Kent Conrad

Mr. CONRAD

Mr. CONRAD. Mr. President, I want to say this before we give Senator Graham another chance, and then we are happy to hear Senator Dodd's concern. This is a critical moment for this bill. Are we going to address one of the two major crises facing this country, or are we going to largely say wait for another day? Wait for another day. Wait for the TARP funds that are already oversubscribed. There is about $300 billion left in TARP funds. The testimony before the Budget Committee was crystal clear, from economists across a broad spectrum, Republicans and Democrats, that you are going to need another $300 to $500 billion in the TARP to deal with the financial crisis. I say to my colleagues, if we want to deal with something fundamental with respect to housing, here is our opportunity to do so. I yield the floor and retain the remainder of my time.

Mr. CONRAD. Mr. President, I submit we will not save people's jobs or their homes unless we have a comprehensive strategy to address both. The problem with the economic recovery package is there is precious little in here that does anything about the housing crisis. We hear the assurance that we can take the money from the TARP. The problem is the TARP, by testimony before the Budget Committee, is oversubscribed as it is. Let's do the math. There is about $300 billion left in the TARP. The testimony before the Budget Committee is, we need $300 to $500 billion on top of that $300 billion just to deal with the financial crisis. That doesn't leave any money for the housing crisis. Here we have before us a vehicle to face up to foreclosures. Senator Dodd is absolutely right. I remember well his holding a hearing on foreclosures. I remember well his coming to this floor with legislation. I remember well filibuster after filibuster against dealing with it. Now is the time. We should not wait to take on the foreclosure crisis in America. More foreclosures, more homes lost, more people unable to pay, more banks have their capital impaired, fewer loans being made, more jobs lost. This is an opportunity to deal with the housing crisis and to have it paid for and to have it paid for out of economic recovery funds. I don't know how I would explain to my constituents that housing wasn't a key part of an economic recovery package. How much time do I have remaining?

Mr. CONRAD. I retain that time.

Mr. CONRAD. Mr. President, I thank the chairman of the committee who is managing the bill. Maybe I will just take a few minutes. I understand we have another colleague who is on his way and wants to speak. The comment was made that this amendment requires us to use the Sheila Bair approach. Let me say, in this whole crisis, the Government official who shines the brightest and the best has been Sheila Bair. She is the person who has warned us that this tsunami of foreclosures was coming. She is the one who warned us of the financial crisis. She is the one who had the most consistent track record about dealing with it and dealing with it effectively. Institution after institution she has taken over, under the rules and the law, have been dealt with in the most economically rational way. Now she has come forward with a plan that observers and economists of every stripe have said is outstanding. It has the best prospects for success at preventing people from losing their homes. This is much more than numbers on a page. When we talk about 1.5 million people not going through foreclosure if our amendment is adopted, according to Sheila Bair and her professional staff, 1.5 million people, this is much more than that number. Think of what is happening in those families, when they have the sense they are going to lose their homes and start through a legal process that sucks them down. I read yesterday what was happening in courts locally as people went in facing foreclosure, the absolute desperation of the people, the confusion, the chaos in their lives. With this amendment, we have a chance to avert 1.5 million American families from going through foreclosure. It is paid for. It is paid for in the least painful way. Let me conclude on the notion of waiting for TARP. The TARP funds are simply insufficient to deal with the financial crisis and the housing crisis. There can be no question. I predict right here, right now, this administration will be coming to us in the weeks ahead asking for between $400 and $500 billion more of TARP funds just to deal with the financial crisis. Senator Graham was there. We had three of the most outstanding economists in the country, Democrats and Republicans, telling us exactly that. To hope and pray that somehow the TARP funds are going to be the savior for housing foreclosure is not something I would want to count on.

Mr. CONRAD. I am happy to yield.

Mr. CONRAD. Is that equally divided?

Mr. CONRAD. I think it is just fundamental that one way to build confidence with the American people is to show them we are using their precious taxpayer dollars in the highest priority areas and we are doing it in a responsible way--not adding to deficits and debt, not creating a huge bow wave for the Federal budget going forward. Some of the items we have taken out only spend out 17 percent in the next 2 years; 83 percent is beyond. So I hope my colleagues are listening carefully to this debate because this one really matters. Mr. President, 1.5 million homes can avoid foreclosure. Let me say, we have not locked in a rigid approach on the FDIC proposal on dealing with foreclosures. We have allowed them to make modifications in their plan so it can take in the best ideas of others. But I think every observer, every economist who has looked at the FDIC plan has confirmed what Sheila Bair has told us in writing today: that this amendment, voted on today, could help prevent 1.5 million people from losing their homes and creating a further downdraft in this economy--more foreclosures, more banks cannot lend, more jobs lost. That is exactly what an economic recovery package should be about. Mr. President, how much time do I retain?

