall not apply with
respect to such taxpayer and subsection (e) shall be applied
by substituting `110' for `90' in paragraph (1) thereof.
``(B) Principal residence damaged.--
``(i) In general.--At the election of the taxpayer, if the
principal residence (within the meaning of section 121) of
such taxpayer was damaged as the result of a federally
declared disaster occurring before January 1, 2010, any
owner-financing provided in connection with the repair or
reconstruction of such residence shall be treated as a
qualified rehabilitation loan.
``(ii) Limitation.--The aggregate owner-financing to which
clause (i) applies shall not exceed the lesser of--
``(I) the cost of such repair or reconstruction, or
``(II) $150,000.
``(C) Federally declared disaster.--For purposes of this
paragraph, the term `federally declared disaster' has the
meaning given such term by section 165(h)(3)(C)(i).
``(D) Election; denial of double benefit.--
``(i) Election.--An election under this paragraph may not
be revoked except with the consent of the Secretary.
``(ii) Denial of double benefit.--If a taxpayer elects the
application of this paragraph, paragraph (11) shall not apply
with respect to the purchase or financing of any residence by
such taxpayer.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to disasters occurring after December 31, 2007.
SEC. 710. SPECIAL DEPRECIATION ALLOWANCE FOR QUALIFIED
DISASTER PROPERTY.
(a) In General.--Section 168, as amended by this Act, is
amended by adding at the end the following new subsection:
``(n) Special Allowance for Qualified Disaster Assistance
Property.--
``(1) In general.--In the case of any qualified disaster
assistance property--
``(A) the depreciation deduction provided by section 167(a)
for the taxable year in which such property is placed in
service shall include an allowance equal to 50 percent of the
adjusted basis of the qualified disaster assistance property,
and
``(B) the adjusted basis of the qualified disaster
assistance property shall be reduced by the amount of such
deduction before computing the amount otherwise allowable as
a depreciation deduction under this chapter for such taxable
year and any subsequent taxable year.
``(2) Qualified disaster assistance property.--For purposes
of this subsection--
``(A) In general.--The term `qualified disaster assistance
property' means any property--
``(i)(I) which is described in subsection (k)(2)(A)(i), or
``(II) which is nonresidential real property or residential
rental property,
``(ii) substantially all of the use of which is--
``(I) in a disaster area with respect to a federally
declared disaster occurring before January 1, 2010, and
``(II) in the active conduct of a trade or business by the
taxpayer in such disaster area,
``(iii) which--
``(I) rehabilitates property damaged, or replaces property
destroyed or condemned, as a result of such federally
declared disaster, except that, for purposes of this clause,
property shall be treated as replacing property destroyed or
condemned if, as part of an integrated plan, such property
replaces property which is included in a continuous area
which includes real property destroyed or condemned, and
``(II) is similar in nature to, and located in the same
county as, the property being rehabilitated or replaced,
``(iv) the original use of which in such disaster area
commences with an eligible taxpayer on or after the
applicable disaster date,
``(v) which is acquired by such eligible taxpayer by
purchase (as defined in section 179(d)) on or after the
applicable disaster date, but only if no written binding
contract for the acquisition was in effect before such date,
and
``(vi) which is placed in service by such eligible taxpayer
on or before the date which is the last day of the third
calendar year following the applicable disaster date (the
fourth calendar year in the case of nonresidential real
property and residential rental property).
``(B) Exceptions.--
``(i) Other bonus depreciation property.--The term
`qualified disaster assistance property' shall not include--
``(I) any property to which subsection (k) (determined
without regard to paragraph (4)), (l), or (m) applies,
``(II) any property to which section 1400N(d) applies, and
``(III) any property described in section 1400N(p)(3).
``(ii) Alternative depreciation property.--The term
`qualified disaster assistance property' shall not include
any property to which the alternative depreciation system
under subsection (g) applies, determined without regard to
paragraph (7) of subsection (g) (relating to election to have
system apply).
``(iii) Tax-exempt bond financed property.--Such term shall
not include any property any portion of which is financed
with the proceeds of any obligation the interest on which is
exempt from tax under section 103.
``(iv) Qualified revitalization buildings.--Such term shall
not include any qualified revitalization building with
respect to which the taxpayer has elected the application of
paragraph (1) or (2) of section 1400I(a).
``(v) Election out.--If a taxpayer makes an election under
this clause with respect to any class of property for any
taxable year, this subsection shall not apply to all property
in such class placed in service during such taxable year.
``(C) Special rules.--For purposes of this subsection,
rules similar to the rules of subparagraph (E) of subsection
(k)(2) shall apply, except that such subparagraph shall be
applied--
``(i) by substituting `the applicable disaster date' for
`December 31, 2007' each place it appears therein,
``(ii) without regard to `and before January 1, 2009' in
clause (i) thereof, and
``(iii) by substituting `qualified disaster assistance
property' for `qualified property' in clause (iv) thereof.
``(D) Allowance against alternative minimum tax.--For
purposes of this subsection, rules similar to the rules of
subsection (k)(2)(G) shall apply.
``(3) Other definitions.--For purposes of this subsection--
``(A) Applicable disaster date.--The term `applicable
disaster date' means, with respect to any federally declared
disaster, the date on which such federally declared disaster
occurs.
``(B) Federally declared disaster.--The term `federally
declared disaster' has the meaning given such term under
section 165(h)(3)(C)(i).
``(C) Disaster area.--The term `disaster area' has the
meaning given such term under section 165(h)(3)(C)(ii).
``(D) Eligible taxpayer.--The term `eligible taxpayer'
means a taxpayer who has suffered an economic loss
attributable to a federally declared disaster.
``(4) Recapture.--For purposes of this subsection, rules
similar to the rules under section 179(d)(10) shall apply
with respect to any qualified disaster assistance property
which ceases to be qualified disaster assistance property.''.
(b) Effective Date.--The amendment made by this section
shall apply to property
[[Page 23710]]
placed in service after December 31, 2007, with respect
disasters declared after such date.
SEC. 711. INCREASED EXPENSING FOR QUALIFIED DISASTER
ASSISTANCE PROPERTY.
(a) In General.--Section 179 is amended by adding at the
end the following new subsection:
``(e) Special Rules for Qualified Disaster Assistance
Property.--
``(1) In general.--For purposes of this section--
``(A) the dollar amount in effect under subsection (b)(1)
for the taxable year shall be increased by the lesser of--
``(i) $100,000, or
``(ii) the cost of qualified section 179 disaster
assistance property placed in service during the taxable
year, and
``(B) the dollar amount in effect under subsection (b)(2)
for the taxable year shall be increased by the lesser of--
``(i) $600,000, or
``(ii) the cost of qualified section 179 disaster
assistance property placed in service during the taxable
year.
``(2) Qualified section 179 disaster assistance property.--
For purposes of this subsection, the term `qualified section
179 disaster assistance property' means section 179 property
(as defined in subsection (d)) which is qualified disaster
assistance property (as defined in section 168(n)(2)).
``(3) Coordination with empowerment zones and renewal
communities.--For purposes of sections 1397A and 1400J,
qualified section 179 disaster assistance property shall not
be treated as qualified zone property or qualified renewal
property, unless the taxpayer elects not to take such
qualified section 179 disaster assistance property into
account for purposes of this subsection.
``(4) Recapture.--For purposes of this subsection, rules
similar to the rules under subsection (d)(10) shall apply
with respect to any qualified section 179 disaster assistance
property which ceases to be qualified section 179 disaster
assistance property.''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2007, with respect disasters declared after such date.
SEC. 712. COORDINATION WITH HEARTLAND DISASTER RELIEF.
The amendments made by this subtitle, other than the
amendments made by sections 706(a)(2), 710, and 711, shall
not apply to any disaster described in section 702(c)(1)(A),
or to any expenditure or loss resulting from such disaster.
TITLE VIII--SPENDING REDUCTIONS AND APPROPRIATE REVENUE RAISERS FOR NEW
TAX RELIEF POLICY
SEC. 801. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX
INDIFFERENT PARTIES.
(a) In General.--Subpart B of part II of subchapter E of
chapter 1 is amended by inserting after section 457 the
following new section:
``SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN
TAX INDIFFERENT PARTIES.
``(a) In General.--Any compensation which is deferred under
a nonqualified deferred compensation plan of a nonqualified
entity shall be includible in gross income when there is no
substantial risk of forfeiture of the rights to such
compensation.
``(b) Nonqualified Entity.--For purposes of this section,
the term `nonqualified entity' means--
``(1) any foreign corporation unless substantially all of
its income is--
``(A) effectively connected with the conduct of a trade or
business in the United States, or
``(B) subject to a comprehensive foreign income tax, and
``(2) any partnership unless substantially all of its
income is allocated to persons other than--
``(A) foreign persons with respect to whom such income is
not subject to a comprehensive foreign income tax, and
``(B) organizations which are exempt from tax under this
title.
``(c) Determinability of Amounts of Compensation.--
``(1) In general.--If the amount of any compensation is not
determinable at the time that such compensation is otherwise
includible in gross income under subsection (a)--
``(A) such amount shall be so includible in gross income
when determinable, and
``(B) the tax imposed under this chapter for the taxable
year in which such compensation is includible in gross income
shall be increased by the sum of--
``(i) the amount of interest determined under paragraph
(2), and
``(ii) an amount equal to 20 percent of the amount of such
compensation.
``(2) Interest.--For purposes of paragraph (1)(B)(i), the
interest determined under this paragraph for any taxable year
is the amount of interest at the underpayment rate under
section 6621 plus 1 percentage point on the underpayments
that would have occurred had the deferred compensation been
includible in gross income for the taxable year in which
first deferred or, if later, the first taxable year in which
such deferred compensation is not subject to a substantial
risk of forfeiture.
``(d) Other Definitions and Special Rules.--For purposes of
this section--
``(1) Substantial risk of forfeiture.--
``(A) In general.--The rights of a person to compensation
shall be treated as subject to a substantial risk of
forfeiture only if such person's rights to such compensation
are conditioned upon the future performance of substantial
services by any individual.
``(B) Exception for compensation based on gain recognized
on an investment asset.--
``(i) In general.--To the extent provided in regulations
prescribed by the Secretary, if compensation is determined
solely by reference to the amount of gain recognized on the
disposition of an investment asset, such compensation shall
be treated as subject to a substantial risk of forfeiture
until the date of such disposition.
``(ii) Investment asset.--For purposes of clause (i), the
term `investment asset' means any single asset (other than an
investment fund or similar entity)--
``(I) acquired directly by an investment fund or similar
entity,
``(II) with respect to which such entity does not (nor does
any person related to such entity) participate in the active
management of such asset (or if such asset is an interest in
an entity, in the active management of the activities of such
entity), and
``(III) substantially all of any gain on the disposition of
which (other than such deferred compensation) is allocated to
investors in such entity.
``(iii) Coordination with special rule.--Paragraph (3)(B)
shall not apply to any compensation to which clause (i)
applies.
``(2) Comprehensive foreign income tax.--The term
`comprehensive foreign income tax' means, with respect to any
foreign person, the income tax of a foreign country if--
``(A) such person is eligible for the benefits of a
comprehensive income tax treaty between such foreign country
and the United States, or
``(B) such person demonstrates to the satisfaction of the
Secretary that such foreign country has a comprehensive
income tax.
``(3) Nonqualified deferred compensation plan.--
``(A) In general.--The term `nonqualified deferred
compensation plan' has the meaning given such term under
section 409A(d), except that such term shall include any plan
that provides a right to compensation based on the
appreciation in value of a specified number of equity units
of the service recipient.
``(B) Exception.--Compensation shall not be treated as
deferred for purposes of this section if the service provider
receives payment of such compensation not later than 12
months after the end of the taxable year of the service
recipient during which the right to the payment of such
compensation is no longer subject to a substantial risk of
forfeiture.
``(4) Exception for certain compensation with respect to
effectively connected income.--In the case a foreign
corporation with income which is taxable under section 882,
this section shall not apply to compensation which, had such
compensation had been paid in cash on the date that such
compensation ceased to be subject to a substantial risk of
forfeiture, would have been deductible by such foreign
corporation against such income.
``(5) Application of rules.--Rules similar to the rules of
paragraphs (5) and (6) of section 409A(d) shall apply.
``(e) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
the purposes of this section, including regulations
disregarding a substantial risk of forfeiture in cases where
necessary to carry out the purposes of this section.''.
(b) Conforming Amendment.--Section 26(b)(2), as amended by
the Housing Assistance Tax Act of 2008, is amended by
striking ``and'' at the end of subparagraph (V), by striking
the period at the end of subparagraph (W) and inserting ``,
and'', and by adding at the end the following new
subparagraph:
``(X) section 457A(c)(1)(B) (relating to determinability of
amounts of compensation).''.
