Kit Bond

Mr. BOND

Mr. BOND. Madam President, I ask unanimous consent to add the Senator from Wyoming, Senator Barrasso, as a cosponsor of the amendment No. 4985.

Mr. BOND. Madam President, to begin, I think I should make some general comments about my concern and about my ability to work with the distinguished chairman of the committee on affordable housing programs. We have worked a long time on these programs together, and he and I, together, pushed for $180 million for counseling for families facing foreclosure. We have gotten that passed. I have been out and talked with the people who are victims, the people who are helping them, the local officials, and that is working. Based on what I learned from talking to the people who are suffering from this foreclosure epidemic and from the real problems in the subprime market caused by predatory lending, which the Senator from Maryland, Ms. Mikulski, and I tried to get HUD to stop a few years ago, we came up with a solution. That solution I offered on the floor: the Security Against Foreclosure and Education Act, the SAFE Act, most of which was incorporated in the housing bill we passed in April. I believe those things went at this problem in the right way. We understand there is a problem. What I am saying is I fear that taxing GSEs or taking money, expropriating money from GSEs and setting up this HOPE Now Program is a false hope because FHA can't manage it, and they are likely to have a tremendous impact, No. 1, potentially on the housing budget coming out of the taxpayers' pockets. We don't have enough money to pay for all the things we need to do for public and assisted housing. The SAFE Act said reform FHASecure so it could work for somebody who had missed a payment or two, lower the GSE's capital requirement so they could lower this capital housing program; also, provide $10 billion of authorization for State housing finance agencies to raise additional funds to refinance these mortgages which are in default. That, I believe, is the best way to do it. That is why I am very much concerned that we are going down the wrong road, trying to put a burden on the FHA to do something they are not up to. I am afraid the HOPE Program is a false hope for 130,000 families who will enter the program and then default and face foreclosure. The hope is the FHA will somehow be able to dispose properly of those 130,000 homes while they are trying to manage their portfolio. Experience shows that will not work. No matter what kind of board you set up, FHA cannot take on all those additional responsibilities. This program is far more likely to result in a huge bailout for lenders, while protecting a very limited number of homeowners. The Congressional Budget Office--hear this: the Congressional Budget Office estimates that under this program, mortgage holders would have an incentive to direct their highest risk loans to the program. They estimate the cumulative default rate of the HOPE Program would be 35 percent--one out of three--worst of the worst loans and FHA would get them. Where would they get them? From companies that have been a part of the problem. According to the Wall Street Journal, Countrywide issued $167 billion--Countrywide Financial, $167 billion. They had 11 percent of the subprime market and now, according to the Wall Street Journal, they have $30 billion of it, either in their own foreclosures or for those they have offered a guarantee. So there is $30 billion of bad loans on which Countrywide is at risk, and this program could be used to refinance all those programs. If a lender or a holder was facing foreclosure and knew he had to go to foreclosure, it calculates the cost of foreclosure and takes some of that off the value of the home and refinances that value and hands it off to FHA, and FHA gets stuck--gets stuck with it. The FHA has shown they cannot manage and implement the existing loan activities. You can read the lengthy IG reports, the GAO reports. Anybody who has looked at the FHA said they can't handle the job now. They have expanded from 2 percent to 6 percent of the market, and they can't even handle that additional level now. The head of the FHA said this could be a tremendous burden on his agency and potentially on the taxpayers. If FHA is ultimately held at risk for these, they could be in a position where money that would otherwise go to support Section 8 vouchers or public housing operating or capital subsidies would have to be diverted to FHA to pay back the worst of the worst loans--according to CBO--the worst of the worst loans that would be pawned off on the FHA. Nobody cares more than I about dealing with and providing as much help as possible to those people who are unfortunately facing foreclosure, perhaps because of lack of information or even misinformation that was given them about the loans into which they entered and the change in the market which caught them unaware, such as the situation I discussed earlier today of Mr. Willie Clay, the Vietnam veteran who found his mortgage rate readjusting 50 percent higher, which would throw him out of the house. He had an 8.2 percent rate and it was going to go up to over 12 percent. He needs help. These people need help. But bailing--let us bail out the people who are in trouble through the housing--State housing finance agencies or FHASecure; don't have FHA set up to take the fall with the worst of the worst loans from lenders, some of whom may have been ones who put us in the problem. I urge the support of my two amendments and I yield the floor and reserve the balance of my time.

