Jon Corzine

Mr. CORZINE

Mr. CORZINE. Mr. President, today I am introducing legislation, the FHA Multifamily Housing Loan Limit Adjustment Act of 2003, that will improve access to affordable housing for families living in high cost areas where there is a shortage of such housing. This bill was introduced earlier this year by Congressmen Gary Miller (R-CA) and Barney Frank (D-MA) and was recently approved by the House Financial Services Committee. The Multifamily Housing Loan Limit Adjustment Act of 2003 is supported by housing and community advocates and has also been endorsed by the National Association of Home Builders, the National Association of Realtors, the Mortgage Bankers Association, the Manufactured Housing Institute, and the National Affordable Housing Management Association. The Federal Housing Administration's Multifamily Housing programs are among HUD's most successful. The Federal Government has tried a number of different approaches to providing housing over the last 50 years. The most successful of these rely heavily on a public/private partnership that encourages the private sector to produce housing with support from the Federal Government. The FHA mortgage insurance programs have been extremely successful in producing new and rehabilitated housing with little or no cost to the Federal Government. As you know, rising construction costs have resulted in a shortage of moderately priced affordable rental units. Rent increases now exceed inflation in all regions of the country, and new affordable rental units have become increasingly harder to find. Because of the current dollar limits on loans, FHA insurance cannot be used to help finance construction in high-cost urban areas such as the New York/New Jersey metropolitan area, Philadelphia and San Francisco. HUD statistics demonstrate this--in 2002 and 2003, no multifamily loans have been FHA insured in New York City, Philadelphia, Los Angeles, Seattle, Massachusetts, or New Jersey. Increasing the limits on loans for rental housing would create more incentives for public/private investment in communities through America and spur the new production of cooperative housing projects, rental housing for the elderly and new construction or substantial rehabilitation of apartments by for- and non-profit entities. The National Association of Home Builders estimates that increasing the limits in high cost areas will allow for an additional 6,000 units of rental housing to be built each year in the cities limited by the current law. These 6,000 units will generate $318 million in new income to the residents and businesses in these cities, $38 million in added revenues to the local governments, and 6,720 new jobs. Over a ten year period, the cumulative effects of the additional building will contribute $9 billion in new income to the cities where the limits currently constrain new rental production. While Congress approved legislation I introduced in 2001 to increase the statutory limits for FHA-insured multifamily project loans to account for inflation, we failed to act on a key provision in my bill to raise the loan limits for high cost areas. I am reintroducing that portion of my bill gain, with the hope that two years later, we can finally achieve the increases we need to make the FHA multifamily programs succeed in all our communities, particularly in those high costs areas that so desperately need additional affordable rental housing. There is currently no HUD program designed to provide rental housing for working families from 60 percent to 100 percent of median income who are unable to find decent, affordable housing near where they work. Yet, the most recent Census data reveals that these working families, including vital municipal workers like teachers and police officers, are increasingly vulnerable and the lack of decent, affordable housing is increasingly being seen as a significant impediment to local economic growth. This is one reason why the FHA multifamily programs are so important. Without this much-needed adjustment to the FHA multifamily loan limits, access to affordable housing for our working-citizens will continue to lag, thousands of more families will join the 14 million people who currently face severe housing needs and our nation's economy will suffer. I hope my Senate colleagues will support the legislation and help ensure that America's working families have access to affordable housing. I ask unanimous consent that the text of the legislation be printed in the Record.

Mr. CORZINE

Mr. CORZINE. Mr. President, I, too, rise to stand in support of the Biden amendment. The concept of shared sacrifice is fundamental to the American life--something all of our predecessors on this floor and the people of America through history have understood. In times of war, we have understood we all have to participate. It should be no different this time. It is clearly a time when we have not asked for our society to stand up and accept the responsibility--financial responsibility--of standing with those men and women who are sacrificing their lives for us. Instead of actually husbanding our resources so we can carry on that struggle and stand with our men and women in uniform, we are actually undermining that by putting our financial condition into real jeopardy, both now and for a long time into the future. In guns-and-butter policy, one that is totally discredited throughout any kind of analysis, whether in the private sector or academia--and it should be here on the floor--we are now facing $535 billion budget deficits in the coming fiscal year, with budget deficits of that dimension long into the future, borrowing against the retirement security of our seniors and our Social Security trust fund, using the payroll taxes people are reportedly putting into Social Security to protect their retirement to fund tax cuts, at the same time we are actually at war to protect the American people. It is time for us to husband our resources and make sure we don't sacrifice everything on the homefront, whether it is economic security, retirement security, homeland security; all of these issues are short of funding. We hear about it and we cut it back. We make sure we are very precise there, and then we are not willing, for those who are benefiting most in society, who have actually enjoyed the American prosperity the most, to sacrifice marginal amounts to be able to fund an initiative that is proper to protect our troops and take the responsibility for a broken economy, a broken society that, in many ways, is a responsibility we have had because we entered into this. I think it is absolutely essential, and I think many of the people who benefit from the reduced tax rates we are talking about not going ahead and executing will benefit more because we will have a sounder economy, and we will create greater wealth in the economy, and they will welcome the idea that they are actually able to share in some of these burdens as we go forward. As a matter of fact, I know that at a personal level, from conversations I have had across this country, there is a desire to be asked to help. It is really a major mistake, a major shortfall, on our sense of responsibility to the Nation if we don't call for making sure we provide funding for this initiative--this $87 billion the President has asked for. I stand strongly in favor of the Biden amendment. I encourage colleagues to as well. This Nation believes in shared sacrifice. We should show it by supporting this amendment. I yield the floor.