(c) Clerical Amendment.--The table of sections of subpart B
of part II of subchapter E of chapter 1 is amended by
inserting after the item relating to section 457 the
following new item:
``Sec. 457A. Nonqualified deferred compensation from certain tax
indifferent parties.''.
(d) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to amounts deferred which are attributable to services
performed after December 31, 2008.
(2) Application to existing deferrals.--In the case of any
amount deferred to which the amendments made by this section
do not apply solely by reason of the fact that the amount is
attributable to services performed before January 1, 2009, to
the extent such amount is not includible in gross income in a
taxable year beginning before 2018, such amounts shall be
includible in gross income in the later of--
[[Page 23711]]
(A) the last taxable year beginning before 2018, or
(B) the taxable year in which there is no substantial risk
of forfeiture of the rights to such compensation (determined
in the same manner as determined for purposes of section 457A
of the Internal Revenue Code of 1986, as added by this
section).
(3) Accelerated payments.--No later than 120 days after the
date of the enactment of this Act, the Secretary shall issue
guidance providing a limited period of time during which a
nonqualified deferred compensation arrangement attributable
to services performed on or before December 31, 2008, may,
without violating the requirements of section 409A(a) of the
Internal Revenue Code of 1986, be amended to conform the date
of distribution to the date the amounts are required to be
included in income.
(4) Certain back-to-back arrangements.--If the taxpayer is
also a service recipient and maintains one or more
nonqualified deferred compensation arrangements for its
service providers under which any amount is attributable to
services performed on or before December 31, 2008, the
guidance issued under paragraph (4) shall permit such
arrangements to be amended to conform the dates of
distribution under such arrangement to the date amounts are
required to be included in the income of such taxpayer under
this subsection.
(5) Accelerated payment not treated as material
modification.--Any amendment to a nonqualified deferred
compensation arrangement made pursuant to paragraph (4) or
(5) shall not be treated as a material modification of the
arrangement for purposes of section 409A of the Internal
Revenue Code of 1986.
______
SA 5686. Mr. DODD proposed an amendment to the bill H.R. 1424, of
1974, section 2705 of the Public Health Service Act, section 9812 of
the Internal Revenue Code of 1986 to require equity in the provision of
mental health and substance-related disorder benefits under group
health plans, to prohibit discrimination on the basis of genetic
information with respect to health insurance and employment, and for
other purposes; as follows:
Amend the title so as to read:
``To provide authority for the Federal Government to
purchase and insure certain types of troubled assets for the
purposes of providing stability to and preventing disruption
in the economy and financial system and protecting taxpayers,
to amend the Internal Revenue Code of 1986 to provide
incentives for energy production and conservation, to extend
certain expiring provisions, to provide individual income tax
relief, and for other purposes''.
______
SA 5687. Mr. SANDERS proposed an amendment to amendment SA 5685
proposed by Mr. Dodd to the bill H.R. 1424, of 1974, section 2705 of
the Public Health Service Act, section 9812 of the Internal Revenue
Code of 1986 to require equity in the provision of mental health and
substance-related disorder benefits under group health plans, to
prohibit discrimination on the basis of genetic information with
respect to health insurance and employment, and for other purposes; as
follows:
At the end add the following:
SEC. 304. SURTAX ON HIGH INCOME EARNERS.
(a) In General.--Part I of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after
section 1 the following new section:
``SEC. 1A. INCREASE IN TAX ON HIGH INCOME INDIVIDUALS.
``(a) General Rule.--In the case of a taxpayer other than a
corporation, there is hereby imposed (in addition to any
other tax imposed by this subtitle) a tax equal to 10 percent
of so much of modified adjusted gross income as exceeds
$500,000 ($1,000,000 in the case of a joint return or a
surviving spouse (as defined in section 2(a)).
``(b) Modified Adjusted Gross Income.--For purposes of this
section, the term `modified adjusted gross income' means
adjusted gross income reduced by any deduction allowed for
investment interest (as defined in section 163(d)). In the
case of an estate or trust, a rule similar to the rule of
section 67(e) shall apply for purposes of determining
adjusted gross income for purposes of this section.
``(c) Nonresident Alien.--In the case of a nonresident
alien individual, only amounts taken into account in
connection with the tax imposed by section 871(b) shall be
taken into account under this section.
``(d) Marital Status.--For purposes of this section,
marital status shall be determined under section 7703.
``(e) Not Treated as Tax Imposed by This Chapter for
Certain Purposes.--The tax imposed under this section shall
not be treated as tax imposed by this chapter for purposes of
determining the amount of any credit under this chapter or
for purposes of section 55.
``(f) Termination.--This section shall not apply to taxable
years beginning after the date which is 5 years after the
date of the enactment of this section.''.
(b) Clerical Amendment.--The table of sections for part I
of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after the item relating to
section 1 the following new item:
``Sec. 1A. Increase in tax on high income individuals.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.
(d) Section 15 Not to Apply.--The amendment made by
subsection (a) shall not be treated as a change in a rate of
tax for purposes of section 15 of the Internal Revenue Code
of 1986.
______
SA 5688. Mr. DURBIN proposed an amendment to the bill S. 1703, to
prevent and reduce trafficking in persons; as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Trafficking in Persons
Accountability Act of 2008''.
SEC. 2. JURISDICTION IN CERTAIN TRAFFICKING OFFENSES.
(a) In General.--Chapter 77 of title 18, United States
Code, is amended by adding at the end the following:
``Sec. 1596. Additional jurisdiction in certain trafficking
offenses
``(a) In General.--In addition to any domestic or extra-
territorial jurisdiction otherwise provided by law, the
courts of the United States have extra-territorial
jurisdiction over any offense (or any attempt or conspiracy
to commit an offense) under section 1581, section 1583,
section 1584, section 1589, section 1590, or section 1591 of
this title if--
``(1) an alleged offender is a national of the United
States or an alien lawfully admitted for permanent residence
(as those terms are defined in section 101 of the Immigration
and Nationality Act (8 U.S.C. 1101)); or
``(2) an alleged offender is present in the United States,
irrespective of the nationality of the alleged offender.
``(b) Limitation on Prosecutions of Offenses Prosecuted in
Other Countries.--No prosecution may be commenced against a
person under this section if a foreign government, in
accordance with jurisdiction recognized by the United States,
has prosecuted or is prosecuting such person for the conduct
constituting such offense, except upon the approval of the
Attorney General or the Deputy Attorney General (or a person
acting in either such capacity), which function of approval
may not be delegated.''.
(b) Clerical Amendment.--The table of sections at the
beginning of chapter 77 of title 18, United States Code, is
amended by adding at the end the following:
``1596. Additional jurisdiction in certain trafficking offenses.''.
______
SA 5689. Mr. DURBIN (for Ms. Collins) proposed an amendment to the
bill S. 3013, to provide for retirement equity for Federal employees in
nonforeign areas outside the 48 contiguous States and the District of
Columbia, and for other purposes; as follows:
On page 7, line 8, strike ``9'' and insert ``8''.
On page 10, line 12, strike ``the'' and insert ``this''.
On page 17, line 18, strike ``or 8''.
On page 21, line 1, strike all through page 22, line 17.
On page 22, line 18, strike ``SEC. 9'' and insert ``SEC.
8''.
On page 23, line 20, strike ``SEC. 10'' and insert ``SEC.
9''.
______
SA 5690. Mr. DURBIN (for Mr. Cornyn (for himself and Mrs. Feinstein))
proposed an amendment to the bill S. 3073, to amend the Uniformed and
Overseas Citizens Absentee Voting Act to improve procedures for the
collection and delivery of absentee ballots of absent overseas
uniformed services voters, and for other purposes; as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. PROCEDURES FOR COLLECTION AND DELIVERY OF MARKED
ABSENTEE BALLOTS OF ABSENT OVERSEAS UNIFORMED
SERVICES VOTERS.
(a) Procedures.--
(1) In general.--The Uniformed and Overseas Citizens
Absentee Voting Act (42 U.S.C. 1973ff et seq.) is amended by
inserting after section 103 the following new section:
``SEC. 103A. PROCEDURES FOR COLLECTION AND DELIVERY OF MARKED
ABSENTEE BALLOTS OF ABSENT OVERSEAS UNIFORMED
SERVICES VOTERS.
``(a) Collection.--The Presidential designee shall
establish procedures for collecting marked absentee ballots
of absent overseas uniformed services voters in regularly
scheduled general elections for Federal office, including
absentee ballots prepared by States and Federal write-in
absentee ballots prescribed under section 103, and for
delivering the ballots to the appropriate election officials.
[[Page 23712]]
``(b) Ensuring Delivery Prior to Closing of Polls.--
``(1) In general.--Under the procedures established under
this section, the Presidential designee shall ensure that any
marked absentee ballot for a regularly scheduled general
election for Federal office which is collected prior to the
deadline described in paragraph (3) is delivered to the
appropriate election official in a State prior to the time
established by the State for the closing of the polls on the
date of the election.
``(2) Contract with express mail providers.--
``(A) In general.--The Presidential designee shall carry
out this section by contract with one or more providers of
express mail services.
``(B) Special rule for voters in jurisdictions using post
office boxes for collection of marked absentee ballots.--In
the case of an absent uniformed services voter who wishes to
use the procedures established under this section and whose
marked absentee ballot is required by the appropriate
election official to be delivered to a post office box, the
Presidential designee shall enter into an agreement with the
United States Postal Service for the delivery of the ballot
to the election official under the procedures established
under this section.
``(3) Deadline described.--
``(A) In general.--Except as provided in subparagraph (B),
the deadline described in this paragraph is noon (in the
location in which the ballot is collected) on the last
Tuesday that precedes the date of the election.
``(B) Authority to establish alternative deadline for
certain locations.--If the Presidential designee determines
that the deadline described in subparagraph (A) is not
sufficient to ensure timely delivery of the ballot under
paragraph (1) with respect to a particular location because
of remoteness or other factors, the Presidential designee may
establish as an alternative deadline for that location the
latest date occurring prior to the deadline described in
subparagraph (A) which is sufficient to ensure timely
delivery of the ballot under paragraph (1).
``(4) Prohibition on refusal by states to accept marked
absentee ballots not delivered by postal service or in
person.--A State may not refuse to accept or process any
marked absentee ballot delivered under the procedures
established under this section on the grounds that the ballot
is received by the State other than through delivery by the
United States Postal Service.
``(c) Tracking Mechanism.--Under the procedures established
under this section, the entity responsible for delivering
marked absentee ballots to the appropriate election officials
shall implement procedures to enable any individual whose
ballot for a regularly scheduled general election for Federal
office is collected by the Presidential designee to determine
whether the ballot has been delivered to the appropriate
election official, using the Internet, an automated telephone
system, or such other methods as the entity may provide.
``(d) Absent Overseas Uniformed Services Voter Defined.--In
this section, the term `absent overseas uniformed services
voter' means an overseas voter described in section
107(5)(A).
``(e) Authorization of Appropriations.--There are
authorized to be appropriated to the Presidential designee
such sums as may be necessary to carry out this section.''.
(2) Effective date.--Section 103A of the Uniformed and
Overseas Citizens Absentee Voting Act, as added by this
subsection, shall apply with respect to each regularly
scheduled general election for Federal office held on or
after November 1, 2010.
(b) Conforming Amendments.--
(1) Federal responsibilities.--Section 101(b) of such Act
(42 U.S.C. 1973ff(b)) is amended--
(A) by striking ``and'' at the end of paragraph (6);
(B) by striking the period at the end of paragraph (7) and
inserting ``; and''; and
(C) by adding at the end the following new paragraph:
``(8) carry out section 103A with respect to the collection
and delivery of marked absentee ballots of absent overseas
uniformed services voters in elections for Federal office.''.
(2) State responsibilities.--Section 102(a) of such Act (42
U.S.C. 1973ff--1(a)) is amended--
(A) by striking ``and'' at the end of paragraph (4);
(B) by striking the period at the end of paragraph (5) and
inserting ``; and''; and
(C) by adding at the end the following new paragraph:
``(6) carry out section 103A(b)(2) with respect to the
processing and acceptance of marked absentee ballots of
absent overseas uniformed services voters.''.
(c) Outreach for Absent Overseas Uniformed Services Voters
on Procedures.--The Presidential designee shall take
appropriate actions to inform individuals who are anticipated
to be absent overseas uniformed services voters in the
regularly scheduled general election for Federal office held
in November 2008 of the procedures for the collection and
delivery of marked absentee ballots established pursuant to
section 103A of the Uniformed and Overseas Citizens Absentee
Voting Act, as added by subsection (a), including the manner
in which such voters may utilize such procedures for the
submittal of marked absentee ballots in regularly scheduled
elections for Federal office.
(d) Reports on Utilization of Procedures.--
(1) Reports required.--Not later than 180 days after each
regularly scheduled general election for Federal office held
after January 1, 2008, the Presidential designee shall submit
to the congressional defense committees a report on the
utilization of the procedures for the collection and delivery
of marked absentee ballots established pursuant to section
103A of the Uniformed and Overseas Citizens Absentee Voting
Act, as so added, during such general election.