Mr. BOND. The next amendment I offer, No. 4987, was designed to protect potential home buyers with additional mortgage loan disclosure requirements. I explained and discussed this amendment with the two leaders of the Banking Committee when we had the previous measure on the floor. I think the disclosure requirements were widely agreed to on both sides of the aisle, but due to the procedural situation at the time it was not accepted. This amendment would protect consumers considering complicated and potentially unaffordable mortgage loan terms by requiring a clear and simple disclosure of payments and interest rates for adjustable rate loans with so-called teaser rates. These teaser loans, with interest rates and payments that jump up to unaffordable levels, played a large role in our current subprime mortgage crisis. Many potential borrowers either did not understand what they were getting into or were falsely assured everything would be OK. As part of bringing relief to families and neighborhoods suffering through the housing crisis, I wish to ensure we do not face another crisis in the future because we did not correct the problem. I have spent a good bit of time in Missouri, talking with homeowners facing foreclosure. The local government agencies, mayors, councilmen, aldermen, the advocacy groups, and the very effective counseling programs such as NeighborWorks and others who are assisting homeowners and are working on counseling those in foreclosure, but they also came back and unanimously said we have to have better information for the potential buyer before they get into it. Making sure potential buyers know the costs and do not fall into a trap that can lead to a disaster for them and serious impacts on the communities is very important. If you have ever taken out a mortgage loan to buy or refinance a home or get a home equity line of credit, you are confronted with piles and piles of paperwork and legal jargon. I have had the pleasure of getting three new loans in the last 5 years from a local banker who doesn't do subprime. Each time I have gone through the disclosure requirements on closing. There is a stack of paper, several inches thick, that is written in legal jargon. I used to be a lawyer. While I can read those documents, I can assure you they are not easy to understand for somebody who is not an expert in the area. I assume I am similar to most homeowners who cannot read through all the legal gobbledygook and wouldn't find it particularly edifying if they did. When low-income homeowners who have fallen into problems responded to my question about why they didn't ask questions, they were met with: ``Don't worry about that,'' or ``We'll fix that later.'' I can assure you, those things do not get fixed quietly after you sign the papers. Congress passed the original Truth in Lending Act and applied it to mortgage loans. We knew then most people do not take the time or have the ability to read and understand the fine print of mortgage loan documents. However, the protections in the Truth in Lending Act were written long ago and are now woefully outdated. They were written when most everyone took a 30-year fixed loan. There are many more loan tools to help people share in the dream of home ownership. There are adjustable rate mortgages; adjustable rate mortgages with initial fixed terms, sometimes called teasers; prepayment penalties and refinancing options, quicker and easier than ever before but not fully understood. More choices are a good thing, but uneducated consumers who do not understand the choices and therefore do not understand what they are committing to is a bad thing. I mentioned on the floor at length the story of Willie Clay, of Kansas City, MO. Willie Clay is a Vietnam war paratrooper living largely on disability payments. Willie lives in a working-class Kansas City neighborhood of modest ranch homes called Ruskin Heights. Willie refinanced his mortgage in 2004 for a total of $101,000. As you can see from the size of that loan, Willie is a man of modest means. He was not a speculator gambling on the housing market. He was not an investor buying a vacation rental home. Like so many other Americans, Willie was just looking for a little extra money to pay-off his medical bills, car loan and some credit cards. Willie agreed to a subprime adjustable rate loan with an initial fixed rate of 8.2 percent. For several years, everything went fine for Willie. He made his payments and honored his agreement. Then last October, the initial fixed rate ended and the loan reset to a variable rate. His new interest rate became 11.2 percent, and then was set to rise again in March to 12.2 percent, with more rises coming. Willie told the Star, ``If the rate goes up again, I can't afford it.'' Willie and his wife Ina would have to give up their home and move into an apartment. Willie now admits that he never fully understood how an adjustable rate worked when he agreed to the new loan. ``I didn't have the education to understand it,'' Willie said, ``and they didn't explain it to me. I thought if the interest [rate] went down, your payment went down. If the interest rate went up, your payment stayed the same.'' Willie was now facing mortgage payments 50 percent higher than when he started. Willie was also trapped in his loan because of a $2,500 prepayment penalty. This is not just a family crisis. Willie's entire neighborhood suffered through this housing crisis. At one time, there were more than 500 foreclosures in his Zip Code alone. On Willie's block, there were several empty houses. Foreclosed homes are driving property values down for everyone. It becomes a self- perpetuating downward spiral. That is why we need to help these people. My amendment will apply to adjustable rate mortgages with an initial fixed or ``teaser'' rate. This is the kind of loan Mr. Clay had and millions of other Americans have. For these types of loans with teasers, lenders or brokers will be required to provide in large, prominent type the loan's fixed interest rate, the initial fixed payment, and the date on which the fixed rate will expire. The lender or broker will also need to provide an estimate of what the payment will be when the loan resets from its initial teaser rate to a floating adjustable rate. For many subprime borrowers, this jump could be quite large, and the borrowers need to be aware of it. We would also require lenders to disclose that there is no guarantee that the loan can be refinanced before the initial fixed rate expires. That caught a lot of borrowers who knew the terms of their loan could go up after the teaser rate expired, potentially to unaffordable levels. But any concern they had that they could not afford their loan in the future was put to rest by personal assurances by a broker that there would be no problem refinancing the loan before the teaser rate expired. For many, this turned out to be true, but when the credit market seized up and the loan standards were raised, they were caught in an impossible situation. This amendment requires a disclosure that there is no guarantee that the borrower will be able to refinance a loan before the teaser rate expires. The amendment also requires the disclosure of any prepayment penalty, the amount, and the expiration date. This prepayment penalty caught families like the Clays, trapping them in a bad situation. While prepayment penalties can be good, giving certainty to the lender, who can in turn provide a lower interest rate, people need to be aware of what they are getting into. That is the theme of the entire amendment. It does not block adjustable rates, it does not block initial fixed rates. It allows prepayment penalties. These advances in the mortgage business have been good for consumers, but it just requires full disclosure. Brokers and lenders did not do enough to disclose to and educate consumers. Mr. President, I call up amendment No. 4987 to protect potential home buyers with additional requirements.