Mr. CORZINE

Mr. CORZINE. Mr. President, I rise to introduce The Federal Housing Enterprise Oversight Modernization Act of 2003, legislation to establish a new, world-class regulator for our housing Government Sponsored Enterprises (GSEs)--Fannie Mae and Freddie Mac--as an agency within the Department of Treasury. There is no doubt that housing finance is essential to our economy and has been one of our Nation's few economic bright spots in recent years. Given its critical role, and the size and complex financial structures of the GSE's, which account for billions of mortgage-finance dollars, we need a credible, world-class regulator that can provide effective oversight. Regrettably, the current system of GSE supervision fails to meet that standard. This legislation has four primary objectives: establishing a new, independent regulator that is credible and capable; ensuring safe and sound capital; promoting market discipline and transparency through enhanced disclosures; and providing an incremental approach to ultimately consolidating supervision of the Federal Home Loan Banks under the regulatory framework contained in this legislation. The proposal also recognizes the importance of the GSEs' underlying housing mission and leaves responsibility for establishing the GSEs annual housing goals and overseeing their compliance with fair housing laws with the Department of Housing and Urban Development (HUD). The legislation would create a new agency, the Office of Federal Housing Enterprise Supervision (OFHES), as a bureau within the Department of the Treasury, with a structure similar to that of the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS). The agency would have general regulatory, supervisory and enforcement authority with respect to the enterprises, be independent of Treasury with regard to its comments and congressional testimony, and have a director, appointed for a five-year term, who would be given a seat on the Federal Financial Institutions Examination Council (FFIEC). To ensure that the enterprises' activities remain consistent with the scope of their charter, the agency would be authorized to approve all new enterprise programs, but in close consultation with HUD. Additionally, the agency would be given broad new authority to hire experienced personnel, a significant portion of whom will be designated specifically to carry out examinations and supervisory activities, to make certain that the agency can fulfill its safety and soundness responsibilities. Central to that oversight function is ensuring that the enterprises maintain safe and sound capital through vigorous, continuous monitoring. The legislation therefore requires the new agency to ensure that the enterprises remain in continuous compliance with their statutorily prescribed minimum capital holding requirements. By ensuring that the GSEs maintain adequate capital, we will mitigate the risks to the enterprises, and our financial markets, from unforeseen shocks that can, and do, occasionally occur in our financial markets. To accomplish this, the legislation takes a multi-pronged approach to the issue of risk-based capital. First, the legislation requires the new agency to continually monitor the risk-based capital held by the enterprises, but it also provides the new agency's director with the flexibility to adjust the risk-based capital level of the enterprises in order to ensure their safe and sound financial operation. The legislation also authorizes the new agency to conduct a comprehensive review of the enterprises' risk-based capital rule every five years. Part of the review would include a report to Congress entailing what, if any, proposed changes the new agency believes are needed to the risk-based capital rule to better align the capital held by the enterprises with risk, and reflect evolving best practices for risk-based capital standards for large, complex financial institutions. However, on a continual basis the Director would have the authority to adjust elements to the enterprises' stress test other than those specifically prescribed in the risk-based rule. With regard to the GSE non-mortgage related investments, this legislation affirms the notion that those investments should be of the highest quality and within the scope of the enterprises' respective charters. It does so by requiring the new agency to continuously monitor the appropriateness of the investments in the liquid and non- liquid portfolios of the GSEs and by certifying that the liquidity management practices of the enterprises coinform with recommendations contained in the ``Sound Practices for Managing Liquidity in Banking Organizations'' established by the Basel Committee. The capital and liquidity management provisions of this legislation are balanced. They ensure that the enterprises maintain appropriate minimum capital and are adequately capitalized relative to their risks. They also empower the new agency to take appropriate action if enterprises become undercapitalized, and promote sound liquidity management practices. At the same time, the bill is not so overly prescriptive that it would undermine the essential liquidity the enterprises' provide, which has enabled America's housing markets to become the envy of the world. The third element of this bill that should dramatically improve the GSE's regulatory framework promotes transparency through enhanced disclosures requirements. This legislation statutorily requires Fannie Mae, Freddie Mac and the Federal Home Loan Banks to disclose a variety of information that will provide the public, investors, and Congress with a better understanding of the underlying financial health of our housing enterprises. First, the legislation requires the GSEs to register their equities under the Securities Exchange Act of 1934, and to comply with SEC disclosure and reporting requirements contained under sections 12 (Registration Requirements for Securities), 14 (Proxy Voting Information) and 16 (Insider Sales) of the 1934 Act. These disclosures are consistent with the highest standards of corporate governance and disclosure required of other public companies and in my mind there is no reason why the GSEs should not be required to do so as well. Second, this legislation would require Fannie Mae and Freddie Mac to disclose information regarding their interest rate and credit risks. Specifically, each enterprise would regularly report the impact on their mortgage portfolios of a 50 basis point change in interest rates and a 25 basis point change in the slope of the yield curve. They would also be required to disclose, on a quarterly basis, the financial impact on each enterprise of an immediate 5 percent decline in U.S. home prices. Additionally, the bill requires the GSEs to acquire credit ratings from an SEC-recognized credit rating agency to provide an assessment of the risk to the government and independent financial health of each enterprise. This ``stand-along'' rating would be derived from the underlying credit quality of each enterprise and assume no direct support from the Federal Government. These disclosures will ensure that the standards of financial disclosure of the GSEs are in line with the rest of corporate America, making the enterprises subject to public scrutiny and market disciplinary forces. Finally, the bill takes an incremental approach towards incorporating oversight of the Federal Home Loan Banks into the new regulatory framework created under this bill. The bill requires Treasury, in consultation with HUD, to issue a report to Congress no later than six months after the date of the bill's enactment on the appropriate manner upon which to consolidate the responsibilities of the Federal Housing Finance Board, and oversight of the Federal Home Loan Banks (FHLBs), into the regulatory framework contained under this bill. And as I mentioned earlier, the FHLBs would be required to immediately comply with financial disclosure and reporting requirements under the 1934 act in a manner similar to those required of Fannie Mae and Freddie Mac under this bill. Lastly, the legislation would authorize the Secretary of the Treasury to designate an individual to serve as one of the five Federal Housing Finance Board members. This authority, transferred from HUD, would immediately involve Treasury in the regulatory rubric of the FHFB and ease the transition of the consolidation of the FHFBs regulatory responsibilities into this new agency. In conclusion, the reforms contained in this proposal are very important. They would establish a new regulatory framework that promotes sound and safe financial operations at the GSEs. They would promote stability in our capital markets by providing investors with better information about the financial health of the enterprises. They would affirm the GSEs' critical role in our nation's housing market. And they would protect investors and taxpayers, while preserving the opportunity of millions of families to pursue the American dream of homeownership. I urge my colleagues to support this, important legislation. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. CORZINE