(2) Elements.--Each report under paragraph (1) shall
include, for the general election covered by such report, a
description of the utilization of the procedures described in
that paragraph during such general election, including the
number of marked absentee ballots collected and delivered
under such procedures.
(e) Report on Status of Implementation.--
(1) Report required.--Not later than one year after the
date of the enactment of this Act, the Presidential designee
shall submit to the congressional defense committees a report
on the status of the implementation of the program for the
collection and delivery of marked absentee ballots
established pursuant to section 103A of the Uniformed and
Overseas Citizens Absentee Voting Act, as added by subsection
(a).
(2) Elements.--The report under paragraph (1) shall include
a status of the implementation of the program and a detailed
description of the specific steps taken towards its
implementation for November 2009 and November 2010.
(f) Definitions.--In this section:
(1) The term ``absent overseas uniformed services voter''
has the meaning given that term in section 103A(d) of the
Uniformed and Overseas Citizens Absentee Voting Act, as added
by subsection (a).
(2) The term ``Presidential designee'' means the official
designated under section 101(a) of the Uniformed and Overseas
Citizens Absentee Voting Act (42 U.S.C. 1973ff(a)).
(3) The term ``congressional defense committees'' means--
(A) the Committee on Armed Services and the Committee on
Appropriations of the Senate; and
(B) the Committee on Armed Services and the Committee on
Appropriations of the House of Representatives.
SEC. 2. PROHIBITION ON REFUSAL TO ACCEPT VOTER REGISTRATION
AND ABSENTEE BALLOT APPLICATIONS AND FEDERAL
WRITE-IN ABSENTEE BALLOTS FOR FAILURE TO MEET
NONESSENTIAL REQUIREMENTS.
(a) Voter Registration and Absentee Ballot Applications.--
(1) Prohibiting refusal to accept applications for failure
to meet nonessential requirements.--Section 102 of the
Uniformed and Overseas Citizens Absentee Voting Act (42
U.S.C. 1973ff-1) is amended by adding at the end the
following new subsection:
``(e) Prohibiting Refusal To Accept Applications for
Failure To Meet Nonessential Requirements.--A State shall
accept and process any otherwise valid voter registration
application or absentee ballot application (including the
official post card form prescribed under section 101)
submitted in any manner by an absent uniformed services voter
or overseas voter that contains the information required on
the official post card form prescribed under section 101
(other than information which the Presidential designee, in
consultation with the Election Assistance Commission and the
Election Assistance Commission Board of Advisors under
section 214 of the Help America Vote Act of 2002 (42 U.S.C.
15344), determines, under regulations promulgated by the
Presidential designee, is not clearly necessary to prevent
fraud in the conduct of elections).''.
(2) Effective date.--Subsection (e) of section 102 of the
Uniformed and Overseas Citizens Absentee Voting Act, as added
by this subsection, shall apply with respect to each
regularly scheduled general election for Federal office held
on or after November 1, 2010.
(b) Federal Write-in Absentee Ballot.--
(1) Prohibiting refusal to accept ballot for failure to
meet nonessential requirements.--Section 103 of such Act (42
U.S.C. 1973ff-2) is amended--
(A) by redesignating subsection (f) as subsection (g); and
(B) by inserting after subsection (e) the following new
subsection:
``(f) Prohibiting Refusal To Accept Ballot for Failure To
Meet Nonessential Requirements.--A State shall accept and
process any otherwise valid Federal write-in absentee ballot
submitted in any manner by an absent uniformed services voter
or overseas voter that contains the information required to
be submitted with such ballot by the Presidential designee
(other than information which the Presidential designee, in
consultation with the Election Assistance Commission and the
Election Assistance Commission Board of Advisors under
section 214 of the Help America Vote Act of 2002 (42 U.S.C.
[[Page 23713]]
15344), determines, under regulations promulgated by the
Presidential designee, is not clearly necessary to prevent
fraud in the conduct of elections).''.
(2) Effective date.--Subsection (f) of section 102 of the
Uniformed and Overseas Citizens Absentee Voting Act, as
amended by this subsection, shall apply with respect to each
regularly scheduled general election for Federal office held
on or after November 1, 2010.
______
SA 5691. Ms. CANTWELL submitted an amendment intended to be proposed
by her to the bill H.R. 1424, of 1974, section 2705 of the Public
Health Service Act, section 9812 of the Internal Revenue Code of 1986
to require equity in the provision of mental health and substance-
related disorder benefits under group health plans, to prohibit
discrimination on the basis of genetic information with respect to
health insurance and employment, and for other purposes; which was
ordered to lie on the table; as follows:
At the end of title I in division A, add the following:
SEC. 137. EQUITY AUTHORITY.
(a) In General.--If the Secretary establishes a program
under this division, the Secretary shall use not less than
$350,000,000,000 of the purchase authority provided under
section 101 for the purchase of nonvoting preferred stock
meeting the criteria in subsection (b).
(b) Eligible Financial Institutions.--The authority under
this section may be exercised only with respect to financial
institutions that--
(1) are deemed by the appropriate regulatory authorities to
be adequately capitalized, in relation to their current
balance sheets;
(2) raises such additional capital from private sources or
from the Secretary under this Act as is determined sufficient
by the appropriate regulatory authority for such financial
institution; and
(3) is not deemed to be insolvent by the appropriate
regulatory authority.
(c) Equity Criteria.--Nonvoting preferred stock authorized
for purchase under this section shall--
(1) have a low-interest-rate coupon (not to exceed 5
percent), with warrants attached;
(2) provide that shareholders will have rights to invest on
terms that are equivalent to those of the Secretary, and such
rights shall be tradeable;
(3) set terms to give such rights a positive value; and
(4) give private investors preference over the Secretary in
the allocation of the new issues.
(d) Limits.--Financial institutions recapitalized in
accordance with this section shall be permitted to increase
their leverage until such time as the economy recovers
subject to limitations established by the Board when such
conditions return to normal.
____________________
PRIVILEGES OF THE FLOOR
Mr. DORGAN. I ask unanimous consent that Jon Cary, a legislative
fellow in my office, be allowed the privilege of the floor during
debate on H.R. 7801.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DODD. I ask unanimous consent that the following fellows, law
clerks, and interns on the staff of the Finance Committee be granted
the privileges of the floor for the duration of the debate on economic
stabilization, tax extenders, and energy: Bridget Mallon, Mary Baker,
Sean Thomas, and Kelcy Poulson.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REED. I ask unanimous consent that a detailee to the Committee on
Banking, Housing, and Urban Affairs, Robert Lee, be granted the
privileges of the floor for the remainder of this session.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DODD. I ask unanimous consent that Eric Reither, from Senator
Ensign's office, be granted the privilege of the floor.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________
CORRECTING THE ENROLLMENT OF H.R. 6063
Mr. DURBIN. Mr. President, I ask unanimous consent that the Senate
proceed to the immediate consideration of S. Con. Res. 105, submitted
earlier today.
The PRESIDING OFFICER. The clerk will report the concurrent
resolution by title.
The legislative clerk read as follows:
A concurrent resolution (S. Con. Res. 105) directing the
Clerk of the House of Representatives to correct the
enrollment of H.R. 6063.
There being no objection, the Senate proceeded to consider the
concurrent resolution.
Mr. DURBIN. Mr. President, I ask unanimous consent that the
concurrent resolution be agreed to, the motion to reconsider be laid
upon the table, with no intervening action or debate, and any
statements related to the measure be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
The concurrent resolution (S. Con. Res. 105) was agreed to, as
follows:
S. Con. Res. 105
Resolved by the Senate (the House of Representatives
concurring), That in the enrollment of the bill H.R. 6063, an
Act to authorize the programs of the National Aeronautics and
Space Administration, and for other purposes, the Clerk of
the House of Representatives shall make the following
corrections:
In section 601(b)(2)(A)(iii) of the bill, strike
``Orbiter''.
In section 611(d)(1) of the bill, strike ``first
President'' and insert ``President''.
In section 611(e)(3) of the bill, strike ``correctly'' and
insert ``currently''.
In section 611(e)(7) of the bill, strike ``extention'' and
insert ``extension''.
In section 612 of the bill, strike ``operations'' and
insert ``operational''.
In section 1119 of the bill, strike ``The Report'' and
insert ``The report''.
____________________
TRAFFICKING IN PERSONS ACCOUNTABILITY ACT OF 2007
Mr. DURBIN. Mr. President, I ask unanimous consent that the Senate
proceed to the immediate consideration of Calendar No. 903, S. 1703.
The PRESIDING OFFICER. The clerk will report the bill by title.
The legislative clerk read as follows:
A bill (S. 1703) to prevent and reduce trafficking in
persons.
There being no objection, the Senate proceeded to consider the bill,
which had been reported from the Committee on the Judiciary, with an
amendment to strike all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Trafficking in Persons
Accountability Act of 2007''.
SEC. 2. JURISDICTION IN CERTAIN TRAFFICKING OFFENSES.
(a) In General.--Chapter 77 of title 18, United States
Code, is amended by adding at the end the following:
``Sec. 1596. Additional jurisdiction in certain trafficking
offenses
``(a) In General.--In addition to any domestic or extra-
territorial jurisdiction otherwise provided by law, the
courts of the United States have extra-territorial
jurisdiction over any offense (or any attempt or conspiracy
to commit an offense) under section 1581, section 1583,
section 1584, section 1589, section 1590, or section 1591 of
this title if--
``(1) an alleged offender or victim of the offense is a
national of the United States or an alien lawfully admitted
for permanent residence (as those terms are defined in
section 101 of the Immigration and Nationality Act (8 U.S.C.
1101)); or
``(2) an alleged offender is present in the United States,
irrespective of the nationality of the alleged offender.
``(b) Limitation on Prosecutions of Offenses Prosecuted in
Other Countries.--No prosecution may be commenced against a
person under this section if a foreign government, in
accordance with jurisdiction recognized by the United States,
has prosecuted or is prosecuting such person for the conduct
constituting such offense, except upon the approval of the
Attorney General or the Deputy Attorney General (or a person
acting in either such capacity), which function of approval
may not be delegated.''.
(b) Technical and Conforming Amendment.--The table of
sections at the beginning of chapter 77 of title 18, United
States Code, is amended by adding at the end the following:
``1596. Additional jurisdiction in certain trafficking offenses.''.
Mr. DURBIN. Mr. President, few issues in the world today raise as
many human rights implications as the insidious practice of human
trafficking. According to International Labor Organization estimates,
there are over 12 million people in forced or bonded labor, forced
child labor, or sexual servitude at any given time around the globe.
Human trafficking truly represents commerce in human misery.
The U.S. Government has been increasingly vigilant in addressing this
global scourge. In 2000, Congress passed the Trafficking Victims
Protection Act, which gave our government important new tools to better
protect
[[Page 23714]]
trafficking victims, prosecute traffickers, and prevent future
trafficking crimes in this country and abroad. In 2003 and again in
2005, Congress reauthorized the Trafficking Victims Protection Act, and
I am proud to cosponsor the latest reauthorization bill--the William
Wilberforce Trafficking Victims Protection Reauthorization Act of
2008--which Senators Biden and Brownback introduced in May.
I chair the Senate Judiciary Committee's new Subcommittee on Human
Rights and the Law, created at the beginning of the 110th Congress. Our
subcommittee's second hearing, in March 2007, considered legal options
to stop human trafficking.
The hearing shed light on a legal loophole in current law. The U.S.
government is allowed to prosecute human traffickers who commit crimes
in the United States, but it is not permitted to prosecute traffickers
who commit crimes abroad and then come to our shores.
In June 2007, Senator Coburn and I introduced a bill to close this
loophole. The Trafficking in Persons Accountability Act would permit
the U.S. Government to go after human traffickers who are present in
the United States, regardless of whether their heinous acts took place
in this country or elsewhere. Our bill says to the traffickers: You
cannot come to the United States and use us as a zone of impunity and
as a safe haven for your ill-gotten gains. Closing this loophole would
serve as another tool in the global fight against human trafficking.
The Trafficking in Persons Accountability Act follows on other human
rights legislation I have introduced with Senator Coburn, the ranking
member of the Subcommittee on Human Rights and the Law. We introduced
similar legislation to allow the U.S. Government to prosecute
individuals found in the United States who have recruited children for
combat or deployed child soldiers in another country. Congress recently
approved this bill, and it awaits the President's signature.
And last year, Congress approved a bill to permit the U.S. Government
to prosecute those present in the United States who have committed the
human rights atrocity of genocide anywhere in the world.
The Trafficking in Persons Accountability Act is supported by the
International Justice Mission, the Chicago-based National Immigrant
Justice Center, the Break the Chain Campaign, the Urban Justice Center,
Mosaic Family Services, Global Rights, the Florida Immigrant Advocacy
Center, Asian Pacific Islander Legal Outreach, and the Rape, Abuse &
Incest National Network.