Mr. BOND. Mr. President, I thank the leaders of this effort, my good friends, Senators Dodd and Shelby, for their hard work and their efforts to address the housing crisis and the need to reform regulatory oversight of the government-sponsored enterprises, Fannie Mae, Freddie Mack, and the Federal Home Loan Banks, and reforming FHA. These are clearly needed. They are long overdue. I am happy to support them. In addition, there is clearly a role and a need for the Government to address the current housing crisis. I have supported and led various efforts in the SAFE Act--Security Against Foreclosure and Education Act--that I introduced in March. That had additional housing counseling, improved disclosure and transparency in the home-buying process, and strong enforcement actions against predatory lending. These were essentially included in the bipartisan measure this Senate passed early in April. But I have grave concerns about some aspects of H.R. 3221, the Housing and Economic Recovery Act of 2008. I filed three amendments to that bill today that I hope we will be able to discuss thoroughly and act upon. It is a fundamental principle that the Congress does not create programs that perpetuate or reward the behavior that led to the housing crisis or damage the key agencies that play a key role in stabilizing the housing market. Unfortunately, this legislation before us today goes against that principle. Specifically, I am gravely concerned about the proposed expansion of the Department of Housing and Urban Development's--HUD--Federal Housing Administration--FHA--contained in this bill. The proposed creation of a new FHA program called the HOPE for Homeowners loan program would allow certain at-risk borrowers to refinance their mortgages and authorize FHA to guarantee up to $300 billion in new loans. The program would allow lenders and borrowers to refinance voluntarily their mortgage loans into a new FHA-insured loan at a significantly reduced loan level with lenders agreeing to write off these reductions as losses. According to the Congressional Budget Office's review of the HOPE for Homeowners loan program, about 400,000 loans would voluntarily participate in this program, which would require about $68 billion in loan commitment authority. CBO projects that about 2.2 million borrowers of subprime and alt-A loans will face foreclosure proceedings during the next three years. Based on a comparison of these numbers, the expected reach of this program will be significantly limited in assisting of homeowners who are expected to face foreclosure. While I would like to keep as many homeowners in their homes as possible, this strategy is more likely to result in a huge bailout for lenders while protecting a very limited number of homeowners. In particular, CBO estimates that under this program, ``mortgage holders would have an incentive to direct their highest-risk loans to the program.'' For a modest write-off, lenders who were, in a number of cases, either fraudulent or negligent in their treatment of borrowers, will be able to clear out many of their problem loans. At the same time, CBO estimates that the cumulative default rate for the HOPE program would be 35 percent--meaning that one out of every three loans refinanced would fail. Frankly, creating a new Federal program that takes on the worst of the worst subprime loans, which will hurt FHA is extremely troubling. The Senate bill pays for to the new FHA HOPE program from GSE assessments. This offset potentially avoids the need for funds from the Treasury to cover the losses as required under the Federal Credit Reform Act. However, whether the costs for the HOPE program would be paid by proceeds from the GSEs or from direct appropriations, it does not change the nature of this program--it is a bailout. As a former member of the Senate Banking Committee and current longtime member of the Senate Appropriations subcommittee with jurisdiction over FHA, I have held a strong and long-time interest on housing and finance issues. A major lesson learned from my work on both the authorizing and appropriating committees is that FHA is significantly limited in managing and implementing its loan activities due to longstanding management and resource challenges. Let me emphasize that point. FHA is significantly limited in managing and implementing its loan activities due to long standing management and resource challenges. They do not have the people and the people are not adequate to the task in too many cases. FHA's challenges have been well-documented by the HUD Inspector General and Government Accountability Office for several years, which has been heard through numerous congressional hearings. All my colleagues who wish access to that information can have it. It also is troubling to me that we are burdening FHA at a time when they are playing a growing role in assisting distressed homeowners. I have heard that FHA's market share has grown tremendously from about 2 percent to as high as 8 percent. To add 400,000 of the worst of the worst new loans to FHA's portfolio at this time is potentially creating a perfect storm for failure. Any collapse in FHA will be borne by the American taxpayer and future appropriations bills, potentially at the expense of other housing programs. It is my belief that the FHA HOPE proposal takes the Government and the taxpayers down a dangerous and risky path, which may worsen the housing problem for borrowers it aims to address. Further, when taking into account the longstanding management and financial challenges of FHA, the expectations being created by the new FHA HOPE program are unrealistic. Amendment No. 4985 to Amendment No. 4983 For those reasons I offer an amendment, No. 4985, to strike title IV of division A, which establishes the HOPE program. I recognize this program is a part of a delicate compromise, but it is too troubling and risky for the American taxpayer. Therefore, I call up amendment No. 4985.

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

Mr. BOND. Mr. President, I unanimous consent to set that amendment aside so I may offer another amendment.

Mr. BOND. Mr. President, I ask unanimous consent that the pending amendment be set aside.

Mr. BOND. This final amendment limits the responsibility of Fannie Mae and Freddie Mac for housing entities that receive funding from the Affordable Housing Trust Fund created under the bill. The amendment prohibits the trust fund to be used for soft program costs to ensure that any of these funds be used for bricks and mortar. It is very simple. I can read the whole thing. It says: Notwithstanding any other provision of the law, Fannie Mae and Freddie Mac shall not be responsible for any payments either directly or indirectly to other housing entities under the Affordable Housing programs unless these GSEs voluntarily provide funding. None of these funds shall be used for soft program costs, including staff costs. In essence, it is a very simple amendment. My concern is that, regardless of what one thinks about the GSEs, it is, I believe, unprecedented for Congress to step in and say: You are a partially privately owned, shareholder-owned entity, and you shall be paying a tax that we determine to a group of other entities over which you have no control. People may like or dislike or want to reform the GSEs. But there are a lot of other GSEs. Are we going to go around and start telling Sallie Mae, for example: You have to fund various of these education programs. There are other quasi-governmental agencies that I think would be very much concerned if Congress started the practice of taking these entities and telling them where they have to spend their funds. This is a backdoor way of avoiding the honest and straightforward provision of either raising the money through taxes or providing other revenue of the Federal Government. I hope my colleagues will consider all three of these amendments. I look forward to discussing them when the time is appropriate. I thank the manager for allowing me to raise these. I call up Amendment No. 4986.

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

Mr. BOND. Madam President, to clarify, amendment No. 4986 relates to the affordable housing trust fund. I have a minor modification. I have asked both sides if they would accept it. I ask unanimous consent to so modify the amendment, and I send the modification to the desk.

Mr. BOND. Amendment No. 4986.

Mr. BOND. Madam President, then I will withdraw my request until my colleague has had an opportunity to look at it.