Mr. CONRAD. Mr. President, I am happy to yield.

Mr. CONRAD. Mr. President, I have heard now from the Senator from New York that we should wait to deal with foreclosures--we should wait. Well, that is the opportunity that is before us. We can make a choice on this amendment. We can wait some more to deal with foreclosures or we can take action today. Sheila Bair, the much respected head of the FDIC, has said that if our amendment passes, we can avert 1.5 million Americans from being foreclosed upon. You want to wait on that? What are you going to wait for? You are going to wait to take the money out of the TARP when there is insufficient money in the TARP to deal with the financial crisis, much less the housing crisis and the financial crisis? Look, this is the curious sort of Washington math that has us in deep trouble. We talk about using money that has already been spoken for, and somehow we are supposed to use it twice, maybe three times. I suggest it is much better to act now and to use real money to pay for it rather than be counting on a fund that is already oversubscribed. Now, this notion of waiting leaves me cold. Mr. President, 1.5 million people are out there facing foreclosure, and those families could have the foreclosure averted if we act. This is not the time to wait. This is the time to act.

Mr. CONRAD. Mr. President, I am happy to yield.

Mr. CONRAD. I thank the Chair. I really do not. I really do not understand the logic of waiting. We could take action today, action that is paid for, and save money out of the TARP fund that is already oversubscribed. It is as clear as it can be, there are not sufficient funds in the TARP to do all that is being demanded of it. I do not know how anything makes more sense or is of a higher priority in an economic recovery program than to avert foreclosure. It ties directly to jobs because if a house is foreclosed on, all the houses in the neighborhood lose value. Then what happens? Then more homes are upside down. Already, one in every four or one in every five homes in America is upside down. They owe more than the house is worth. If more houses go through foreclosure, more homes lose value, more people start not to make their payments, the banks have less capital, they are less able to lend, businesses are less able to carry on their activity, more jobs are lost, and more foreclosure occurs. The critical thing is to break the chain. That is the opportunity this amendment presents. Mr. President, how much time remains on our side?

Mr. CONRAD. Equally divided.

Mr. CONRAD. Mr. President, there are very few Members for whom I have higher regard or greater affection than the Senator from Connecticut. So I say that I could not more profoundly disagree when I hear him say foreclosure mitigation has nothing to do with jobs. Why is this economy in free fall? Well, one central reason is the housing crisis. Foreclosures are a symptom of the underlying disease, and if you don't treat it, this body is getting sicker and sicker and sicker. The Senator offers as an alternative to take $50 billion out of the existing TARP fund. The problem is the existing TARP fund doesn't have enough money for the purpose for which it was created, which was to deal with the fiscal crisis. So this has everything to do with economic recovery. It has everything to do with jobs. It has everything to do with strengthening the economy. I know Senator Graham is seeking recognition.

Mr. CONRAD

Mr. CONRAD. I will take the time, since I do not see the Senator from South Carolina. I will say very simply, colleagues, this amendment is designed to help address the housing crisis by reallocating money from lesser priority areas to the FDIC mortgage foreclosure mitigation plan. Sheila Bair, the head of the FDIC, has written us and said to us, if this amendment is passed, it will prevent 1.5 million American homes from being foreclosed on. It is paid for. This is critically important to economic recovery. Virtually every economist has told us if this is not dealt with, the housing crisis, and dealt with effectively, we cannot expect economic recovery.

Mr. CONRAD. I ask for the yeas and nays.

Mr. CONRAD

Mr. CONRAD. Reserving the right to object, is there an order that has been entered with respect to the offering of amendments?

Mr. CONRAD. Is it possible to get on this amendment train? Senator Graham and I have an amendment. He is the lead, so it would be a Republican amendment.

Mr. CONRAD. I reserved the right to object. I will not object.

Mr. CONRAD. Mr. President, during debate on H.R. 1, the Economic Recovery and Reinvestment Act of 2009, Senator Cornyn of Texas offered Senate amendment 277 to Senate amendment 98, an amendment in the nature of a substitute. Pursuant to section 312 of the Congressional Budget Act of 1974, Senate Budget Committee majority staff determined and advised the Senate Parliamentarian that the amendment violated the Senate pay-go rule, section 201 of S. Con. Res. 21, the concurrent resolution on the budget for fiscal year 2008. Consequently, a point of order was raised against the Cornyn amendment, and a motion to waive the point of order failed by a vote of 37 to 60. Upon further review, committee staff concluded that the determination of a pay-go point of order was made in error--in fact, the amendment did not violate section 201. As chairman of the Committee, I regret the point of order was inadvertently raised in error. Hospice

Mr. CONRAD

Mr. CONRAD. Madam President, I strongly share the desire of the Senator from Arizona to put the budget back on track, and put it on a path to balance. But I do not think this proposal has received the consideration it deserves. It has not had a hearing before the Budget Committee, yet includes a proposal to create deficit targets that were badly gamed during the Gramm-Rudman era, and turned out to actually cover for additional deficits. So I think that would be a profound mistake. We need a process that works. It deserves the consideration of the President and the Budget Committee. I strongly urge my colleagues to oppose this amendment at this time. I raise a point of order that this amendment violates section 306 of the Congressional Budget Act.