We cannot discuss the issue of human trafficking without
acknowledging the visionary leadership of the late Senator Paul
Wellstone, who called the trafficking of human beings ``one of the most
horrendous human rights violations of our time.''
On the day Congress passed the Trafficking Victims Protection Act on
October 11, 2000, Senator Wellstone went to the Senate floor and said
the following: ``I believe with passage of this legislation . . . we
are lighting a candle. We are lighting a candle for these women and
girls and sometimes men forced into forced labor. . . . This is the
beginning of an international effort to go after this trafficking, to
go after this major, god-awful human rights abuse.''
Senator Wellstone's commitment to combating human trafficking and
other human rights abuses stands as one of his most enduring legacies.
The candle Senator Wellstone lit nearly 8 years ago is burning bright,
and we will rekindle it today with the passage of this legislation.
I urge my Senate colleagues to pass the Trafficking in Persons
Accountability Act, and I hope the House of Representatives will soon
follow suit, so this important bill can be sent to the President and
signed into law.
Mr. LEAHY. Mr. President, I am pleased that today the Senate has
passed the Trafficking in Persons Accountability Act of 2007, which
would improve our efforts to stop the abominable practice of human
trafficking in the United States and around the world. This modern-day
form of slavery forces, defrauds, or coerces victims into sexual or
labor exploitation. It is the world's fastest growing criminal
enterprise and generates $9.5 billion annually, $4 billion of which
goes to the prostitution industry. Nearly 1 million people, mostly
women and children, are trafficked worldwide, including nearly 18,000
persons in the United States.
This legislation would expand the Federal court's jurisdiction over
human trafficking cases to include offenses committed abroad by
noncitizens that enter our borders. Currently, the Department of
Justice can only prosecute human trafficking crimes if they occur
within the United States or are committed by a U.S. citizen abroad.
This legislation would permit the Department of Justice to prosecute
offenders of trafficking crimes abroad if they are present in the
United States and punish human traffickers who attempt to seek refuge
in this country.
Nowhere on Earth should it be acceptable to deceive, abuse, and force
a person into a life of enslavement. We should not tolerate human
trafficking across our borders, nor should we allow trafficking
offenders to seek a safe haven in our country. I commend subcommittee
chairman Senator Durbin for introducing this legislation and for his
hard work to combat human rights abuses worldwide. This is an area in
which I have worked for many years as the chairman and ranking member
of the Foreign Operations Subcommittee of the Appropriations Committee.
I was proud to work with Senator Durbin to create the Human Rights
and the Law Subcommittee, the first congressional committee to
specifically address human rights issues. This subcommittee has held
hearings on many important issues, and two important pieces of
legislation considered by the subcommittee will become law this
Congress. The Genocide Accountability Act closed a loophole that until
now allowed those who commit or incite genocide to seek refuge in our
country without fear of prosecution for their actions. Soon, the
President will sign into law the Child Soldiers Accountability Act,
making it a crime to recruit or use child soldiers. I look forward to
continuing to work with Senator Durbin to make progress towards
eradicating these and other human rights abuses.
This bill is a step forward towards the prevention of human
trafficking, protection of victims, and prosecution of traffickers. I
hope the House of Representatives acts quickly on this legislation so
it can be enacted before Congress adjourns.
Mr. DURBIN. Mr. President, I ask unanimous consent that the Durbin
amendment, which is at the desk, be agreed to, the committee
substitute, as amended be agreed to, the bill, as amended be read a
third time and passed, the motions to reconsider be laid upon the
table, with no intervening action or debate, and any statements related
to the bill be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment (No. 5688) was agreed to, as follows:
(Purpose: To provide a complete substitute)
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Trafficking in Persons
Accountability Act of 2008''.
SEC. 2. JURISDICTION IN CERTAIN TRAFFICKING OFFENSES.
(a) In General.--Chapter 77 of title 18, United States
Code, is amended by adding at the end the following:
``Sec. 1596. Additional jurisdiction in certain trafficking
offenses
``(a) In General.--In addition to any domestic or extra-
territorial jurisdiction otherwise provided by law, the
courts of the United States have extra-territorial
jurisdiction over any offense (or any attempt or conspiracy
to commit an offense) under section 1581, section 1583,
section 1584, section 1589, section 1590, or section 1591 of
this title if--
``(1) an alleged offender is a national of the United
States or an alien lawfully admitted for permanent residence
(as those terms are defined in section 101 of the Immigration
and Nationality Act (8 U.S.C. 1101)); or
``(2) an alleged offender is present in the United States,
irrespective of the nationality of the alleged offender.
``(b) Limitation on Prosecutions of Offenses Prosecuted in
Other Countries.--
[[Page 23715]]
No prosecution may be commenced against a person under this
section if a foreign government, in accordance with
jurisdiction recognized by the United States, has prosecuted
or is prosecuting such person for the conduct constituting
such offense, except upon the approval of the Attorney
General or the Deputy Attorney General (or a person acting in
either such capacity), which function of approval may not be
delegated.''.
(b) Clerical Amendment.--The table of sections at the
beginning of chapter 77 of title 18, United States Code, is
amended by adding at the end the following:
``1596. Additional jurisdiction in certain trafficking offenses.''.
The committee substitute amendment, as amended, was agreed to.
The bill (S. 1703), as amended, was ordered to be engrossed for a
third reading, was read the third time, and passed.
____________________
NON-FOREIGN AREA RETIREMENT EQUITY ASSURANCE ACT OF 2008
Mr. DURBIN. Mr. President, I ask unanimous consent that the Senate
proceed to the immediate consideration of Calendar No. 954, S. 3013.
The PRESIDING OFFICER. The clerk will report the bill by title.
The legislative clerk read as follows:
A bill (S. 3013) to provide for retirement equity for
Federal employees in nonforeign areas outside the 48
contiguous States and the District of Columbia, and for other
purposes.
There being no objection, the Senate proceeded to consider the bill,
which had been reported from the Committee on Homeland Security and
Governmental Affairs, with amendments; as follows:
(The parts of the bill intended to be stricken are shown in boldface
brackets and the parts of the bill intended to be inserted are shown in
italics)
S. 3013
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Non-Foreign Area Retirement
Equity Assurance Act of 2008'' or the ``Non-Foreign AREA Act
of 2008''.
SEC. 2. EXTENSION OF LOCALITY PAY.
[(a) Locality-Based Comparability Payments.--Section
5304(f)(1) of title 5, United States Code, is amended by
striking subparagraph (A) and inserting the following:
[``(A) each General Schedule position in the United States,
as defined under section 5921(4), and its territories and
possessions, including the Commonwealth of Puerto Rico and
the Commonwealth of the Northern Mariana Islands shall be
included within a pay locality; and''.]
(a) Locality-Based Comparability Payments.--Section 5304 of
title 5, United States Code, is amended--
(1) in subsection (f)(1), by striking subparagraph (A) and
inserting the following:
``(A) each General Schedule position in the United States,
as defined under section 5921(4), and its territories and
possessions, including the Commonwealth of Puerto Rico and
the Commonwealth of the Northern Mariana Islands, shall be
included within a pay locality;'';
(2) in subsection (g)--
(A) in paragraph (2)--
(i) in subparagraph (A), by striking ``and'' after the
semicolon;
(ii) by redesignating subparagraph (B) as subparagraph (C);
(iii) by inserting after subparagraph (A) the following:
``(B) positions under subsection (h)(1)(D) not covered by
appraisal systems certified under section 5382; and''; and
(iv) in subparagraph (C) (as redesignated by this
paragraph), by striking ``under subsection (h)(1)(D)'' and
inserting ``under subsection (h)(1)(E)''; and
(B) by adding at the end the following:
``(3) The applicable maximum under this subsection shall be
level II of the Executive Schedule for positions under
subsection (h)(1)(D) covered by appraisal systems certified
under section 5307(d).''; and
(3) in subsection (h)(1)--
(A) in subparagraph (C) by striking ``and'' after the
semicolon;
(B) by redesignating subparagraph (D) as subparagraph (E);
(C) by inserting after subparagraph (C) the following:
``(D) a Senior Executive Service position under section
3132 stationed within the United States, but outside the 48
contiguous States and the District of Columbia in which the
incumbent the day before the date of enactment of the Non-
Foreign Area Retirement Equity Assurance Act of 2008 was
eligible to receive a cost-of-living allowance under section
5941; and''; and
(D) in clause (iii) in the matter following subparagraph
(D), by inserting ``stationed in the 48 contiguous States and
the District of Columbia, or stationed within the United
States, but outside the 48 contiguous States and the District
of Columbia, in which the incumbent the day before the date
of enactment of the Non-Foreign Area Retirement Equity
Assurance Act of 2008 was not eligible to receive a cost-of-
living allowance under section 5941; and'' before the
semicolon.
(b) Allowances Based on Living Costs and Conditions of
Environment.--Section 5941 of title 5, United States Code, is
amended--
(1) in subsection (a), by adding after the last sentence
``Notwithstanding any preceding provision of this subsection,
the cost-of-living allowance rate based on paragraph (1) of
this subsection shall be the cost-of-living allowance rate in
effect on December 31, 2008, except as adjusted under
subsection (c).'';
(2) by redesignating subsection (b) as subsection (d); and
(3) by inserting after subsection (a) the following:
``(b) This section shall apply only to areas that are
designated as cost-of-living allowance areas as in effect on
December 31, 2008.
``(c)(1) The cost-of-living allowance rate payable under
this section shall be adjusted on the first day of the first
applicable pay period beginning on or after--
``(A) January 1, 2009; and
``(B) on January 1 of each calendar year in which a
locality-based comparability adjustment takes effect under
section 4 (2) and (3) of the Non-Foreign Area Retirement
Equity Assurance Act of 2008.
``(2)(A) In this paragraph, the term `applicable locality-
based comparability pay percentage' means, with respect to
calendar year 2009 and each calendar year thereafter, the
applicable percentage under section 4 (1), (2), or (3) of
Non-Foreign Area Retirement Equity Assurance Act of 2008.
``(B) Each adjusted cost-of-living allowance rate under
paragraph (1) shall be computed by--
``(i) subtracting 65 percent of the applicable locality-
based comparability pay percentage from the cost-of-living
allowance percentage rate in effect on December 31, 2008; and
``(ii) dividing the resulting percentage determined under
clause (i) by the sum of--
``(I) one; and
``(II) the applicable locality-based comparability payment
percentage expressed as a numeral.
``(3) No allowance rate computed under paragraph (2) may be
less than zero.
``(4) Each allowance rate computed under paragraph (2)
shall be paid as a percentage of basic pay (including any
applicable locality-based comparability payment under section
5304 or similar provision of law and any applicable special
rate of pay under section 5305 or similar provision of
law).''.
SEC. 3. ADJUSTMENT OF SPECIAL RATES.
(a) In General.--Each special rate of pay established under
section 5305 of title 5, United States Code, and payable in
an area designated as a cost-of-living allowance area under
section 5941(a) of that title, shall be adjusted, on the
dates prescribed by section 4 of this Act, in accordance with
regulations prescribed by the Director of the Office of
Personnel Management under section 9 of this Act.
(b) Department of Veterans Affairs.--Each special rate of
pay established under section 7455 of title 38, United States
Code, and payable in a location designated as a cost-of-
living allowance area under section 5941(a)(1) of title 5,
United States Code, shall be adjusted in accordance with
regulations prescribed by the Secretary of Veterans Affairs
that are consistent with the regulations issued by the
Director of the Office of Personnel Management under
subsection (a).
(c) Temporary Adjustment.--Regulations issued under
subsection (a) or (b) may provide that statutory limitations
on the amount of such special rates may be temporarily raised
to a higher level during the transition period described in
section 4 ending on the first day of the first pay period
beginning on or after January 1, 2011, at which time any
special rate of pay in excess of the applicable limitation
shall be converted to a retained rate under section 5363 of
title 5, United States Code.
SEC. 4. TRANSITION SCHEDULE FOR LOCALITY-BASED COMPARABILITY
PAYMENTS.
Notwithstanding any other provision of this Act or section
5304 or 5304a of title 5, United States Code, in implementing
the amendments made by this Act, for each non-foreign area
determined under section 5941(b) of that title, the
applicable rate for the locality-based comparability
adjustment that is used in the computation required under
section 5941(c) of that title shall be adjusted effective on
the first day of the first pay period beginning on or after
January 1--
(1) in calendar year 2009, by using \1/3\ of the locality
pay percentage for the rest of United States locality pay
area;
(2) in calendar year 2010, by using \2/3\ of the otherwise
applicable comparability payment approved by the President
for each non-foreign area; and
(3) in calendar year 2011 and each subsequent year, by
using the full amount of the applicable comparability payment
approved by the President for each non-foreign area.
SEC. 5. SAVINGS PROVISION.