Mr. BOND. Let me explain briefly that we added one sentence to a two- sentence amendment saying, in essence, that it will not affect the GSEs, existing affordable housing programs. Those are programs already in effect. There was some question about whether they would be affected. The amendment makes clear what was implied. I expect that one will find no change in it. In any event, that is not the point. The point is to remove the tax the Banking Committee provided, which is a tax on GSEs which, without any input or other involvement, would pay support for a whole range of groups. There are many groups, such as ACORN and others who build low-income housing. Who knows, it might even be Habitat for Humanity. But they would be able to use these funds to provide soft costs to support the programs and other related costs. Fannie Mae and Freddie Mac should be able to continue to use their existing affordable housing program that they administer, that they were set up to do, and not have their funds taken away to fund another program over which they have no control, no responsibility. There is absolutely no reason to tax these entities to support housing groups which may or may not be responsible or capable of administering good housing programs. There will also be additional economic risks to Fannie and Freddie, depending on the use of these funds and the quality of the groups which receive these funds. More critical is the unprecedented approach that requires the GSEs to pay a tax for something for which they have no responsibility. Let me be clear, the GSEs have a mission. They have a very important mission. When we initially talked about this program, we talked about giving them more authority to go in and help in these situations. Statements made on the other side that we are going to cut off all funding and all assistance to homeowners in distress are absolutely irresponsible and totally without basis. We provided and I believe this body adopted some good ideas--I will speak about those in a minute--in previous bills on how we deal with the housing crisis. But right now what we are saying is, let's stop this. This is saying to the GSEs, you may have some excess left over after you have carried out your affordable housing mission. We want to come in and take it away from you and spend it someplace else. Let's be clear, this is not saying to the entities that we want you to do your mission. We are saying we are going to take away money that you put into your mission. We are saying, forget your mission. We are going to take some of your revenue raised in part from capital markets where private sector shareholders have their retirement funds, their annuities, or their investments in those companies, hoping and expecting to share in the revenue. That may be pension funds, retirement funds, endowment funds that are counting on getting some of that revenue. Oh, excuse me, even though the GSE has carried out the mission that we asked of it and generated some ``excess'' revenue that might be distributed to those people who put up capital in the GSEs, we are going to take it away. How long before this body decides to go to other GSEs, such as Sallie Mae, and say: We have a better idea. We are going to take any revenue you make and we are going to put it someplace else? Or to utilities and say: You are regulated, and you may have some excess money left over that you wish to return to your shareholders, but since you are regulated, since you have a government franchise to provide utility service, we are going to take some of your revenue and put it elsewhere? To me that is an unconscionable grab. It offers a precedent that is very dangerous for this body, to be taking funds from one entity and transferring it to another entity by fiat. It is discriminatory, and it has the potential to have a significant impact on the people who have put their money into these funds. I ask again if my colleagues have had an opportunity to review the modification as sent forward?

Mr. BOND. I thank the Chair and yield the floor.

Mr. BOND. Madam President, a couple of months ago, we passed a good bill to say we would authorize $10 million for State housing finance agencies to help refinance homes where the owners were facing foreclosure. A good approach. This is a disastrous approach. CBO has said that the lenders--the people, some of whom made some of the bad loans in the first place--will dump the worst of their worst loans on FHA. Last week, FHA, floundering under existing portfolio losses, announced $4.6 billion in losses, 22 percent of their reserves, raising questions about their ability to maintain solvency. FHA can't do it. Thirty-five percent of the loans under the HOPE for Homeowners have been bad. The defaults would hurt the FHA. This provision would allow lenders such as Countrywide Financial, which had 11 percent of the subprime market, and according to the papers has $30 billion of the worst loans, to dump those on the FHA. I urge support of the amendment.

Mr. BOND. Madam President, I move to waive the applicable points of order of the Congressional Budget Act with respect to the amendment, and I ask for the yeas and nays.

Mr. BOND

Mr. BOND. Madam President, there is no doubt that right now American families are being squeezed on all sides. Gas prices are sky high and climbing. The cost of food is going up. So is the cost of college tuition and health care. So it is no surprise that ``change'' is the word everyone is talking about. My colleagues on this side of the aisle and I want change, too, but we want commonsense solutions. We are the party of economic security. We think we should keep more of the money we earn. We favor more private sector solutions to health care. We want America's energy future to be here in America, not the Middle East. We want to change the disastrous policy that has been implemented and kept by our fellow colleagues on the other side of the aisle for the last 30 years, a nonenergy policy, no production. As a Washington Post editorial pointed out today, Congress cannot repeal the laws of supply and demand. Demand worldwide has gone up but supply has not. We have the answer to that problem right here in America. We want to change it and use the resources we have. We also want a strong commitment in the war on terror. Changing back to the policies of the 1990s is not the way to win the war on terror. Senator Obama has said we should go back to the 9/11 days, when terrorism was treated as just another law enforcement matter. He pointed to the prosecution of the World Trade Center bombers as the example to follow. That is precisely the type of policy that led to attacks on American embassies and the USS Cole. That is the kind of change that will make the Nation less safe again. If the Democrats wish to talk about change, let's talk about change, change that matters and change that they have been unwilling to acknowledge, a change when we started executing the war on terror by going after the terrorists in the safe havens. We have kept our country safe from attack since 9/11. Under the leadership of GEN David Petraeus, Iraq has changed and changed dramatically. So why can't my colleagues on the other side of the aisle change with it. Why can't they change their stance and get behind our service men and women who want to succeed and have had tremendous successes? President Bush announced the surge and the new counterinsurgency in 2007. Iraq was a violent place at the time. Al-Qaida in Iraq held large swaths of territory. Shiite death squads roamed much of Baghdad, and the Iraqi political leadership appeared helpless. So President Bush, understanding the consequences of failure and withdrawal, changed. He changed military leadership. General Petraeus changed to a new strategy, a strategy for victory, of counterinsurgency or COIN that involves getting out among the Iraqi people, working directly with Iraqis committed to a peaceful, stable Iraq. That is a change my son saw in Al Anbar, when his Marine scout sniper platoon helped clear Al Anbar and turn it over to Sunni citizens and police. We still face big challenges in Iraq but with a far more optimistic picture emerging. Al- Qaida has been almost, if not completely, routed in Al Anbar, once declared the center and base of operations for al-Qaida in Iraq. On May 12 of this year, a prolific terrorist sympathizer by the name of Dir'a Limen Wehhed posted a study on the Internet in which he laments ``the dire situation that the mujaheddin find themselves in in Iraq.'' He is talking about his guys, the bad guys. He cites the steep drop in the number of insurgent operations conducted by various terrorist groups, most notably al-Qaida's 94 percent decline in operational ability over the last 12 months. In Sadr City, Iraqi forces, the forces of the Iraqi Shiite leader al-Maliki, have rolled through huge Shiite enclaves relatively unopposed. Iraqi forces did the same in April in the southern city of Basra, where the Iraqi Government advanced its goal of establishing sovereignty and curtailing the powers of the militias. When General Petraeus returned to Washington in September of last year, even at that time he reported that the number of violent incidents, civilian deaths, ethnosectarian killings and car and suicide bombings had declined dramatically from the previous December. But despite all this positive change, many on the other side of the aisle are too vested in political defeat to see it. In fact, most Democrats opposed the surge, claiming it is more of the same and would neither make a dent in the violence nor change the dynamics in Iraq. The Democratic leader proclaimed ``This war is lost'' and that U.S. troops should pack up and come home, a disastrous change that even many thoughtful scholars and commentators who opposed going into Iraq initially say now is not the way to go. It would be a disaster. General Petraeus returned again to Washington in April this year, and violence has been reduced further. American casualties have declined significantly. Al-Qaida was virtually eliminated in the northern city of Mosul, as verified by the terrorists themselves. There are more Iraqi security forces. The Iraqi Government has passed a variety of laws promoting reconciliation. Prime Minister al-Maliki continues to demonstrate he can stand up to fellow Shiites supporting violence and Iranian-backed special groups. There is every reason to embrace the positive change we have seen and not abandon it and not force a withdrawal. For that is not change but, rather, a policy that would put Iraq back on the path toward violence, terrorism, and chaos. The change we have made has made our country safer, going after terrorists, helping Iraq stabilize their country, turning control over to them, and moving our forces back from the front lines of offense to a support role. That is the change we need to keep our country safe for the future from terrorist attacks. I yield the floor.