Mr. CORZINE. Mr. President, I rise to introduce The Federal Housing Enterprise Oversight Modernization Act of 2003, legislation to establish a new, world-class regulator for our housing Government Sponsored Enterprises (GSEs)--Fannie Mae and Freddie Mac--as an agency within the Department of Treasury. There is no doubt that housing finance is essential to our economy and has been one of our Nation's few economic bright spots in recent years. Given its critical role, and the size and complex financial structures of the GSE's, which account for billions of mortgage-finance dollars, we need a credible, world-class regulator that can provide effective oversight. Regrettably, the current system of GSE supervision fails to meet that standard. This legislation has four primary objectives: establishing a new, independent regulator that is credible and capable; ensuring safe and sound capital; promoting market discipline and transparency through enhanced disclosures; and providing an incremental approach to ultimately consolidating supervision of the Federal Home Loan Banks under the regulatory framework contained in this legislation. The proposal also recognizes the importance of the GSEs' underlying housing mission and leaves responsibility for establishing the GSEs annual housing goals and overseeing their compliance with fair housing laws with the Department of Housing and Urban Development (HUD). The legislation would create a new agency, the Office of Federal Housing Enterprise Supervision (OFHES), as a bureau within the Department of the Treasury, with a structure similar to that of the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS). The agency would have general regulatory, supervisory and enforcement authority with respect to the enterprises, be independent of Treasury with regard to its comments and congressional testimony, and have a director, appointed for a five-year term, who would be given a seat on the Federal Financial Institutions Examination Council (FFIEC). To ensure that the enterprises' activities remain consistent with the scope of their charter, the agency would be authorized to approve all new enterprise programs, but in close consultation with HUD. Additionally, the agency would be given broad new authority to hire experienced personnel, a significant portion of whom will be designated specifically to carry out examinations and supervisory activities, to make certain that the agency can fulfill its safety and soundness responsibilities. Central to that oversight function is ensuring that the enterprises maintain safe and sound capital through vigorous, continuous monitoring. The legislation therefore requires the new agency to ensure that the enterprises remain in continuous compliance with their statutorily prescribed minimum capital holding requirements. By ensuring that the GSEs maintain adequate capital, we will mitigate the risks to the enterprises, and our financial markets, from unforeseen shocks that can, and do, occasionally occur in our financial markets. To accomplish this, the legislation takes a multi-pronged approach to the issue of risk-based capital. First, the legislation requires the new agency to continually monitor the risk-based capital held by the enterprises, but it also provides the new agency's director with the flexibility to adjust the risk-based capital level of the enterprises in order to ensure their safe and sound financial operation. The legislation also authorizes the new agency to conduct a comprehensive review of the enterprises' risk-based capital rule every five years. Part of the review would include a report to Congress entailing what, if any, proposed changes the new agency believes are needed to the risk-based capital rule to better align the capital held by the enterprises with risk, and reflect evolving best practices for risk-based capital standards for large, complex financial institutions. However, on a continual basis the Director would have the authority to adjust elements to the enterprises' stress test other than those specifically prescribed in the risk-based rule. With regard to the GSE non-mortgage related investments, this legislation affirms the notion that those investments should be of the highest quality and within the scope of the enterprises' respective charters. It does so by requiring the new agency to continuously monitor the appropriateness of the investments in the liquid and non- liquid portfolios of the GSEs and by certifying that the liquidity management practices of the enterprises coinform with recommendations contained in the ``Sound Practices for Managing Liquidity in Banking Organizations'' established by the Basel Committee. The capital and liquidity management provisions of this legislation are balanced. They ensure that the enterprises maintain appropriate minimum capital and are adequately capitalized relative to their risks. They also empower the new agency to take appropriate action if enterprises become undercapitalized, and promote sound liquidity management practices. At the same time, the bill is not so overly prescriptive that it would undermine the essential liquidity the enterprises' provide, which has enabled America's housing markets to become the envy of the world. The third element of this bill that should dramatically improve the GSE's regulatory framework promotes transparency through enhanced disclosures requirements. This legislation statutorily requires Fannie Mae, Freddie Mac and the Federal Home Loan Banks to disclose a variety of information that will provide the public, investors, and Congress with a better understanding of the underlying financial health of our housing enterprises. First, the legislation requires the GSEs to register their equities under the Securities Exchange Act of 1934, and to comply with SEC disclosure and reporting requirements contained under sections 12 (Registration Requirements for Securities), 14 (Proxy Voting Information) and 16 (Insider Sales) of the 1934 Act. These disclosures are consistent with the highest standards of corporate governance and disclosure required of other public companies and in my mind there is no reason why the GSEs should not be required to do so as well. Second, this legislation would require Fannie Mae and Freddie Mac to disclose information regarding their interest rate and credit risks. Specifically, each enterprise would regularly report the impact on their mortgage portfolios of a 50 basis point change in interest rates and a 25 basis point change in the slope of the yield curve. They would also be required to disclose, on a quarterly basis, the financial impact on each enterprise of an immediate 5 percent decline in U.S. home prices. Additionally, the bill requires the GSEs to acquire credit ratings from an SEC-recognized credit rating agency to provide an assessment of the risk to the government and independent financial health of each enterprise. This ``stand-along'' rating would be derived from the underlying credit quality of each enterprise and assume no direct support from the Federal Government. These disclosures will ensure that the standards of financial disclosure of the GSEs are in line with the rest of corporate America, making the enterprises subject to public scrutiny and market disciplinary forces. Finally, the bill takes an incremental approach towards incorporating oversight of the Federal Home Loan Banks into the new regulatory framework created under this bill. The bill requires Treasury, in consultation with HUD, to issue a report to Congress no later than six months after the date of the bill's enactment on the appropriate manner upon which to consolidate the responsibilities of the Federal Housing Finance Board, and oversight of the Federal Home Loan Banks (FHLBs), into the regulatory framework contained under this bill. And as I mentioned earlier, the FHLBs would be required to immediately comply with financial disclosure and reporting requirements under the 1934 act in a manner similar to those required of Fannie Mae and Freddie Mac under this bill. Lastly, the legislation would authorize the Secretary of the Treasury to designate an individual to serve as one of the five Federal Housing Finance Board members. This authority, transferred from HUD, would immediately involve Treasury in the regulatory rubric of the FHFB and ease the transition of the consolidation of the FHFBs regulatory responsibilities into this new agency. In conclusion, the reforms contained in this proposal are very important. They would establish a new regulatory framework that promotes sound and safe financial operations at the GSEs. They would promote stability in our capital markets by providing investors with better information about the financial health of the enterprises. They would affirm the GSEs' critical role in our nation's housing market. And they would protect investors and taxpayers, while preserving the opportunity of millions of families to pursue the American dream of homeownership. I urge my colleagues to support this, important legislation. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. CORZINE