[(a) In General.--The application of this Act to any
employee may not result in the amount of the decrease in the
amount of pay attributable to special rate pay and the cost-
of-living allowance as in effect on the date of
[[Page 23716]]
enactment of this Act exceeding the amount of the increase in
the locality-based comparability payments paid to that
employee.
[(b)(a) Sense of Congress.--It is the sense of Congress
that the application of this Act to any employee should not
result in a decrease in the take home pay of that employee.
(b) Sense of Congress.--It is the sense of Congress that
the Bureau of Labor Statistics will conduct separate surveys
pursuant to the establishment by the President's Pay Agent of
1 new locality area for the entire State of Hawaii and 1 new
locality area for the entire state of Alaska, and that upon
the completion of the phase in period no employee shall
receive less than the Rest of the U.S. locality pay rate.
(c) Savings Provisions.--
(1) In general.--During the period described under section
4 of this Act, an employee paid a special rate under 5305 of
title 5, United States Code, who the day before the date of
enactment of this Act was eligible to receive a cost-of-
living allowance under section 5941 of title 5, United States
Code, and who continues to be officially stationed in an
allowance area, shall receive an increase in the employee's
special rate consistent with increases in the applicable
special rate schedule. For employees in allowance areas, the
minimum step rate for any grade of a special rate schedule
shall be increased at the time of an increase in the
applicable locality rate percentage for the allowance area by
not less than the dollar increase in the locality-based
comparability payment for a non-special rate employee at the
same minimum step provided under section 4 of the Act, and
corresponding increases shall be provided for all step rates
of the given pay range.
(2) Continuation of cost of living allowance rate.--If an
employee, who the day before the date of enactment of this
Act was eligible to receive a cost-of-living allowance under
section 5941 of title 5, United States Code, would receive a
rate of basic pay and applicable locality-based comparability
payment which is in excess of the maximum rate limitation set
under section 5304(g) of title 5, United States Code, for his
position (but for that maximum rate limitation) due to the
operation of this Act, the employee shall continue to receive
the cost-of-living allowance rate in effect on December 31,
2008 without adjustment until--
(A) the employee leaves the allowance area or pay system;
or
(B) the employee is entitled to receive basic pay
(including any applicable locality-based comparability
payment or similar supplement) at a higher rate,
but, when any such position becomes vacant, the pay of any
subsequent appointee thereto shall be fixed in the manner
provided by applicable law and regulation.
(3) Locality-based comparability payments.--Any employee
covered under paragraph (2) shall receive any applicable
locality-based comparability payment extended under section 4
of this Act which is not in excess of the maximum rate set
under section 5304(g) of title 5, United States Code, for his
position including any future increase to statutory pay caps
under 5318 of title 5, United States Code. Notwithstanding
paragraph (2), to the extent that an employee covered under
that paragraph receives any amount of locality-based
comparability payment, the cost-of-living allowance rate
under that paragraph shall be reduced accordingly, as
provided under section 5941(c)(2)(B) of title 5, United
States Code.
SEC. 6. APPLICATION TO OTHER ELIGIBLE EMPLOYEES.
(a) In General.--
(1) Definition.--In this subsection, the term ``covered
employee'' means--
(A) any employee who--
(i) on--
(I) the day before the date of enactment of this Act--
(aa) was eligible to be paid a cost-of-living allowance
under 5941 of title 5, United States Code; and
(bb) was not eligible to be paid locality-based
comparability payments under 5304 or 5304a of that title; or
(II) or after the date of enactment of this Act becomes
eligible to be paid a cost-of-living allowance under 5941 of
title 5, United States Code; and
(ii) except as provided under paragraph (2), is not covered
under--
(I) section 5941 of title 5, United States Code (as amended
by section 2 of this Act); and
(II) section 4 of this Act; or
(B) any employee who--
(i) on the day before the date of enactment of this Act--
(I) was eligible to be paid an allowance under section
1603(b) of title 10, United States Code;
(II) was eligible to be paid an allowance under section
1005(b) of title 39, United States Code; or
(III) was employed by the Transportation Security
Administration of the Department of Homeland Security and was
eligible to be paid an allowance based on section 5941 of
title 5, United States Code; or
(ii) on or after the date of enactment of this Act--
(I) becomes eligible to be paid an allowance under section
1603(b) of title 10, United States Code;
(II) becomes eligible to be paid an allowance under section
1005(b) of title 39, United States Code; or
(III) is employed by the Transportation Security
Administration of the Department of Homeland Security and
becomes eligible to be paid an allowance based on section
5941 of title 5, United States Code.
(2) Application to covered employees.--
(A) In general.--Notwithstanding any [provision of title 5,
United States Code,]other provision of law, for purposes of
this Act (including the amendments made by this Act) any
covered employee shall be treated as an employee to whom
section 5941 of title 5, United States Code (as amended by
section 2 of this Act), and section 4 of this Act apply.
(B) Pay fixed by statute.--Pay to covered employees under
section 5304 or 5304a of title 5, United States Code, as a
result of the application of this Act shall be considered to
be fixed by statute.
(C) Performance appraisal system.--With respect to a
covered employee who is subject to a performance appraisal
system no part of pay attributable to locality-based
comparability payments as a result of the application of this
Act including section 5941 of title 5, United States Code (as
amended by section 2 of this Act), may be reduced on the
basis of the performance of that employee.
[(b) Postal Service Employees in Nonforeign Areas.--Section
1005(b) of title 39, United States Code, is amended by
inserting ``and the Non-Foreign Area Retirement Equity
Assurance Act of 2008'' after ``Section 5941 of title 5''.]
(b) Postal Employees in Non-Foreign Areas.--
(1) In general.--Section 1005(b) of title 39, United States
Code, is amended--
(A) by inserting ``(1)'' after ``(b)'';
(B) by striking ``Section 5941,'' and inserting ``Except as
provided under paragraph (2), section 5941'';
(C) by striking ``For purposes of such section,'' and
inserting ``Except as provided under paragraph (2), for
purposes of section 5941 of that title,''; and
(D) by adding at the end the following:
``(2) On and after the date of enactment of the Non-Foreign
Area Retirement Equity Assurance Act of 2008--
``(A) the provisions of that Act and section 5941 of title
5 shall apply to officers and employees covered by section
1003(b) and (c) whose duty station is in a nonforeign area;
and
``(B) with respect to officers and employees of the Postal
Service (other than those officers and employees described
under subparagraph (A)) section 6(b)(2) of that Act shall
apply.''.
(2) Continuation of cost of living allowance.--
(A) In general.--Notwithstanding any other provision of
this Act, any employee of the Postal Service (other than an
employee covered by section 1003 (b) and (c) of title 39,
United States Code, whose duty station is in a nonforeign
area) who is paid an allowance under section 1005(b) of that
title shall be treated for all purposes as if the provisions
of this Act (including the amendments made by this Act) had
not been enacted, except that the cost-of-living allowance
rate paid to that employee--
(i) may result in the allowance exceeding 25 percent of the
rate of basic pay of that employee; and
(ii) shall be the greater of--
(I) the cost-of-living allowance rate in effect on December
31, 2008 for the applicable area; or
(II) the applicable locality-based comparability pay
percentage under section 4.
(B) Rule of construction.--Nothing in this Act shall be
construed to--
(i) provide for an employee described under subparagraph
(A) to be a covered employee as defined under subsection (a);
or
(ii) authorize an employee described under subparagraph (A)
to file an election under section 7 or 8 of this Act.
SEC. 7. ELECTION OF ADDITIONAL BASIC PAY FOR ANNUITY
COMPUTATION BY EMPLOYEES.
(a) Definition.--In this section the term ``covered
employee'' means any employee--
(1) to whom section 4 applies;
(2) who is separated from service by reason of retirement
under chapter 83 or 84 of title 5, United States Code, during
the period of January 1, 2009, through December 31, 2011; and
(3) who files and election with the Office of Personnel
Management under subsection (b).
(b) Election.--
(1) In general.--An employee described under subsection (a)
(1) and (2) may file an election with the Office of Personnel
Management to be covered under this section.
(2) Deadline.--An election under this subsection may be
filed not later than December 31, 2011.
[(c) Computation of Annuity.--For purposes of the
computation of an annuity of a covered employee any cost-of-
living allowance under section 5941 of title 5, United States
Code, paid to that employee during the first applicable pay
period beginning on or after January 1, 2009 through the
first applicable pay period ending on or after December 31,
2011, shall be considered basic pay as defined under section
8331(3) or 8401(4) of that title.]
(c) Computation of Annuity.--
(1) In general.--Except as provided under paragraph (2),
for purposes of the computation of an annuity of a covered
employee any cost-of-living allowance under section 5941 of
title 5, United States Code, paid to that employee during the
first applicable pay period beginning on
[[Page 23717]]
or after January 1, 2009 through the first applicable pay
period ending on or after December 31, 2011, shall be
considered basic pay as defined under section 8331(3) or
8401(4) of that title.
(2) Limitation.--The amount of the cost-of-living allowance
which may be considered basic pay under paragraph (1) may not
exceed the amount of the locality-based comparability
payments the employee would have received during that period
for the applicable pay area if the limitation under section 4
of this Act did not apply.
(d) Civil Service Retirement and Disability Retirement
Fund.--
(1) Employee contributions.--A covered employee shall pay
into the Civil Service Retirement and Disability Retirement
Fund--
(A) an amount equal to the difference between--
(i) employee contributions that would have been deducted
and withheld from pay under section 8334 or 8422 of title 5,
United States Code, during the period described under
subsection (c) of this section if that subsection had been in
effect during that period; and
(ii) employee contributions that were actually deducted and
withheld from pay under section 8334 or 8422 of title 5,
United States Code, during that period; and
(B) interest as prescribed under section 8334(e) of title
5, United States Code, based on the amount determined under
subparagraph (A).
(2) Agency contributions.--
(A) In general.--The employing agency of a covered employee
shall pay into the Civil Service Retirement and Disability
Retirement Fund an amount for applicable agency contributions
based on payments made under paragraph (1).
(B) Source.--Amounts paid under this paragraph shall be
contributed from the appropriation or fund used to pay the
employee.
(3) Regulations.--The Office of Personnel Management may
prescribe regulations to carry out this section.
SEC. 8. ELECTION OF COVERAGE BY EMPLOYEES.
(a) In General.--Notwithstanding any other provision of
this Act (other than section 6(b)), an employee may make an
irrevocable election in accordance with this section, if--
(1) that employee is paid an allowance under section
[5491]5941 of title 5, United States Code, during a pay
period in which the date of the enactment of this Act occurs;
or
(2) that employee--
(A) is a covered employee as defined under section 6(a)(1);
and
(B) during a pay period in which the date of the enactment
of this Act occurs is paid an allowance--
(i) under section 1603(b) of title 10, United States Code;
(ii) under section 1005(b) of title 39, United States Code;
or
(iii) based on section 5941 of title 5, United States Code.
(b) Filing Election.--Not later than 60 days after the date
of enactment of this Act, an employee described under
subsection (a) may file an election with the Office of
Personnel Management to be treated for all purposes--
(1) in accordance with the provisions of this Act
(including the amendments made by this Act); or
(2) as if the provisions of this Act (including the
amendments made by this Act) had not been enacted, except
that the cost-of-living allowance rate paid to that employee
shall be the cost-of-living allowance rate in effect on
December 31, 2008, for that employee without any adjustment
after that date.
(c) Failure To File.--Failure to make a timely election
under this section shall be treated in the same manner as an
election made under subsection (b)(1) on the last day
authorized under that subsection.
(d) Notice.--To the greatest extent practicable, the Office
of Personnel Management shall provide timely notice of the
election which may be filed under this section to employees
described under subsection (a).
SEC. 9. REGULATIONS.
(a) In General.--The Director of the Office of Personnel
Management shall prescribe regulations to carry out this Act,
including--
(1) rules for special rate employees described under
section 3;
(2) rules for adjusting rates of basic pay for employees in
pay systems administered by the Office of Personnel
Management when such employees are not entitled to locality-
based comparability payments under section 5304 of title 5,
United States Code, without regard to otherwise applicable
statutory pay limitations during the transition period
described in section 4 ending on the first day of the first
pay period beginning on or after January 1, 2011; and
(3) rules governing establishment and adjustment of saved
or retained rates for any employee whose rate of pay exceeds
applicable pay limitations on the first day of the first pay
period beginning on or after January 1, 2011.
(b) Other Pay Systems.--With the concurrence of the
Director of the Office of Personnel Management, the
administrator of a pay system not administered by the Office
of Personnel Management shall prescribe regulations to carry
out this Act with respect to employees in such pay system,
consistent with the regulations issued by the Office under
subsection (a).
SEC. 10. EFFECTIVE DATES.
(a) In General.--Except as provided by subsection (b), this
Act (including the amendments made by this Act) shall take
effect on the date of enactment of this Act.