Mr. BOND

Mr. BOND. Mr. President, as I have said before on this floor, I think it is time for us to get real about energy. It is time for us to get real about lowering gas prices. The American people, as we all know if we have listened to our folks when we go back home, are suffering from record-high prices of gasoline. Now, in response to the record pain at the pump, the American people deserve something more than legislative gimmicks that raise taxes, increase litigation or provide political favors. It is a startling place many of our Democratic friends now find themselves in. They seem to believe that for every problem there is a tax increase that can help. If there is someone you do not like or want to take a shot at, raise their taxes. You have a problem that needs fixing, raise the taxes. We saw that with the climate debate last week. To address the issue of climate change, the bill proposed, and the amendment we did not adopt last week proposed, to raise energy prices $6.7 trillion to lower energy demand and pay for new Government programs and spending. With record-high prices for gasoline, climate sponsors wanted to raise gas prices a further 53 cents by 2030 and $1.40 by 2050. This week brought a new attempt to raise taxes. Well, last week some quibbled about whether the $6.7 trillion in higher energy prices was a hidden tax or a hidden fee. It did not make much difference to the people who would pay it. There was no hiding from the fact that a tax increase is what the Democrats proposed this week. This week they proposed raising taxes on the exploration and development of new oil supplies. You know, folks back home cannot believe that. Those looking for new sources of oil for the American people would pay higher taxes to find and deliver that oil to us. I have a hard time believing that too. But we folks from Missouri do not take words at their face value. We call ourselves the Show-Me State for a reason. You need to show us how raising taxes would help this situation. For me, personally, I have not ever seen a time when raising taxes on something lowered its price or produced more of it. I think our minority leader pointed out the Los Angeles Times said raising taxes to deal with the oil supply was similar to a climatologist saying trees caused global warming. Well, it is economics 101, folks. Raise taxes, you get less of it. You increase exploration and development and you get more of it and you lower the price. In this case we actually have the experience about what President Carter did. In the mid-1970s, he pushed through higher taxes on domestic oil production. What a disaster that was. Oil companies reduced their U.S. domestic operations and went overseas. The result was a greater U.S. dependance on oil from the Middle East, which continues today. Why our friends on the other side of the aisle would want to return us to the days of Jimmy Carter, I do not understand. It may feel good to some people to propose hurting American consumers by putting a tax on the oil industry or on the executives, it may sound good, but it winds up hurting the American people. The Democrat bill failed to get support. It contained other provisions that would hurt consumers as well. One section would allow the Department of Justice to sue, to sue those countries for their membership and participation in OPEC. Now, that is a feel-good provision as long as you do not think about what would happen. How can anyone doubt that an OPEC country facing the prospects of U.S. lawsuits--if we could have jurisdiction over them, and I question that--would stop selling oil to the United States and take their oil someplace else, such as China. Again, the Democrat bill would hurt suffering Americans by driving oil supplies away from the United States for fear of litigation. Speaking of litigation, we sure didn't hear much from supporters of the bill about the $1.6 billion in tax breaks for trial lawyers hidden in the legislation to extend renewable energy tax credits. Section 311 would allow trial lawyers working on contingency $1.6 billion in tax breaks. Apparently, the suffering of trial lawyers is more important to some in the Democratic Party than the suffering of the American people paying record prices at the pump. The tax breaks for trial lawyers is one section before the tax provisions before film and television producers. Section 312 modifies tax deductions for domestic film and television production. It gives special tax treatment for U.S. actors, directors, and producers. Obviously, I support tax breaks for U.S. workers. But why does the Democratic Party think tax breaks for American actors are more important than price relief for moms and dads suffering record gas prices? Why does the party on the other side think tax breaks for Hollywood film producers are more important than price relief for American truckers suffering record diesel prices? At the same time the Democratic bill is giving tax breaks to trial lawyers in Hollywood, they are blocking the American people getting new oil supplies they need to bring gas prices down. I am a cosponsor of a bill entitled ``The American Energy Production Act of 2008.'' If enacted, this legislation would produce up to 24 billion barrels of oil from U.S. domestic sources. The bill would allow environmentally friendly access to roughly 10 billion barrels of recoverable oil in northern Alaska. I challenge anyone who opposes opening access to Alaskan oil to read the bill and see all of the environmental requirements it contains. I challenge them, if they haven't done so, to go to the North Slope of the Bering Sea and see the drilling going on at Prudhoe Bay 45 miles to the west of ANWR. They have been drilling there. They drill in an environmentally friendly way. They have to put the roads in in midwinter, when it is 200 degrees below zero. They are rock roads. They don't disturb the environment. As a matter of fact, the caribou love them. The caribou herds are flourishing. The wolves are great. The flowers are just as good as they are elsewhere. The mosquitos are just as big as they are in the lower part of Alaska. That drilling is being done without environmental damage. About 30 miles to the east Canada is drilling. Several hundred miles to the west Russia is drilling. They are producing significant amounts of oil. Oil drilling in Alaska or exploration in the deep sea or recovering oil from shale would take advantage of the latest, most modern, environmentally friendly drilling and development technology. Today we have modern oil rigs that can drill down and then virtually sideways far beneath sensitive surface areas needing protection. Oil rigs at sea are now so safe they can withstand hurricanes without spilling a drop of oil. There are thousands of oil rigs off the coast of Louisiana. Did anyone hear a report about an oil spill after Hurricane Katrina? No. Because it didn't happen. This is the kind of environmentally protective technology we would use to open oil reserves in the seabed off America's coasts. Experts know of at least 14 billion barrels of oil off our Atlantic and Pacific coasts so far out to sea they couldn't be seen from shore. There may be many more. There are much