Mr. CORZINE. I appreciate the comments of the Senator from New Hampshire about guarantees. The idea of making certain that those payments, that $900 average that we are talking about, is available is going to take some of those kinds of choices that the Senator outlined, as did the Senator from Pennsylvania. We have to make some tough choices. We made a very tough choice when we said we are going to cut taxes, the present value of taxes, $12.1 billion, which put us into deficit financing of $550 to $600 billion in the upcoming fiscal year, when the Social Security shortfall in this country, on a present value basis as opposed to accumulating all those totals over 75 years, is $3.8 trillion--three times the coverage of the estate tax. Even if you reformed it up to a $4 million or $5 million exemption, it would fill about one-quarter of that hole. The dividend exclusion, the cut in capital gains, would take it up a little over half. There are other options than just sitting here and suggesting that there are no ways to fund this Social Security gap. That was why it was so important to emphasize ``Save Social Security First'' when we were running surpluses. We wanted to build up that Social Security trust fund so there would be income from it, but also have the ability to meet those needs as we go forward. I think it is absolutely essential that we focus on guaranteed benefits because we are looking at the core, the fundamental cornerstone of what retirement savings is for a vast number of Americans. Fifty percent plus depend mostly on Social Security. So having that at the risk of the whims of the market is a whole different kettle of fish than having what a guaranteed benefit is about. That is why we emphasize it.

Mr. CORZINE. We should protect Social Security and oppose privatization.

Mr. CORZINE. Mr. President, we could get into a debate about whether making tax cuts that have not occurred yet permanent is a tax hike. I think that is not what we are talking about tonight. Are there ways this can be financed? At least this Senator made some specific suggestions about where one could look for funding that would cover this gap, and I think there are a number of ways of looking at it. They require tough choices. Is providing $900 monthly income to seniors more important than eliminating the estate tax, providing a dividend exclusion to a very narrow sector of our society, or is it better to provide $900, $11,000 a year on average, to the American people, providing also for 2 million kids who lost their parents, dealing with the disabled in this country? It is hard for me to understand these tradeoffs, but at least I believe that that is an argument the American people would find winning. I also believe Social Security has been a promise to the American people--again, that if you live by the rules, you pay your taxes, if you show up and work, if you are committed to a lifetime of work, you will have a dignified retirement. And putting this into the risk of a marketplace--a world that, both fortunately and unfortunately, from time to time I have lived in--can lead to results for individuals that are much different than what the expectations or whatever actuarial numbers are projected by people who are bureaucrats thinking about what returns will average out over some long period of time. Because people live in the here and now, in a 20-year timeframe or 40-year. They work and they retire at a certain point in time. And if the market is not performing at that point in time, when that account they own comes up, they don't have those guaranteed benefits. By the way, this is a zero sum game. When you take out that $2 trillion, it requires that somebody else give, not only the people who are choosing to leave the system but those people who choose to stay in the system.

Mr. CORZINE. The Senator from New Hampshire makes the assertion that the Social Security actuaries have said that these plans--at least the President's commission's plans--will resolve the problem related to solvency. I, for the life of me, do not read those actuarial reports with that conclusion. In fact, the reason we are talking about the $2 trillion that seems to be missing--the magic asterisk--is that that, in fact, is talked about in these actuarial reports as a basis for cutting guaranteed benefits--25 percent for near termers, 45 percent for people out in that 50-year timeframe. There is a missing hole. It is not enough just to assert that this is actuarially sound when that is not, in fact, what the reports say, at least as I read them. And I do not understand how we are going to get through those transition costs, which are repeated by almost any objective analyst I have heard talking about moving to privatized accounts. That is why we so strongly stand and speak to guaranteed benefits because that is what the program is about. Yes, it has the political risk, but, as I think the Senator from New Hampshire knows, markets have a risk. They have real risk. The Senator talked about a 20-year timeframe. I think if one looked from 1929 to 1949, you would find a 20-year period where returns were at best flat, if not diminished. So it is a very tough analysis to show that any individual retiring at any given point in time is going to be secure because the markets have produced a 7-percent return, which, if you look at 100 years or 50 years, may very well be the actuarial result. But you don't eat actuarial results; you eat benefits.