(b) Locality Pay and Schedule.--The amendments made by
section 2 and the provisions of section 4 shall take effect
on the first day of the first applicable pay period beginning
on or after January 1, 2009.
Mr. DURBIN. Mr. President, I ask unanimous consent that the committee
amendments be agreed to as original text, the Collins amendment, which
is at the desk, be agreed to, the bill, as amended, be read a third
time and passed, the motions to reconsider be laid upon the table, with
no intervening action or debate, and that any statements related
thereto be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
The committee amendments were agreed to.
The amendment (No. 5689) was agreed to, as follows:
(Purpose: To strike the provision relating to election of coverage by
employees; and for other purposes)
On page 7, line 8, strike ``9'' and insert ``8''.
On page 10, line 12, strike ``the'' and insert ``this''.
On page 17, line 18, strike ``or 8''.
On page 21, line 1, strike all through page 22, line 17.
On page 22, line 18, strike ``SEC. 9'' and insert ``SEC.
8''.
On page 23, line 20, strike ``SEC. 10'' and insert ``SEC.
9''.
The bill (S. 3013), as amended, was ordered to be engrossed for a
third reading, was read the third time, and passed, as follows:
S. 3013
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Non-Foreign Area Retirement
Equity Assurance Act of 2008'' or the ``Non-Foreign AREA Act
of 2008''.
SEC. 2. EXTENSION OF LOCALITY PAY.
(a) Locality-Based Comparability Payments.--Section 5304 of
title 5, United States Code, is amended--
(1) in subsection (f)(1), by striking subparagraph (A) and
inserting the following:
``(A) each General Schedule position in the United States,
as defined under section 5921(4), and its territories and
possessions, including the Commonwealth of Puerto Rico and
the Commonwealth of the Northern Mariana Islands, shall be
included within a pay locality;'';
(2) in subsection (g)--
(A) in paragraph (2)--
(i) in subparagraph (A), by striking ``and'' after the
semicolon;
(ii) by redesignating subparagraph (B) as subparagraph (C);
(iii) by inserting after subparagraph (A) the following:
``(B) positions under subsection (h)(1)(D) not covered by
appraisal systems certified under section 5382; and''; and
(iv) in subparagraph (C) (as redesignated by this
paragraph), by striking ``under subsection (h)(1)(D)'' and
inserting ``under subsection (h)(1)(E)''; and
(B) by adding at the end the following:
``(3) The applicable maximum under this subsection shall be
level II of the Executive Schedule for positions under
subsection (h)(1)(D) covered by appraisal systems certified
under section 5307(d).''; and
(3) in subsection (h)(1)--
(A) in subparagraph (C) by striking ``and'' after the
semicolon;
(B) by redesignating subparagraph (D) as subparagraph (E);
(C) by inserting after subparagraph (C) the following:
``(D) a Senior Executive Service position under section
3132 stationed within the United States, but outside the 48
contiguous States and the District of Columbia in which the
incumbent the day before the date of enactment of the Non-
Foreign Area Retirement Equity Assurance Act of 2008 was
eligible to receive a cost-of-living allowance under section
5941; and''; and
(D) in clause (iii) in the matter following subparagraph
(D), by inserting ``stationed in the 48 contiguous States and
the District of Columbia, or stationed within the United
States, but outside the 48 contiguous States and the District
of Columbia, in which the incumbent the day before the date
of enactment of the Non-Foreign Area Retirement Equity
Assurance Act of 2008 was not eligible to receive a cost-of-
living allowance under section 5941; and'' before the
semicolon.
(b) Allowances Based on Living Costs and Conditions of
Environment.--Section 5941 of title 5, United States Code, is
amended--
[[Page 23718]]
(1) in subsection (a), by adding after the last sentence
``Notwithstanding any preceding provision of this subsection,
the cost-of-living allowance rate based on paragraph (1) of
this subsection shall be the cost-of-living allowance rate in
effect on December 31, 2008, except as adjusted under
subsection (c).'';
(2) by redesignating subsection (b) as subsection (d); and
(3) by inserting after subsection (a) the following:
``(b) This section shall apply only to areas that are
designated as cost-of-living allowance areas as in effect on
December 31, 2008.
``(c)(1) The cost-of-living allowance rate payable under
this section shall be adjusted on the first day of the first
applicable pay period beginning on or after--
``(A) January 1, 2009; and
``(B) on January 1 of each calendar year in which a
locality-based comparability adjustment takes effect under
section 4 (2) and (3) of the Non-Foreign Area Retirement
Equity Assurance Act of 2008.
``(2)(A) In this paragraph, the term `applicable locality-
based comparability pay percentage' means, with respect to
calendar year 2009 and each calendar year thereafter, the
applicable percentage under section 4 (1), (2), or (3) of
Non-Foreign Area Retirement Equity Assurance Act of 2008.
``(B) Each adjusted cost-of-living allowance rate under
paragraph (1) shall be computed by--
``(i) subtracting 65 percent of the applicable locality-
based comparability pay percentage from the cost-of-living
allowance percentage rate in effect on December 31, 2008; and
``(ii) dividing the resulting percentage determined under
clause (i) by the sum of--
``(I) one; and
``(II) the applicable locality-based comparability payment
percentage expressed as a numeral.
``(3) No allowance rate computed under paragraph (2) may be
less than zero.
``(4) Each allowance rate computed under paragraph (2)
shall be paid as a percentage of basic pay (including any
applicable locality-based comparability payment under section
5304 or similar provision of law and any applicable special
rate of pay under section 5305 or similar provision of
law).''.
SEC. 3. ADJUSTMENT OF SPECIAL RATES.
(a) In General.--Each special rate of pay established under
section 5305 of title 5, United States Code, and payable in
an area designated as a cost-of-living allowance area under
section 5941(a) of that title, shall be adjusted, on the
dates prescribed by section 4 of this Act, in accordance with
regulations prescribed by the Director of the Office of
Personnel Management under section 8 of this Act.
(b) Department of Veterans Affairs.--Each special rate of
pay established under section 7455 of title 38, United States
Code, and payable in a location designated as a cost-of-
living allowance area under section 5941(a)(1) of title 5,
United States Code, shall be adjusted in accordance with
regulations prescribed by the Secretary of Veterans Affairs
that are consistent with the regulations issued by the
Director of the Office of Personnel Management under
subsection (a).
(c) Temporary Adjustment.--Regulations issued under
subsection (a) or (b) may provide that statutory limitations
on the amount of such special rates may be temporarily raised
to a higher level during the transition period described in
section 4 ending on the first day of the first pay period
beginning on or after January 1, 2011, at which time any
special rate of pay in excess of the applicable limitation
shall be converted to a retained rate under section 5363 of
title 5, United States Code.
SEC. 4. TRANSITION SCHEDULE FOR LOCALITY-BASED COMPARABILITY
PAYMENTS.
Notwithstanding any other provision of this Act or section
5304 or 5304a of title 5, United States Code, in implementing
the amendments made by this Act, for each non-foreign area
determined under section 5941(b) of that title, the
applicable rate for the locality-based comparability
adjustment that is used in the computation required under
section 5941(c) of that title shall be adjusted effective on
the first day of the first pay period beginning on or after
January 1--
(1) in calendar year 2009, by using \1/3\ of the locality
pay percentage for the rest of United States locality pay
area;
(2) in calendar year 2010, by using \2/3\ of the otherwise
applicable comparability payment approved by the President
for each non-foreign area; and
(3) in calendar year 2011 and each subsequent year, by
using the full amount of the applicable comparability payment
approved by the President for each non-foreign area.
SEC. 5. SAVINGS PROVISION.
(a) Sense of Congress.--It is the sense of Congress that
the application of this Act to any employee should not result
in a decrease in the take home pay of that employee.
(b) Sense of Congress.--It is the sense of Congress that
the Bureau of Labor Statistics will conduct separate surveys
pursuant to the establishment by the President's Pay Agent of
1 new locality area for the entire State of Hawaii and 1 new
locality area for the entire state of Alaska, and that upon
the completion of the phase in period no employee shall
receive less than the Rest of the U.S. locality pay rate.
(c) Savings Provisions.--
(1) In general.--During the period described under section
4 of this Act, an employee paid a special rate under 5305 of
title 5, United States Code, who the day before the date of
enactment of this Act was eligible to receive a cost-of-
living allowance under section 5941 of title 5, United States
Code, and who continues to be officially stationed in an
allowance area, shall receive an increase in the employee's
special rate consistent with increases in the applicable
special rate schedule. For employees in allowance areas, the
minimum step rate for any grade of a special rate schedule
shall be increased at the time of an increase in the
applicable locality rate percentage for the allowance area by
not less than the dollar increase in the locality-based
comparability payment for a non-special rate employee at the
same minimum step provided under section 4 of this Act, and
corresponding increases shall be provided for all step rates
of the given pay range.
(2) Continuation of cost of living allowance rate.--If an
employee, who the day before the date of enactment of this
Act was eligible to receive a cost-of-living allowance under
section 5941 of title 5, United States Code, would receive a
rate of basic pay and applicable locality-based comparability
payment which is in excess of the maximum rate limitation set
under section 5304(g) of title 5, United States Code, for his
position (but for that maximum rate limitation) due to the
operation of this Act, the employee shall continue to receive
the cost-of-living allowance rate in effect on December 31,
2008 without adjustment until--
(A) the employee leaves the allowance area or pay system;
or
(B) the employee is entitled to receive basic pay
(including any applicable locality-based comparability
payment or similar supplement) at a higher rate,
but, when any such position becomes vacant, the pay of any
subsequent appointee thereto shall be fixed in the manner
provided by applicable law and regulation.
(3) Locality-based comparability payments.--Any employee
covered under paragraph (2) shall receive any applicable
locality-based comparability payment extended under section 4
of this Act which is not in excess of the maximum rate set
under section 5304(g) of title 5, United States Code, for his
position including any future increase to statutory pay caps
under 5318 of title 5, United States Code. Notwithstanding
paragraph (2), to the extent that an employee covered under
that paragraph receives any amount of locality-based
comparability payment, the cost-of-living allowance rate
under that paragraph shall be reduced accordingly, as
provided under section 5941(c)(2)(B) of title 5, United
States Code.
SEC. 6. APPLICATION TO OTHER ELIGIBLE EMPLOYEES.
(a) In General.--
(1) Definition.--In this subsection, the term ``covered
employee'' means--
(A) any employee who--
(i) on--
(I) the day before the date of enactment of this Act--
(aa) was eligible to be paid a cost-of-living allowance
under 5941 of title 5, United States Code; and
(bb) was not eligible to be paid locality-based
comparability payments under 5304 or 5304a of that title; or
(II) or after the date of enactment of this Act becomes
eligible to be paid a cost-of-living allowance under 5941 of
title 5, United States Code; and
(ii) except as provided under paragraph (2), is not covered
under--
(I) section 5941 of title 5, United States Code (as amended
by section 2 of this Act); and
(II) section 4 of this Act; or
(B) any employee who--
(i) on the day before the date of enactment of this Act--
(I) was eligible to be paid an allowance under section
1603(b) of title 10, United States Code;
(II) was eligible to be paid an allowance under section
1005(b) of title 39, United States Code; or
(III) was employed by the Transportation Security
Administration of the Department of Homeland Security and was
eligible to be paid an allowance based on section 5941 of
title 5, United States Code; or
(ii) on or after the date of enactment of this Act--
(I) becomes eligible to be paid an allowance under section
1603(b) of title 10, United States Code;
(II) becomes eligible to be paid an allowance under section
1005(b) of title 39, United States Code; or
(III) is employed by the Transportation Security
Administration of the Department of Homeland Security and
becomes eligible to be paid an allowance based on section
5941 of title 5, United States Code.
(2) Application to covered employees.--
(A) In general.--Notwithstanding any other provision of
law, for purposes of this Act (including the amendments made
by this Act) any covered employee shall be treated as an
employee to whom section 5941 of title
[[Page 23719]]
5, United States Code (as amended by section 2 of this Act),
and section 4 of this Act apply.
(B) Pay fixed by statute.--Pay to covered employees under
section 5304 or 5304a of title 5, United States Code, as a
result of the application of this Act shall be considered to
be fixed by statute.
(C) Performance appraisal system.--With respect to a
covered employee who is subject to a performance appraisal
system no part of pay attributable to locality-based
comparability payments as a result of the application of this
Act including section 5941 of title 5, United States Code (as
amended by section 2 of this Act), may be reduced on the
basis of the performance of that employee.