higher estimates. This number is probably an understatement because they have not even mapped many of these areas and explored for oil reserves. We also have a massive supply of oil in oil shale in the mountains of Colorado, Utah, and Wyoming. The shale is so thick with oil one can smell and feel it in the rocks. With oil at $10 a barrel, it was too cheap to make oil shale affordable in the 1970s and 1980s, but prices at even half of today's level would be enough to unlock U.S. oil reserves in shale: roughly 2 trillion, it is estimated, barrels of oil, and that is seven times the reserves of Saudi Arabia. Why should we be begging OPEC or Saudi Arabia for more oil when we have seven times the oil Saudi Arabia has in that one area alone? Opponents say no. They give us the NIMBY treatment--not in my backyard. Unfortunately, they don't limit themselves to blocking action in their backyards. They limit everybody else's backyard as well. We had a classic vote in the Appropriations Committee in May-- unfortunately, a straight party-line vote--whether to lift the moratorium and allow the preparation for environmentally friendly exploration and development of shale oil. Fifteen of my Democratic colleagues voted no; 14 Republican Senators, including me, voted for opening it. We failed. In Alaska, the people fully support opening northern Alaska to further environmentally safe oil extraction. It is the elected representatives of other States far below to the east of Alaska who want to thwart the will of the people of Alaska. The people of Virginia fully support opening oil reserves in the deep ocean off their shores, but elected officials from California and other States from the West want to thwart Virginia's desire. The people of Utah support opening the oil reserves under their mountains, but it is the interest groups in Washington, DC, and other States that are thwarting the people of Utah. The people of my State don't understand why we are blocking access to U.S. oil reserves. They don't understand why we are withholding new supplies needed to get prices down. They don't understand why we are denying ourselves the relief we need and deserve. In my State we mine lead. Lead has environmental problems. We have to deal with the environmental problems, and we do. There is only one simple reason we mine for lead. We have 90 percent of the lead in the United States, and it is needed for technology. But at the same time on energy, we in Missouri are working hard to develop new, clean sources of fuel and ways to reduce energy demand. Kansas City, MO, is a national leader in hybrid cars and the advanced vehicle batteries they need. We have a Ford plant where Missouri autoworkers assemble the Escape hybrid SUV. We also have a GM plant where they assemble hybrid SUVs and sedans. In the Kansas City area, we have an advanced battery manufacturer producing the next generation lithium-ion batteries. They use a polymer technology to improve performance and safety. Our military is taking advantage of this technology now, and someday it will go into our automobiles. Trying to stay one step ahead, we are also working on the next generation of hybrid cars. Right after these remarks, I intend to go outside to the area we call the swamp, just northeast of the Capitol, to see a plug-in hybrid Ford Escape brought to town for the Department of Energy. Plug-in technology would allow us to begin to travel the first 40 miles of every trip on electricity, without burning a drop of gas. Many families and commuters in the city could go the entire week back and forth to work burning no gasoline. Rural folks and farmers could drive their trucks with plug-in hybrid technology into town and around the farm. Then, when they need to haul a load great distances, the traditional engine would automatically kick in. I introduced an amendment to the climate bill last week which would have helped workers, the environment, and costs for Americans by starting the U.S. domestic manufacturing supply base for hybrid batteries for automobiles. Hybrid cars are more expensive than traditional cars because their hybrid batteries are made in low quantities in Japan, Korea, and China. Not surprisingly, those firms favor their Japanese and Korean auto manufacturers, and whatever is left comes to U.S. carmakers. The answer to this problem is mass U.S. production that will produce hybrid batteries in high volumes and cause prices to fall, putting thousands of U.S. workers in good manufacturing jobs in Missouri and across the Nation. It would be a win/win situation--good for the environment, reducing oil demand; good for consumers who need cheaper cars that burn less gas; and good for workers needing good-paying jobs at home. I introduced an amendment that would have provided Federal funds. Unfortunately, that amendment, like others, was blocked from consideration by climate bill sponsors. I will continue to fight for a commonsense proposal, and that is what we need. We need to get past gimmicks, charges, and countercharges, taxes, ranting and railing and lawsuits. The American people need fundamental relief for a fundamental problem: prices are high. There is too much demand, not enough supply. It is economics 101, as I said. We need a comprehensive solution that provides the American people with more supply and less demand and also with more environmentally clean solutions. Last year we addressed demand through higher, newer, aggressive but achievable CAFE auto efficiency standards. Yet, as we have seen, demand strategies have not stopped the record increase in prices. We need to address supply--billions and billions of barrels of oil on our land, under our land, off our shores, in our mountains. That is what the American people need--not gimmicks, not increases in taxes, not more litigation, not tax breaks for trial lawyers or Hollywood. I urge my colleagues, it is time. Let's get real about our energy strategy so we can provide Americans the real relief they deserve and we ought to be providing. I yield the floor.

Mr. BOND

Mr. BOND. Mr. President, may I ask for 1 minute from the ranking member.

Mr. BOND. Mr. President, my thanks to the committee leaders for bringing forward the nominations to the Senate of Judge Greg Kays and Stephen Limbaugh to be Federal district court judges for the Western and Eastern District Courts of Missouri. Both Judge Kays and Judge Limbaugh are outstanding nominees for the Federal bench. They share bipartisan support, have fine legal minds, long records of public service, and represent the values and character of my Missouri constituents. Both men's modesty matches the modest size of their Midwestern hometowns. But as we have seen so many times in our history, great men, men of learning, men of intellect and excellence, come from modest places. One should not doubt this to be the case. Values of fairness, service, kindness, community, learning, self-reliance, and personal responsibility are those that we value in our constituents, in our small-town communities, and we should value in our judges. I think this confirmation process has succeeded in producing two such men. I thank the Chair, I thank my ranking member, and I yield the floor.