Mr. CORZINE. I know my colleagues on the other side of the aisle are a little resistant to talking about avoiding making permanent some of the Bush tax cuts, but I wonder if there is any proposal at all, among the tax cuts that the President has laid down and we as a Congress have supported, that one would feel were appropriate to help finance this incredible deficit that I think we all agree is so important, whether it is to fill that $2 trillion gap that you admit is there and will have to default. Is it looking at people who make more than $1 million? Is that worth trading off financing adequately the Social Security system? Is there no tax cut that has come through that would not be justified relative to the cost of having it?

Mr. CORZINE. If the Senator from Pennsylvania will wait, I will ask that question. The question we have to get to when we are talking about an intellectually honest debate about Social Security and whether people have a plan--you can ask whether one wants to talk about capital gains, tax dividend exclusion, inheritance tax, as I suggested, as a means to fill some of this gap. Others may have other choices. It happens to be this Senator's choice with regard to these particular issues, but there are other ways to do it. There is no answer that I am hearing from my Republican colleagues about where you get the $2 trillion that is going to finance these transitions to private accounts--there is none; I have yet to hear it-- without entering into the general funds at a time when we already have denigrated our fiscal posture in this country to an extraordinary degree, switching from $250 billion surpluses.

Mr. CORZINE. Thank you, Mr. President. Let me say on the constitutional question, the Court rules. But if there is a law that has to be changed, it has to come before this body. The political risk is no higher, in my view, than the market risk, being one who has lived with market risk for a fairly substantial period of my life and understanding that those risks are real and tangible. We have very real and tangible examples of that in the world today. Look at the underfunded pension liabilities that are managed for some of those teachers and other people who have been talked about. I think we are talking about two relationships. And I think when you are talking about--which gets to my question: Is $900 a month too much to promise our seniors? Is a guaranteed benefit of $900--and then adjusted for wage indexes so it is a standard of living and replacement wage--is that really too much? I ask the Senators.

Mr. CORZINE. Mr. President, I thank the leadership on both sides of the aisle for sponsoring this debate on the future of America's Social Security system. It is one of the most important debates I think we can have as a nation, and I think many on this side of the aisle believe Social Security is the clearest expression of our Nation's values. The Social Security system, for 70 years, has provided a promise, a commitment between generations, that if you work hard, pay your taxes, and play by the rules, one day you will be able to retire. Actually, no expression of the common good of our Nation has been more broadly accepted nor admired for the results: That the reduction in poverty of America's seniors went from about 50 percent to 8 percent during the existence of Social Security is a testimony to its great success. It is not a handout; it is not welfare. It is an earned benefit that rewards work. It promotes and rewards what I think all of us would like to see in our society. Senator Durbin and I could not be more privileged to stand in support of this national commitment to America's seniors, disabled, and children who lose a parent. This universal insurance program provides guaranteed security for all seniors. Let me emphasize the word ``guaranteed.'' Regardless of the state of the economy, rate of inflation, fluctuations in the financial markets, or the length of one's life, security is guaranteed, dignity is guaranteed. It is hard to underestimate the importance of Social Security for our Nation's elderly. Of the two-thirds of our seniors and the disabled, 50 percent or more of their income comes from Social Security. For 20 percent of seniors in this society, it is their only income. For women and minorities, it is a much higher percentage of their protection as they go forward. Nearly 2 million children receive survivor benefits. For the disabled, it is more than 50 percent of their income. It is the ultimate safety net and one that is earned. I think it is important for us as Democrats--and we certainly argue this--that Social Security's guarantee of financial security should be at the top of our Nation's priorities, along with educating our kids and protecting national security. ``Social Security first'' is more than a rhetorical phrase; it is a policy that works. That is why we so strongly oppose privatization views on Social Security through so- called personal accounts. Privatization, in our view, is not about choice. Privatization is about mandatory cuts in guaranteed benefits. That is by the analysis from the President's own commission. All of the Social Security actuarial analyses admit that we will raid the trust funds for up to $2 trillion and will force deep cuts in guaranteed benefits--up to 25 percent for many current workers and, as the years unfold, as much as 45 percent for future enrollees. Those benefit cuts would not be voluntary. They would apply to all retirees--even those who choose not to invest in private accounts. We think that is a major problem, a major flaw in the direction you take. Seniors simply cannot afford to have benefits cut, particularly those on the low-income side of our society. After all, today's Social Security guaranteed benefits are simply an average of $900 a month, or less than $11,000 a year. In fact, for women, it is $780 a month, or about $9,300 a year. I think that is pretty tough to live on in New Jersey; I don't know in Illinois, or Pennsylvania, or New Hampshire; but $9,300 doesn't cut it. It is very hard to presume that somebody is going to live successfully in their retirement. Many of us look at this and argue about priorities. Some argue that we need deep cuts to make sure Social Security is solvent. But the numbers prove that wrong, in my view. In the next 75 years, the entire Social Security shortfall, in present value terms, is $3.8 trillion. That is a lot of money. Meanwhile, the Bush tax cuts would cost more than $12 trillion, present value, in the same amount of time. We need to make priority choices. We believe we can fund this, since it ought to be one of the highest priorities in society that would necessarily be on our agenda. We have the resources. It is a matter of will and of whether we want to make sure we have the fiscal discipline to set the priorities to make it happen. I also want to talk about this rate of return. I am an old grizzled 30-year veteran of the financial markets, and I can tell you they go up, down, and move sideways for years on end. It is an uncertainty and a risk that you build into markets if you put it into these personal accounts. We believe in that three-legged stool. We are not against private investing. We are not against personal savings. We encourage 401(k)s and IRAs, but I think it is a mistake to put at risk the guaranteed benefits for those 20 or 50 percent who are so dependent on Social Security. There are a number of other problems I could find with private accounts. As to management fees, I assure my colleagues, the smaller the account, the higher the fees. They accumulate. We have had a number of problems with them in Great Britain and other countries. There are serious issues that need to be addressed before one even thinks about it. I hope we do not lose track of that compact, of that commitment we have, that promise to make sure that if one plays by the rules, they pay their taxes and work hard, they will have a dignified retirement benefit. That is how the world has changed post the creation of Social Security, and we believe strongly that we ought to implement a plan that guarantees benefits.