(b) Postal Employees in Non-Foreign Areas.--
(1) In general.--Section 1005(b) of title 39, United States
Code, is amended--
(A) by inserting ``(1)'' after ``(b)'';
(B) by striking ``Section 5941,'' and inserting ``Except as
provided under paragraph (2), section 5941'';
(C) by striking ``For purposes of such section,'' and
inserting ``Except as provided under paragraph (2), for
purposes of section 5941 of that title,''; and
(D) by adding at the end the following:
``(2) On and after the date of enactment of the Non-Foreign
Area Retirement Equity Assurance Act of 2008--
``(A) the provisions of that Act and section 5941 of title
5 shall apply to officers and employees covered by section
1003(b) and (c) whose duty station is in a nonforeign area;
and
``(B) with respect to officers and employees of the Postal
Service (other than those officers and employees described
under subparagraph (A)) section 6(b)(2) of that Act shall
apply.''.
(2) Continuation of cost of living allowance.--
(A) In general.--Notwithstanding any other provision of
this Act, any employee of the Postal Service (other than an
employee covered by section 1003 (b) and (c) of title 39,
United States Code, whose duty station is in a nonforeign
area) who is paid an allowance under section 1005(b) of that
title shall be treated for all purposes as if the provisions
of this Act (including the amendments made by this Act) had
not been enacted, except that the cost-of-living allowance
rate paid to that employee--
(i) may result in the allowance exceeding 25 percent of the
rate of basic pay of that employee; and
(ii) shall be the greater of--
(I) the cost-of-living allowance rate in effect on December
31, 2008 for the applicable area; or
(II) the applicable locality-based comparability pay
percentage under section 4.
(B) Rule of construction.--Nothing in this Act shall be
construed to--
(i) provide for an employee described under subparagraph
(A) to be a covered employee as defined under subsection (a);
or
(ii) authorize an employee described under subparagraph (A)
to file an election under section 7 of this Act.
SEC. 7. ELECTION OF ADDITIONAL BASIC PAY FOR ANNUITY
COMPUTATION BY EMPLOYEES.
(a) Definition.--In this section the term ``covered
employee'' means any employee--
(1) to whom section 4 applies;
(2) who is separated from service by reason of retirement
under chapter 83 or 84 of title 5, United States Code, during
the period of January 1, 2009, through December 31, 2011; and
(3) who files and election with the Office of Personnel
Management under subsection (b).
(b) Election.--
(1) In general.--An employee described under subsection (a)
(1) and (2) may file an election with the Office of Personnel
Management to be covered under this section.
(2) Deadline.--An election under this subsection may be
filed not later than December 31, 2011.
(c) Computation of Annuity.--
(1) In general.--Except as provided under paragraph (2),
for purposes of the computation of an annuity of a covered
employee any cost-of-living allowance under section 5941 of
title 5, United States Code, paid to that employee during the
first applicable pay period beginning on or after January 1,
2009 through the first applicable pay period ending on or
after December 31, 2011, shall be considered basic pay as
defined under section 8331(3) or 8401(4) of that title.
(2) Limitation.--The amount of the cost-of-living allowance
which may be considered basic pay under paragraph (1) may not
exceed the amount of the locality-based comparability
payments the employee would have received during that period
for the applicable pay area if the limitation under section 4
of this Act did not apply.
(d) Civil Service Retirement and Disability Retirement
Fund.--
(1) Employee contributions.--A covered employee shall pay
into the Civil Service Retirement and Disability Retirement
Fund--
(A) an amount equal to the difference between--
(i) employee contributions that would have been deducted
and withheld from pay under section 8334 or 8422 of title 5,
United States Code, during the period described under
subsection (c) of this section if that subsection had been in
effect during that period; and
(ii) employee contributions that were actually deducted and
withheld from pay under section 8334 or 8422 of title 5,
United States Code, during that period; and
(B) interest as prescribed under section 8334(e) of title
5, United States Code, based on the amount determined under
subparagraph (A).
(2) Agency contributions.--
(A) In general.--The employing agency of a covered employee
shall pay into the Civil Service Retirement and Disability
Retirement Fund an amount for applicable agency contributions
based on payments made under paragraph (1).
(B) Source.--Amounts paid under this paragraph shall be
contributed from the appropriation or fund used to pay the
employee.
(3) Regulations.--The Office of Personnel Management may
prescribe regulations to carry out this section.
SEC. 8. REGULATIONS.
(a) In General.--The Director of the Office of Personnel
Management shall prescribe regulations to carry out this Act,
including--
(1) rules for special rate employees described under
section 3;
(2) rules for adjusting rates of basic pay for employees in
pay systems administered by the Office of Personnel
Management when such employees are not entitled to locality-
based comparability payments under section 5304 of title 5,
United States Code, without regard to otherwise applicable
statutory pay limitations during the transition period
described in section 4 ending on the first day of the first
pay period beginning on or after January 1, 2011; and
(3) rules governing establishment and adjustment of saved
or retained rates for any employee whose rate of pay exceeds
applicable pay limitations on the first day of the first pay
period beginning on or after January 1, 2011.
(b) Other Pay Systems.--With the concurrence of the
Director of the Office of Personnel Management, the
administrator of a pay system not administered by the Office
of Personnel Management shall prescribe regulations to carry
out this Act with respect to employees in such pay system,
consistent with the regulations issued by the Office under
subsection (a).
SEC. 9. EFFECTIVE DATES.
(a) In General.--Except as provided by subsection (b), this
Act (including the amendments made by this Act) shall take
effect on the date of enactment of this Act.
(b) Locality Pay and Schedule.--The amendments made by
section 2 and the provisions of section 4 shall take effect
on the first day of the first applicable pay period beginning
on or after January 1, 2009.
____________________
MILITARY VOTING PROTECTION ACT OF 2008
Mr. DURBIN. Mr. President, I ask unanimous consent that the Committee
on Rules and Administration be discharged from further consideration of
S. 3073, and the Senate proceed to its immediate consideration.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will report the bill by title.
The legislative clerk read as follows:
A bill (S. 3073) to amend the Uniformed and Overseas
Citizens Absentee Voting Act to improve procedures for the
collection and delivery of absentee ballots of absent
overseas uniformed services voters, and for other purposes.
There being no objection, the Senate proceeded to consider the bill.
Mr. DURBIN. Mr. President, I ask unanimous consent that the Cornyn-
Feinstein substitute amendment at the desk be agreed to, the bill, as
amended, be read a third time and passed, the motions to reconsider be
laid upon the table, and any statements relating to the measure be
printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment (No. 5690) was agreed to, as follows:
(Purpose: In the nature of a substitute)
Strike all after the enacting clause and insert the
following:
SECTION 1. PROCEDURES FOR COLLECTION AND DELIVERY OF MARKED
ABSENTEE BALLOTS OF ABSENT OVERSEAS UNIFORMED
SERVICES VOTERS.
(a) Procedures.--
(1) In general.--The Uniformed and Overseas Citizens
Absentee Voting Act (42 U.S.C. 1973ff et seq.) is amended by
inserting after section 103 the following new section:
``SEC. 103A. PROCEDURES FOR COLLECTION AND DELIVERY OF MARKED
ABSENTEE BALLOTS OF ABSENT OVERSEAS UNIFORMED
SERVICES VOTERS.
``(a) Collection.--The Presidential designee shall
establish procedures for collecting marked absentee ballots
of absent overseas uniformed services voters in regularly
scheduled general elections for Federal office, including
absentee ballots prepared by States and Federal write-in
absentee ballots
[[Page 23720]]
prescribed under section 103, and for delivering the ballots
to the appropriate election officials.
``(b) Ensuring Delivery Prior to Closing of Polls.--
``(1) In general.--Under the procedures established under
this section, the Presidential designee shall ensure that any
marked absentee ballot for a regularly scheduled general
election for Federal office which is collected prior to the
deadline described in paragraph (3) is delivered to the
appropriate election official in a State prior to the time
established by the State for the closing of the polls on the
date of the election.
``(2) Contract with express mail providers.--
``(A) In general.--The Presidential designee shall carry
out this section by contract with one or more providers of
express mail services.
``(B) Special rule for voters in jurisdictions using post
office boxes for collection of marked absentee ballots.--In
the case of an absent uniformed services voter who wishes to
use the procedures established under this section and whose
marked absentee ballot is required by the appropriate
election official to be delivered to a post office box, the
Presidential designee shall enter into an agreement with the
United States Postal Service for the delivery of the ballot
to the election official under the procedures established
under this section.
``(3) Deadline described.--
``(A) In general.--Except as provided in subparagraph (B),
the deadline described in this paragraph is noon (in the
location in which the ballot is collected) on the last
Tuesday that precedes the date of the election.
``(B) Authority to establish alternative deadline for
certain locations.--If the Presidential designee determines
that the deadline described in subparagraph (A) is not
sufficient to ensure timely delivery of the ballot under
paragraph (1) with respect to a particular location because
of remoteness or other factors, the Presidential designee may
establish as an alternative deadline for that location the
latest date occurring prior to the deadline described in
subparagraph (A) which is sufficient to ensure timely
delivery of the ballot under paragraph (1).
``(4) Prohibition on refusal by states to accept marked
absentee ballots not delivered by postal service or in
person.--A State may not refuse to accept or process any
marked absentee ballot delivered under the procedures
established under this section on the grounds that the ballot
is received by the State other than through delivery by the
United States Postal Service.
``(c) Tracking Mechanism.--Under the procedures established
under this section, the entity responsible for delivering
marked absentee ballots to the appropriate election officials
shall implement procedures to enable any individual whose
ballot for a regularly scheduled general election for Federal
office is collected by the Presidential designee to determine
whether the ballot has been delivered to the appropriate
election official, using the Internet, an automated telephone
system, or such other methods as the entity may provide.
``(d) Absent Overseas Uniformed Services Voter Defined.--In
this section, the term `absent overseas uniformed services
voter' means an overseas voter described in section
107(5)(A).
``(e) Authorization of Appropriations.--There are
authorized to be appropriated to the Presidential designee
such sums as may be necessary to carry out this section.''.
(2) Effective date.--Section 103A of the Uniformed and
Overseas Citizens Absentee Voting Act, as added by this
subsection, shall apply with respect to each regularly
scheduled general election for Federal office held on or
after November 1, 2010.
(b) Conforming Amendments.--
(1) Federal responsibilities.--Section 101(b) of such Act
(42 U.S.C. 1973ff(b)) is amended--
(A) by striking ``and'' at the end of paragraph (6);
(B) by striking the period at the end of paragraph (7) and
inserting ``; and''; and
(C) by adding at the end the following new paragraph:
``(8) carry out section 103A with respect to the collection
and delivery of marked absentee ballots of absent overseas
uniformed services voters in elections for Federal office.''.
(2) State responsibilities.--Section 102(a) of such Act (42
U.S.C. 1973ff--1(a)) is amended--
(A) by striking ``and'' at the end of paragraph (4);
(B) by striking the period at the end of paragraph (5) and
inserting ``; and''; and
(C) by adding at the end the following new paragraph:
``(6) carry out section 103A(b)(2) with respect to the
processing and acceptance of marked absentee ballots of
absent overseas uniformed services voters.''.
(c) Outreach for Absent Overseas Uniformed Services Voters
on Procedures.--The Presidential designee shall take
appropriate actions to inform individuals who are anticipated
to be absent overseas uniformed services voters in the
regularly scheduled general election for Federal office held
in November 2008 of the procedures for the collection and
delivery of marked absentee ballots established pursuant to
section 103A of the Uniformed and Overseas Citizens Absentee
Voting Act, as added by subsection (a), including the manner
in which such voters may utilize such procedures for the
submittal of marked absentee ballots in regularly scheduled
elections for Federal office.
(d) Reports on Utilization of Procedures.--
(1) Reports required.--Not later than 180 days after each
regularly scheduled general election for Federal office held
after January 1, 2008, the Presidential designee shall submit
to the congressional defense committees a report on the
utilization of the procedures for the collection and delivery
of marked absentee ballots established pursuant to section
103A of the Uniformed and Overseas Citizens Absentee Voting
Act, as so added, during such general election.
(2) Elements.--Each report under paragraph (1) shall
include, for the general election covered by such report, a
description of the utilization of the procedures described in
that paragraph during such general election, including the
number of marked absentee ballots collected and delivered
under such procedures.
(e) Report on Status of Implementation.--
(1) Report required.--Not later than one year after the
date of the enactment of this Act, the Presidential designee
shall submit to the congressional defense committees a report
on the status of the implementation of the program for the
collection and delivery of marked absentee ballots
established pursuant to section 103A of the Uniformed and
Overseas Citizens Absentee Voting Act, as added by subsection
(a).
(2) Elements.--The report under paragraph (1) shall include
a status of the implementation of the program and a detailed
description of the specific steps taken towards its
implementation for November 2009 and November 2010.
(f) Definitions.--In this section:
(1) The term ``absent overseas uniformed services voter''
has the meaning given that term in section 103A(d) of the
Uniformed and Overseas Citizens Absentee Voting Act, as added
by subsection (a).
(2) The term ``Presidential designee'' means the official
designated under section 101(a) of the Uniformed and Overseas
Citizens Absentee Voting Act (42 U.S.C. 1973ff(a)).