Mr. BOND

Mr. BOND. Mr. President, with some reluctance, I come to the floor today to continue the discussions that were begun this morning about the Intelligence Committee's report that comes out today, called phase II. I am somewhat embarrassed to have to highlight the partisan divisions and sloppy work of the Intelligence Committee that was discussed here. Back in July of 2004, the Intelligence Committee completed an exhaustive 2-year study of the inadequacies of the intelligence pre- Iraq war. We looked at it. We had hundreds of interviews, brought people in, and looked at all of the documents. Our staff analyzed all of these items and interviewed people. We came to the conclusion that, despite what some people had said, the intelligence prior to the Iraq war was flawed. It wasn't a question of the administration pressuring analysts or the administration misusing intelligence. Those charges were made and they were very volatile. They were all dismissed because the intelligence was bad. We passed the bill out of committee unanimously. It was a true bipartisan work. It stands as a monument to what effective oversight could and should be. It helped reform the intelligence community, to make it better and improve the tradecraft of the analysts, and to inspire more working together. But today we have regressed significantly. What came out today as the phase II reports were, regrettably, highly partisan. When I became vice chairman of the Intelligence Committee, I had hopes we would be able to put behind us the corrosive atmosphere of partisanship that had taken over in the committee in previous years. I recommended that we work together on phase II to bring it to an end, because most of the work had been done in 2006. The minority asked for extensive analysis and collation and collaboration, and they prepared that. But the offer was rejected by the chairman. Instead, two reports were written solely by Democratic staffers. No minority staffers participated in the writing of the report. They were shut out, unlike work on the phase I effort. It is an unfortunate example of partisanship being alive and well on the committee. The report released today is an attempt to score election year points. I would have thought we would quit fighting the 2004 election, but apparently we have not. It violates the committee's nonpartisan principles and rejects the conclusions unanimously reached in previous reports. I think it is ironic that the majority would knowingly distort and misrepresent the committee's prior phase I findings in an effort to prove that the administration distorted and mischaracterized the intelligence. In contrast, as I said, the phase I report of July 2004 concluded that most of the key judgments in that NIE, National Intelligence Estimate, on Iraq's WMD programs either overstated or were not supported by the underlying intelligence. And the committee found that the Intelligence Committee failed to explain to policymakers the uncertainties behind the judgment. The report made it clear that flawed intelligence--not administration deception--was the basis for policymaker statements and decisions. Despite the Democrats' political theater on the floor today, none of the facts in the phase II majority reports released today change that conclusion. There is no evidence in the information brought up today that changes the conclusions of the phase I bipartisan 15-to-0 vote. Now, the reports that came out today ignore the fact that many in Congress--Republicans and Democrats--examined the same intelligence as the Bush administration, and they, too, characterized Iraq as a growing and dangerous threat to the United States. The public report is replete with examples of statements by the current chairman and by other Democrats. Let me report what was said by the current chairman. October 10, 2002: There is unmistakable evidence that Saddam Hussein is working aggressively to develop nuclear weapons and will likely have nuclear weapons within the next 5 years. He could have it earlier if he is able to obtain fissile materials on the outside market, which is possible--difficult but possible. We also should remember we have always underestimated the progress that Saddam Hussein has been able to make in the development of weapons of mass destruction. He said this also: Saddam Hussein represents a grave threat to the United States. Further on in the statement, he said on October 10, 2002: The President has rightly called Saddam Hussein's efforts to develop weapons of mass destruction a grave and gathering threat to Americans. The global community has tried, but has failed, to address that threat over the past decade. I have come to the inescapable conclusion that the threat posed to America by Saddam's weapons of mass destruction is so serious that despite the risks--and we should not minimize the risks--we must authorize the President to take the necessary steps to deal with that threat. . . . There has been some debate over how ``imminent'' a threat Iraq poses. I do believe Iraq poses an imminent threat. I also believe after September 11, that question is increasingly outdated. It is in the nature of these weapons that he has and the way they are targeted against civilian populations, that documented capability and demonstrated intent may be the only warning we get. To insist on further evidence could put some of our fellow Americans at risk. Can we afford to take that chance? I do not think we can. Those were the statements he made on the Senate floor. Frankly, I said many of the same things, because he was looking at the same intelligence I was, the majority of this body was looking at, and the executive branch was looking at when they made the distinction. We decided to support the President to move forward. The intelligence was often flawed, but that was the intelligence we had at the time. The report we have today was drafted entirely by the majority. The minority was entirely cut out of the process. Even with the majority- only drafted report, the twisted statements of policymakers cherry- picks intelligence and validates what we have been saying for years--that the intelligence was flawed. No. 2, the statements report excludes intelligence, including instances in which the committee knew that policymakers' statements were fact checked and approved by the IC. For example, the report does not explain that the speech of Secretary of State Powell was not only checked and rechecked by the IC, but that the first draft of the speech was actually written by the CIA. This original draft included text that the majority report claims was ``unsubstantiated.'' The report does not review any statements of Democrats. The report distorts the words of policymakers to help make the majority's case. The majority didn't even seek to interview those whom they accuse of making unsubstantiated statements. There is a second report, the Rome report, which was totally outside the scope of the committee's authorization. The committee said we will look at the Office of Special Plans and the PCTEG in the Defense Department, with reference to Iraq. The report they put out today has nothing to do with Iraq. It is about an Iranian talking about Iran. The people whom they were talking to were not members of the Office of Special Plans or the PCTEG. It was not an intelligence operation. The United States had been contacted by somebody who wanted to speak to somebody other than the CIA about information he had in Iran. It was found not to be trustworthy or useful, and the National Security Adviser dismissed it and said it requires no further proceeding. We wasted time, we wasted valuable effort, and we got nothing for it. I regret to say this has injected partisan politics and does this committee and this body no useful purpose. I yield the floor.