Mr. CORZINE

Mr. CORZINE. Mr. President, I rise today to introduce legislation, the Identity Theft Notification and Credit Restoration Act, to help prevent Americans from being victimized by the growing problem of identity theft. The bill would require financial institutions to notify consumers, credit reporting agencies and law enforcement entities when their security information systems have been breached in a manner that compromises the protection of their customers' personal financial information. By increasing awareness of identity theft and empowering consumers, early on, about potential threats, the legislation can help close the window of opportunity that criminals now exploit to abuse, and wreak financial devastation, on unsuspecting individuals. There is no doubt that we should be doing all we can to reduce the threat of identity theft to consumers, and the harm it brings to our economy. Today, identity theft is the single most frequent consumer- related crime in the United States and it is growing at an alarming rate. According to the Federal Trade Commission (FTC), reported instances of identity theft rose 88 percent in 2002, to 380,000 from 220,000 in 2001. And that does not even come close to reflecting the bigger threat posed by identity theft. A recent FTC survey suggests that the actual number of identity theft occurrences probably was in the ten million range--and that was last year alone. Over the past five years, over one in ten Americans has been a victim of identity theft. And I do not know anyone who does not have a close friend or family member who has been a victim of identity theft. It truly can happen to anyone, anywhere, at any time. The cost of this crime also is astounding. In situations in which offenders use stolen information to open new credit accounts, identity thieves abuse victims' credit to purchase an average of more than $10,000 in goods and services. And those costs grow as identity thieves become savvier and more brazen. From a macro-economic perspective, the damage is equally astounding. Last year, consumers spent an estimated five billion dollars in out-of-pocket expenses to cover losses attributed to identity theft. This data underscores the magnitude of the growing problem. But it is one that can be mitigated, when detected early on. The FTC has reported that early discovery, and disclosure, of identity theft directly reduces the time and money victims must invest to undo the damage wreaked upon them. When identity theft is uncovered in less than 6 months, most consumers do not incur any costs. But, when this fraud is unnoticed for more than 6 months, an astounding 60 percent of victims must make payments out of their own pocket to cover the costs--and those numbers are often in the thousands of dollars. Consumers' experiences and the FTC's data demonstrate that awareness and notification are critical to reducing the harm that identity theft inflicts upon consumers. My bill, the Identity Theft Notification and Credit Restoration Act is based on three key principles--disclosure, prevention and credit restoration. First, the bill would require financial institutions to promptly disclose to affected customers, credit reporting agencies, and law enforcement when their information systems, either computerized or paper records, have been breached in a manner that compromises the security, confidentiality, or integrity of the ``personal financial information'' of that institution's customers. Second, the bill requires credit reporting agencies, upon notification of the breach, to place ``fraud alerts'' in the credit files of the affected individuals. This red flag will alert issuers of credit to undertake enhanced preauthorization procedures prior to issuing credit in the name of an individual who has this alert on their credit file, an important step that should prevent the fraudulent issuance of credit in the name of an identity theft victim. Finally, the bill provides victims of identity theft with access to four credit reports the year following the theft of their identity, to ensure that inaccurate and credit damaging information resulting from the identity theft does not end up on their credit file. The bill also improves the ability of all consumers to monitor the content, and accuracy, of the information contained in their individual credit file by providing them with access to one free credit report, and their credit score, per year. Congress has taken important steps towards minimizing the threat of identity theft. The most important was recognizing the problem and making identity theft a Federal crime in 1998. Since then, other steps have been taken. Industry groups are proactively combating identity theft--by using cutting-edge data encryption and truncating credit card numbers. And later this week, the Senate Banking Committee will mark up reauthorization of the Fair Credit Reporting Act, which will include an entire section dedicated to identity theft protection. But we can do more, and we must do more. Empowering consumers and increasing awareness of identity theft will minimize the risk, and impact, of this particularly harmful crime. This bill does just that. I urge my colleagues to support this legislation and ask unanimous consent that the text of the Identity Theft Notification and Credit Restoration Act be printed in the Record.

Mr. CORZINE

Mr. CORZINE. There clearly is. The Senator from California recognized that. First, there are positive steps that can truly lift up and help children across the country, across the world, frankly, including more thoughtful planning processes. But more importantly, we are taking a decision away from individuals, which is the most private, the most moral, the most important decisions they can take, and saying we know best. I have a very hard time understanding how that fits with other philosophies that I hear at times expressed. I know this is a difficult decision for every individual. They have to struggle with that in their own lives. There is no way, in my view, that we should be moving to have Government make that decision when, in fact, the individual, doctor, and people's moral counsel are the places where that decision lies. I appreciate the Senator from California and her effort to make sure such an important and potentially divisive issue in our society, which has been decided by the courts, constitutionally decided by the Court, continues to be reaffirmed by all involved in elective public office.