(3) The term ``congressional defense committees'' means--
(A) the Committee on Armed Services and the Committee on
Appropriations of the Senate; and
(B) the Committee on Armed Services and the Committee on
Appropriations of the House of Representatives.
SEC. 2. PROHIBITION ON REFUSAL TO ACCEPT VOTER REGISTRATION
AND ABSENTEE BALLOT APPLICATIONS AND FEDERAL
WRITE-IN ABSENTEE BALLOTS FOR FAILURE TO MEET
NONESSENTIAL REQUIREMENTS.
(a) Voter Registration and Absentee Ballot Applications.--
(1) Prohibiting refusal to accept applications for failure
to meet nonessential requirements.--Section 102 of the
Uniformed and Overseas Citizens Absentee Voting Act (42
U.S.C. 1973ff-1) is amended by adding at the end the
following new subsection:
``(e) Prohibiting Refusal To Accept Applications for
Failure To Meet Nonessential Requirements.--A State shall
accept and process any otherwise valid voter registration
application or absentee ballot application (including the
official post card form prescribed under section 101)
submitted in any manner by an absent uniformed services voter
or overseas voter that contains the information required on
the official post card form prescribed under section 101
(other than information which the Presidential designee, in
consultation with the Election Assistance Commission and the
Election Assistance Commission Board of Advisors under
section 214 of the Help America Vote Act of 2002 (42 U.S.C.
15344), determines, under regulations promulgated by the
Presidential designee, is not clearly necessary to prevent
fraud in the conduct of elections).''.
(2) Effective date.--Subsection (e) of section 102 of the
Uniformed and Overseas Citizens Absentee Voting Act, as added
by this subsection, shall apply with respect to each
regularly scheduled general election for Federal office held
on or after November 1, 2010.
(b) Federal Write-in Absentee Ballot.--
(1) Prohibiting refusal to accept ballot for failure to
meet nonessential requirements.--Section 103 of such Act (42
U.S.C. 1973ff-2) is amended--
(A) by redesignating subsection (f) as subsection (g); and
(B) by inserting after subsection (e) the following new
subsection:
``(f) Prohibiting Refusal To Accept Ballot for Failure To
Meet Nonessential Requirements.--A State shall accept and
process any otherwise valid Federal write-in absentee ballot
submitted in any manner by an absent uniformed services voter
or overseas voter that contains the information required to
be submitted with such ballot by the Presidential designee
(other than information which the Presidential designee, in
consultation with the Election Assistance Commission and the
Election Assistance Commission Board of Advisors under
section 214 of the
[[Page 23721]]
Help America Vote Act of 2002 (42 U.S.C. 15344), determines,
under regulations promulgated by the Presidential designee,
is not clearly necessary to prevent fraud in the conduct of
elections).''.
(2) Effective date.--Subsection (f) of section 102 of the
Uniformed and Overseas Citizens Absentee Voting Act, as
amended by this subsection, shall apply with respect to each
regularly scheduled general election for Federal office held
on or after November 1, 2010.
The bill (S. 3073), as amended, was ordered to be engrossed for a
third reading, was read the third time, and passed.
____________________
NAVAL VESSEL TRANSFER ACT OF 2008
Mr. DURBIN. Mr. President, I ask unanimous consent that the Senate
proceed to the immediate consideration of H.R. 7177 which is at the
desk.
The PRESIDING OFFICER. The clerk will report the bill by title.
The legislative clerk read as follows:
A bill (H.R. 7177) to authorize the transfer of naval
vessels to certain foreign recipients, and for other
purposes.
There being no objection, the Senate proceeded to consider the bill.
Mr. DURBIN. Mr. President, I ask unanimous consent that the bill be
read three times and passed, the motions to reconsider be laid upon the
table with no intervening action or debate, and that any statements
relating to this measure be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
The bill (H.R. 7177) was ordered to a third reading, read the third
time, and passed.
____________________
STEPHANIE TUBBS JONES GIFT OF LIFE MEDAL ACT OF 2008
Mr. DURBIN. Mr. President, I ask unanimous consent that the Senate
proceed to the immediate consideration of H.R. 7198 which was received
from the House.
The PRESIDING OFFICER. The clerk will report the bill by title.
The legislative clerk read as follows:
A bill (H.R. 7198) to establish the Stephanie Tubbs Jones
Gift of Life Medal for organ donors and the family of organ
donors.
There being no objection, the Senate proceeded to consider the bill.
Mr. DURBIN. Mr. President, I ask unanimous consent that the bill be
read three times and passed, the motions to reconsider be laid upon the
table with no intervening action or debate, and that any statements
related to the bill be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
The bill (H.R. 7198) was ordered to a third reading, read the third
time, and passed.
____________________
ORDERS FOR THURSDAY, OCTOBER 2, 2008
Mr. DURBIN. Mr. President, I ask unanimous consent that when the
Senate completes its business today, it stand in recess until 10 a.m.
on Thursday, October 2; that following the prayer and pledge, the
Journal of proceedings be approved to date, the time for the two
leaders be reserved for their use later in the day, and that the Senate
then proceed to a period of morning business, with Senators permitted
to speak for up to 10 minutes each.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
____________________
RECESS UNTIL 10 A.M. TOMORROW
Mr. DURBIN. Mr. President, if there is no further business to come
before the Senate, I ask unanimous consent that it stand in recess
under the previous order.
There being no objection, the Senate, at 9:56 p.m., recessed until
Thursday, October 2, 2008, at 10 a.m.
____________________
NOMINATIONS
Executive nominations received by the Senate:
DEPARTMENT OF HOMELAND SECURITY
JONATHAN R. SCHARFEN, OF VIRGINIA, TO BE DIRECTOR OF THE
UNITED STATES CITIZENSHIP AND IMMIGRATION SERVICES,
DEPARTMENT OF HOMELAND SECURITY, VICE EMILIO T. GONZALEZ.
NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION
SUBJECT TO QUALIFICATIONS PROVIDED BY LAW, THE FOLLOWING
FOR PERMANENT APPOINTMENT TO THE GRADE INDICATED IN THE
NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION:
To be lieutenant (junior grade)
KYLE W. RYAN
OLIVER E. BROWN
To be ensign
GREGORY R. SCHWEITZER
JOHN H. PETERSEN
BENJAMIN S. BLOSS
JOHN F. ROSSI
CHARLENE R. FELKLEY
EMILY M. ROSE
KEVIN W. ADAMS
MATTHEW M. FORNEY
PATRICIA E. RAYMOND
MATTHEW J. NARDI
ADAM R. REED
ADRIENNE L. HOPPER
RACHEL M. SARGENT
JONATHAN E. OWEN
RYAN A. WARTICK
SUBJECT TO QUALIFICATIONS PROVIDED BY LAW, THE FOLLOWING
FOR PERMANENT APPOINTMENT TO THE GRADE INDICATED IN THE
NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION:
To be lieutenant (junior grade)
ANDREW R. COLEGROVE
ANNA-ELIZABETH B. VILLARD-HOWE
NICHOLAS C. MORGAN
JEFFREY G. PEREIRA
COLIN T. KLIEWER
HAROLD B EMMONS III
PAUL M. CHAMBERLAIN
MICHAEL W. O'NEAL
JULIE L. EARP
KYLE A. BYERS
LOREN M. EVORY
ANDREW J. OSTAPENKO
LAURA T. GALLANT
GREGORY R. SCHWEITZER
MARK S. ANDREWS
MEGAN R. GUBERSKI
NATHAN E. WITHERLY
CHRISTINE L. SCHULTZ
CLAIRE V. SURREY
RONALD L MOYERS, JR.
BRIAN D. PRESTCOTT
GLEN A. RICE
PATRICK M. REDMOND
RUSSELL A. QUINTERO
NATHAN B. PARKER
JONATHAN R. HEESCH
MATTHEW C. GRIFFIN
FAITH C. OPATRNY
PUBLIC HEALTH SERVICE
THE FOLLOWING CANDIDATES FOR PERSONNEL ACTION IN THE
REGULAR CORPS OF THE COMMISSIONED CORPS OF THE U.S. PUBLIC
HEALTH SERVICE SUBJECT TO QUALIFICATIONS THEREFORE AS
PROVIDED BY LAW AND REGULATIONS:
To be medical director
MATTHEW T. MCKENNA
ZACHARY TAYLOR III
To be senior surgeon
TIMOTHY R. COTE
JULIETTE MORGAN
To be surgeon
HENRY C. BAGGETT III
EDWARD C. DOO
PAUL D. HEIDERSCHEIDT
JOHN T. REDD
JOSEPH P. SIMON
To be senior assistant surgeon
SCOTT J. FILLER
MONIQUE R. FOUNTAIN
ANA I. GUZMAN
KAREN C. LEE
LORI A. POLLACK
JAMES J. SEJVAR
MICHAEL C. THIGPEN
To be senior dental surgeon
SEYED H. MORTAZAVI
To be dental surgeon
JUAN K. PACKER
PHILLIP A. WILSON
PAUL A. WONG
To be senior assistant dental surgeon
JODINE C. ANDERSON
CAROL L. MCDANIEL
To be nurse director
HOLLY A. WILLIAMS
To be senior nurse officer
ANN M. McCARTHY
To be nurse officer
KRISTAL E. DYE
SUSAN E. ERWIN
MARTIN A. FOREMAN
BRANT B. GOODE
VERONICA M. GORDON
JERRI L. MCGINNIS
DOROTHY R. MERCHANT
ELVIRA D. MOSELY
REBECCA S. NOE
ARLENE M. PATUC
CAROLYN R. STACY-WILKIN
DEBRA TUBBS
To be senior assistant nurse officer
ANNE M. ARCEO
HELEN E. BALLANTYNE
DEMETRIUS CHAPMAN
SUMMER A. CUTTING
DAN FLETCHER III
MELISSA A. GEORGE
SHAWNA L. HUTCHINS
DEBORAH N. LAMPING
To be engineer officer
JEFFREY A. MURRAY
To be senior assistant engineer officer
VARSHA B. SAVALIA
To be scientist
David J. McIntyre
DANISHA L. ROBBINS
To be senior environmental health officer
PAUL M. LEWIS
To be environmental health officer
BRIAN L. LEWELLING
MATHEW J. THOMAS
JOHN T. WHITESIDES
To be senior assistant environmental health officer
JEFFREY T. DICKSON
MOLLY E. PATTON
To be pharmacist
STEVEN A. LABROZZI
[[Page 23722]]
JUDY L. ROSE
JAMIE L. SHADDON
To be senior assistant pharmacist
KRISTINA J. BALLINGER
JEFFERSON FREDY
KATIE E. JOHNSON
RANDI R. LANIER
JEFFREY J. MALLETTE
LORI B. MOORE
ALLISON M. PAYNTER
VINCENT S. SANSONE
COURTNEY M. SUGGS
JUDITH B. THOMPSON
LEO B. ZADECKY
To be senior assistant therapist
JAMES M. COWHER
To be health services officer director
CLIFFORD D. BROWN
To be health services officer
IRWIN W. FISH
To be senior assistant health services officer
JULIA H. BRYAN
ALNISSA T. CARTER
MICHAEL C. CLAY
MARTHA S. FERMIN
LORI A. GOODMAN
RACHAEL TRIMPERT SCHMIDT
CAMERON C. SCOTT
MICHAEL R. TILUS
EMILY J. WILLIAMS
To be junior assistant health services officer
KRISTI R. ANDERSON
KEREN ARKIN
SARAH E. COLEMAN
MATTHEW R. DAAB
JAMES C. DECKER
DIMANA DIMITROVA
ELIZABETH A. FRANKLIN
DAVID M. GIANFERANTE
MARILOU GONZALEZ
REBECCA HARDY
AMY J. HATCHER
SARA A. KIERPIEC
TINA PATTARATORNKOSOHN
JEFFREY R. STRICH
XI HUA YANG
JOHN I. YOUNG
[[Page 23723]]
EXTENSIONS OF REMARKS
SENATE COMMITTEE MEETINGS
Title IV of Senate Resolution 4, agreed to by the Senate on February
4, 1977, calls for establishment of a system for a computerized
schedule of all meetings and hearings of Senate committees,
subcommittees, joint committees, and committees of conference. This
title requires all such committees to notify the Office of the Senate
Daily Digest--designated by the Rules Committee--of the time, place,
and purpose of the meetings, when scheduled, and any cancellations or
changes in the meetings as they occur.
As an additional procedure along with the computerization of this
information, the Office of the Senate Daily Digest will prepare this
information for printing in the Extensions of Remarks section of the
Congressional Record on Monday and Wednesday of each week.
Meetings scheduled for Thursday, October 2, 2008 may be found in the
Daily Digest of today's Record.
MEETINGS SCHEDULED
OCTOBER 3
9:30 a.m.
Joint Economic Committee
To hold hearings to examine the employment situation in
September 2008.
SD-106