Mr. BOND

Mr. BOND. Mr. President, good morning. Let's be clear as we begin this discussion. I, along with a vast majority of my colleagues, support cutting carbon emissions. We want to cut down on any kind of air pollution we have. We have done a great job over the years in improving our air, and we need to do more. But we must cut carbon without raising prices on gasoline, diesel, electricity, all the things that drive our economy. When American families are suffering record pain at the pump, a home mortgage crisis, and a soft economy, this is not the time to put the Government in a position of raising energy prices far higher than anything we have ever seen. How much would Lieberman-Warner raise energy prices? We can quote from the sponsors of the legislation themselves. This is what the junior Senator from California has said Lieberman-Warner would raise: $6.735 trillion. It takes two charts to put up all the zeroes that this would increase energy prices and, thus, tax American consumers. As we can see, too big to fit on any one board. The bill's sponsors claim they are trying to hit energy companies with the cost of this program. Does anybody doubt what will happen when we increase taxes on producers? That has to be passed on. It will be passed on to families, workers, farmers, truckers in the form of higher energy bills and more pain at the pump. The bill's sponsors point to the customer relief they intend in the form of $800 billion over 40 years for tax relief and $900 billion to utilities to help consumers. That would still mean only $1.7 trillion was returned to an American public paying $6.7 trillion in higher energy costs. That is a $5 trillion loss. That complicated Soviet-style scheme would be based on the wisdom of some small group of bureaucratic czars who would decide who gets the money. It seems they are writing Congress out of the responsibility of handling the Treasury. They want to go around and turn a small group of wise men into the ones who decide who gets the allowances, who gets the relief, and where any relief will go. The problem with the $6.7 trillion in higher energy prices is gas prices are already at record levels. Gas prices topped $4 in many parts of the country and are approaching that in the rest. Drivers are suffering at the pump. I was back in Missouri and traveled all over the State, from one corner to the other, over the Memorial Day recess. I heard firsthand from commuters, farmers, average citizens, businesses looking at absolute catastrophe from these higher energy prices. They are all fed up with higher gas prices. Regrettably, higher gas prices, higher diesel prices are the result of Congress's action or inaction in blocking for 30 years the production of new energy in the United States. I visited truck stops in Joplin in southwestern Missouri and Palmyra in the northeast part of the State. I heard from truckers about the record diesel prices. Things are getting so bad that many are laying off drivers. Some are even going out of business. This is a real problem for our country. When truckers suffer, we all suffer. If they go out of business, we will not have trucks to deliver the goods. Transportation costs make up a significant part of the cost of almost every consumer item. When diesel prices go up, prices go up, and families will pay. In many areas, we may not have the trucking infrastructure to deliver the goods we need. How much will Lieberman-Warner increase our pain at the pump? The Environmental Protection Agency estimates Lieberman-Warner will increase gas prices by 53 cents per gallon by 2030 and by $1.40 per gallon by 2050. Supporters of this bill tell us this is no big deal; it only represents 2 cents a year. A good statistician can try and make any number look not quite so bad. I can't speak for folks in other States, but I can tell you the folks back home have a minimum amount of high enthusiasm for Congress taking more action to raise prices. Mr. President, $1.40 is $1.40. That increase in the price of gasoline is totally unacceptable, particularly when it comes with increases in prices in all other forms of energy. Yet that is the path the supporters of this legislation want us to trod. Some Senators say that since gasoline prices have risen 82 cents since the beginning of the year, it is OK that Lieberman-Warner will only raise prices another 53 cents to $1.40. Does anybody ever stop and think that we are going in the wrong direction? We ought to be talking about what we can do to increase supply, to bring prices down, not figuring out how to come up with a cockamamie scheme that is going to increase prices even more. I find the logic a little bit disturbing, if you can call it that. The 82-cent rise in gas prices over the last year has not been OK with the people in my State. A further 53-cent increase by 2030 in gas prices is not OK. A further $1.40-increase in gas prices is not OK with the people in Missouri. I can tell you that if we don't change the path we are on now, the increase in prices will be even greater. The bill's sponsors say the demand for oil will go down under Lieberman-Warner. Such a claim seems fantastical, until you examine the source of the study. It is a study by the International Resources Group. That name seems normal enough. But then looking at a copy of the study, it shows it was guided by the close involvement of the Natural Resources Defense Council. They are the ones who are behind it. The NRDC study used by the other side assumes we will get 50 or 60 percent of our energy by 2050 from renewable sources such as wind and solar. I am all for clean wind and solar power. But nobody in their right mind will believe we will go to generating 50 percent of our power from wind and solar. That isn't going to happen. You talk to the experts. I have listened to experts, experts who are very knowledgeable about biofuels and others. They say biofuels can help. Wind and solar can help at the margin. But we are still going to depend upon fossil fuel for most of our energy costs, particularly our transportation costs. On oil demand, the NRDC study makes more outlandish assumptions. They predict the fleet efficiency for cars and light trucks will go up to 52 miles per gallon. Congress just finished raising CAFE standards to 35 miles per gallon. Now the NRDC says: No problem, we will move it up to 52 miles per gallon. That would mean we would have a fleet of golf carts hauling our produce. I wonder how many golf carts it would take a farmer to deliver the hay to cattle in the field, how many golf carts to pull a wagon full of corn, how many golf carts to take a large family to school. A fleet of golf carts is a wonderful thing. The NRDC says we will get 52 miles per gallon by moving the vehicle fleet to hybrid and plug-in vehicles. That is another startling assumption, 100 percent hybrids and plug-ins. Don't get me wrong. I am a big fan of the potential of hybrid cars using advanced vehicle battery technology. These are things we ought to be working for. Over the recess, as part of my six-city tour of Missouri I mentioned earlier, I visited the Ford assembly plant in Kansas City, where they make the hybrid Escape SUV. Kansas City is a national leader in hybrids and battery technology. We have the Ford hybrid SUV plant. We have a GM plant assembling hybrid sedans and SUVs, and we are an international leader in all kinds of battery technology, starting from the original lead batteries to lithium-ion batteries to lithium-ion polymer batteries. All these things will help. But Ford is only making about 20,000 of these cars a year. They don't have enough batteries to meet the needs. I wish to expand on the use of advanced vehicle batteries for hybrids and plug-ins. I believe we need to jump start it.

Mr. BOND. I ask unanimous consent for an additional 2 minutes.

Mr. BOND. How much time remains on the Republican side?

Mr. BOND. I ask my colleague how much time he needs.