Mr. CONRAD

Mr. CONRAD. Mr. President, section 227 of S. Con. Res. 70, the 2009 Budget resolution, permits the chairman of the Senate Budget Committee to revise the allocations, aggregates, and other appropriate levels in the resolution for legislation making improvements in health care, including, under subsection (a), legislation that reauthorizes the State Children's Health Insurance Program, SCHIP. The revisions are contingent on certain conditions being met, including that such legislation not worsen the deficit over the period of the total of fiscal years 2008 through 2013 or the period of the total of fiscal years 2008 through 2018. In addition, section 227 limits the amount of the adjustment in outlays to no more than $50 billion over the period of the total of fiscal years 2008 through 2013. I find that Senate amendment No. 39, an amendment in the nature of a substitute to H.R. 2, the Children's Health Insurance Program Reauthorization Act of 2009, satisfies the conditions of the reserve fund to improve America's health. Therefore, pursuant to section 227, I am adjusting the aggregates in the 2009 budget resolution, as well as the allocation provided to the Senate Finance Committee. I ask unanimous consent that the following revisions to S. Con. Res. 70 be printed in the Record.

Mr. CONRAD

Mr. CONRAD. Madam President, I will vote to confirm Timothy Geithner as Secretary of the Treasury. I do so with reluctance because of his tax history. For me, this vote is a very close call. Quite simply, I find his failure to pay self-employment taxes completely unacceptable. I am a former tax commissioner. I have dealt with hundreds of cases like this one. And in normal times, that alone would lead me to oppose his confirmation. But these are not normal times. Our country faces the greatest economic and financial crisis since the Great Depression. I personally don't think we can afford a further delay in filling this critically important position. I think we are not anywhere near out of the woods, that very serious days lie ahead of us, and that it is absolutely imperative that we get a Treasury Secretary in place. And Mr. Geithner does have the background to contribute to solving this crisis. For these reasons, I will support his confirmation.

Mr. CONRAD

Mr. CONRAD. Madam President, first of all, I wish to thank Senator Whitehouse for his contributions to this Chamber. He has been an outstanding Member. He serves on the Budget Committee with me. He has developed a special expertise on health care which is so badly needed. I wish to comment very briefly on the CBO report we received today in the Budget Committee hearing on the fiscal outlook. It is truly jaw- dropping. There is a $1.2 trillion deficit for this year, before any economic recovery package is passed. Add to the debt even higher: $1.6 trillion will be added to the debt of the country, and, again, that is before any cost of an economic recovery plan. If one factors in an economic recovery plan, we could be looking at an increase in the debt of $2 trillion this year alone. To put that in context, we have a gross debt of the United States of $10.6 trillion roughly today. So I think it is imperative that while we put together an economic recovery plan, which we must, we also are cognizant of the very serious long-term fiscal condition we face as a nation. There is a front-page story in the New York Times today indicating that the Chinese, the biggest financers of our debt, have a reduced appetite for American dollar-denominated debt because they have their own economic issues, their own need for the use of capital at home. This could have enormous consequences for us going forward in terms of interest rates and what it will take to attract foreign capital to float this economic boat. One final point. Last year, of the new debt financing for this country, 68 percent of it came from abroad. Madam President, 68 percent of our new debt financing came from abroad. The fact that the Chinese, who have been the most significant contributors to financing that debt, are expressing a reluctance to take on more of our debt, do more of our debt financing, should send a warning signal to all of us as we fashion long-term fiscal and economic policy. I yield the floor.

Mr. CONRAD. The Senator is exactly right. The debt of the country at the beginning of the last administration was about $5 trillion. They have approximately doubled the debt of the country on their watch, dramatically more than doubled foreign holdings of U.S. debt. So the current administration, the outgoing administration, has left the incoming administration in a very deep hole, not to mention the economic difficulties and the extreme need for an economic recovery plan to give lift to this economy.

Mr. CONRAD. Yes, not only the incoming administration, the whole country because our ability to cope with an economic downturn, the flexibility is substantially limited by what has already been done to dramatically increase the debt, as the Senator described, in good economic times. Unfortunately, that is the reality we now confront. Today's news by the Congressional Budget Office of not only the $1.2 trillion deficit this year but massive deficits as far as the eye can see should sober us all.