Mr. CORZINE. The Senator from California is elegantly stating the case. I certainly have a strong sense that the people of New Jersey believe, the women of New Jersey believe, what the people across the country in the poll numbers that have been suggesting believe: Most Americans thought this issue was resolved once and for all by a very clear decision, tough decision of the Supreme Court, and should stand. What we are doing by including the Harkin resolution--which is, as the Senator said, very elegant, simple, very straightforward, not the rule of law, the force of law--is very clearly underline something that has been decided by the American people and continues to be supported by the American people. It is important we have this language in the underlying bill which, by the way, as I suggested, I didn't vote for to start with. But I do believe it was made better by this resolution. I implore the Senator from California to continue to speak out with the kind of elegance and care which gets at one of the most difficult and painful choices and issues we have to deal with in our society. Since we have resolved this, we should live with it and go forward. I yield the floor.

Mr. CORZINE. Mr. President, thank you. I thank the Senator from Pennsylvania. Mr. President, I come to the floor and stand with my good friend, Senator Boxer, and the women across America to express my support for the landmark Roe v. Wade decision and the importance of protecting a woman's fundamental right to choose. I think that really is what the issue is about--not the parliamentary procedures we are talking about. Earlier this year, we marked the 30th anniversary of this critical decision which clearly established a woman's fundamental right to reproductive choice. I strongly support that right. The decision about this difficult choice for an individual should be made by the woman, her doctor, and her moral counsel and, in my view, not by politicians and not by Government. Simply put, I trust the women of America to make their own health and moral decisions without the intrusion of Government. I think that is what Roe v. Wade indicates. Having said that, I recognize women and men of good faith can and will reach different conclusions about this difficult moral question involved in the debate. But Roe v. Wade is the law of the land. I am very troubled by this administration's--and frankly Congress's-- attempts to undermine that basic right by that decision. Whether it is through the so-called partial-birth abortion bill, reduced access to family planning, efforts in redefining the legal status of fetuses, or far-right traditional nominations, this administration and this Congress are constantly knowingly chipping away at women's fundamental freedoms. That is why I was pleased when, in the context of the so-called partial-birth bill, the Senate adopted the Harkin resolution expressing support for Roe v. Wade, which is what the debate is about today. First, let me make clear I oppose the underlying bill, and I still do. I believe the bill is unconstitutional, and it doesn't take into account the health of the woman that the Supreme Court requires. Its practical effect would be to deny women access to some of the safest procedures at all stages. That said, with the Harkin amendment included, I was at least partially satisfied that the Senate has reaffirmed the importance of Roe v. Wade. Again, the reason we are having this debate is to make sure our conferees are embracing something we supported here in an open vote on the floor of the Senate. All of us know the House has stripped away the resolution affirming Roe, laying bare, in my view, the true purpose of the underlying legislation--to undermine Roe and ultimately roll back women's rights. When Roe v. Wade was decided in January of 1973, abortion, except to save a woman's life, was banned in two-thirds of the States, including my home State of New Jersey. Roe rendered these laws unconstitutional, making abortion services safer and more accessible to women throughout the country--not just to a select few--and certainly on a safe basis. Many of these statutes are still on the books waiting for an anti- choice majority in the Supreme Court to overrule Roe. I hope my colleagues will think long and hard about the implications of forsaking Roe. We need to be very careful to avoid returning to a period in which abortion was illegal and when the only choice women had was to seek illegal and unsafe abortions--particularly when economic position determined who had a safe choice. In those days, thousands of women died each year as a direct result of the abortion ban. In fact, 17 percent of all deaths due to pregnancy and childbirth were the result of illegal abortions. It would be tragic if we return to those days and forget the lessons of history. The Supreme Court itself in 1992 noted that in addition to improving women's health, Roe has enabled women to control their reproductive lives, and thus ``participate equally in the economic and social life of the Nation.'' Justice Harry Blackmun, the author of Roe, called his decision ``a step that had to be taken as we go down the road towards a full emancipation of women.'' That is a pretty straightforward sentence that I think most Americans believe in. If we are really interested in reducing the number of abortions in this country, we should ensure that women have access to the full array of family planning services, including prescription, contraception, emergency contraception, and prenatal care. We should also support expansion of comprehensive sex education. That is the way to deal with this problem as opposed to putting it into the dark alleys and off of the front pages. Every week 8,500 children in our country are born to mothers who lack access to prenatal care. Too many of these children are born with serious health problems because their mothers lacked adequate care during their pregnancy. As a result, 28,000 infants die each year in the United States. That is the real tragedy. We ought to act immediately to address this issue by expanding access to prenatal care, as several of my colleagues and I have proposed, to start helping them stay healthy. What we should not do, however, is pass legislation we know is unconstitutional and which would ban a common and safe form of abortion at all stages of pregnancy, and which would increase maternal mortality--all without improving the health of a single child. We also should not forget Roe v. Wade is still the law of the land, despite this administration's seizing opportunity after opportunity to undermine it. Unfortunately, though, Roe hangs by a thread, and the retirement of one Supreme Court Justice could mean a change and the demise of Roe v. Wade. That is why it is absolutely essential for this Senate to affirm the importance--and indeed the very validity--of Roe v. Wade. That is why it is important for the Senate to oppose the House stripping of the Harkin resolution, which is what we are debating. It is time for us to make sure we stand firm on what we believe in so strongly. I think there is a lot we can do to prevent unintended pregnancies. That is where we ought to be putting our efforts--not undermining Roe v. Wade. I yield the floor.

Mr. CORZINE. Certainly.

Mr. CORZINE

Mr. CORZINE. Mr. President, I rise today to honor the memory of the victims of the Katyn Forest Massacre in 1940. Katyn Forest is a quiet wooded area near the Gneizdovo village, a short distance from Smolensk in Russia. It was at this site, on Soviet leader Joseph Stalin's orders, that the Soviet NKVD shot and buried more than 4,000 Polish service personnel that had been taken prisoner when the Soviet Union invaded Poland in September 1939. Most of these victims were Polish army reservists--lawyers, doctors, scientists and businessmen, Poland's elite and intelligentsia--who were called up to active service following the Nazi invasion of Poland. On September 17, 1939, under the terms of a secret Moscow-Berlin treaty, forces of the Soviet Union invaded Poland through its eastern border. Polish troops, overwhelmed by the German invasion on its western border, surrendered to the Red Army on the pretense they would be protected. More than 15,000 Polish soldiers and civilians were sent to prison camps at Kozielsk, Starobielska and Ostashkov in the Soviet Union. In an effort to eliminate potential threats to Soviet control of Poland and what Stalin described as counter-revolutionary espionage and resistance organizations, Soviet troops, carried out what many have called one of the most heinous war crimes in history. Prisoners in all three Soviet Camps were executed and buried in mass graves. One of these graves was discovered in Katyn Forest, where between four and five thousand Polish bodies were found. There were no trials; there was no justice for these innocent victims. Although the Soviet Government originally denied their role in this unspeakable atrocity, on February 19, 1989 Soviet scholars released documents that revealed that Stalin had indeed ordered the mass execution. The following year Soviet President Mikhail Gorbachev apologized to the Polish people for the killings. While this admission of guilt provided some closure, it certainly does not erase the pain and suffering felt by a nation whose entire population was affected by this horrific event. Sixty-three years later, the name Katyn still stirs passions in Poland. Today, I honor the victims of the Katyn Forest Massacre and commend them for their courage and their sacrifice. For on that fateful day, more than six decades ago, these valiant men paid the ultimate price to secure their country's freedom. It is my sincere hope that as more people learn about the carnage that occurred at Katyn Forest and the surrounding sites, we will be able to come to terms with this tragedy and help heal the wounds that the great nation of Poland and its citizens still suffer. When we honor the memories of those brave souls who were lost on that tragic day, we will prevent future generations from repeating the same horrors which occurred in our past.

Mr. CORZINE

Mr. CORZINE. Mr. President, my amendment is pretty simple. It restores cuts to student aid by prohibiting the use of funds for implementation of new regulations put out by the Department of Education reducing the amount of Federal student aid that individuals will receive. This is Federal aid, for Pell grants and subsidized loans. The Department of Education estimates these reductions in State and local tax allowances in computing the expected family contribution formula will eliminate Pell grants for 84,000 students across the country; 49 out of the 50 States are impacted. It will cost $270 million in Pell grants. The ripple effect, using the same formula throughout all State grants and private grants, could reach into the billions of dollars. And I think all of you know, across the country colleges are raising their tuitions. State and local taxes are going up.

Mr. CORZINE. Mr. President, I urge my colleagues to vote for this fully offset amendment.

Mr. CORZINE. Mr. President, I would like to make a few additional comments beyond what I said last night about my student aid amendment, No. 1602. In particular, I want to describe my intent as to how the amendment would work. The amendment says that the Department of Education cannot use any funds to implement the May 30, 2003 updates to the State and local tax allowances, to the extent that they would reduce aid for any student. In effect, what the amendment means is that the Department must republish its State and local tax allowance tables, and use the prior allowances in all cases in which the prior allowances were higher, which is the case for the vast majority of States and types of students. There were a few cases where the Department got it right. That is, they increased the State and local tax allowances for independent students in a handful of States. And I don't want the amendment to hurt those students. That is why the amendment qualifies the prohibition on implementation or enforcement of the May 30 updates by adding that the prohibition applies ``to the extent that such implementation or enforcement of the updates will reduce the amount of Federal student financial assistance for which a student is eligible.'' I want to clarify that it is the Department's responsibility to make sure this qualifier works by publishing new tables as I just described. It is not intended that college aid administrators would have to figure out which students would be hurt by the May 30 updates on a student-by- student, case-by-case basis at the college level. That would be an unnecessary, unwieldy and burdensome approach, and is not my intent.

Mr. CORZINE

Mr. CORZINE. Mr. President, I rise today to submit a resolution to recognize the life and achievements of Antonio Meucci, an Italian- American inventor who had both an extraordinary and a tragic career. Mr. Meucci made a great contribution as a pioneer in the development of the telephone, and his legacy deserves recognition. Born in 1808 in Florence, Italy, Antonio Meucci showed academic promise from an early age. After being educated at the Academy of Fine Arts, he rose to the position of assistant to the chief engineer for a leading Florentine theater. In 1835, he was recruited by a famous entrepreneur to work as chief engineer for a new theater in Havana, Cuba. There he began work on many of his inventions, including those relating to telephonic communication. Meucci left Havana for the United States in 1850 in search of a better environment to develop his ideas relating to the telephone. In 1854, after his wife had fallen ill, Mr. Meucci set up a rudimentary communication link known as a ``speaking telegraph'' that connected her bedroom to his basement laboratory and the rest of his home. Mr. Meucci spent the next several years trying to advance his idea, and his efforts culminated in December 1871, when he hired an attorney to secure a patent caveat, a 1-year renewable notice of an impending patent, which reflected the promise of his work on the telephone. Although Mr. Meucci retained the caveat for 3 years, he was unable to produce the necessary $10 renewal fee after 1874. Unfortunately, Mr. Meucci died before he was able to complete his efforts. However, his work has not gone completely unnoticed. On the 100th anniversary of the telephone, both the Smithsonian Institution and the International Telecommunication Union honored Mr. Meucci as among the most important pioneers of the telephone. Given his important contributions, I hope my colleagues will join in honoring both the life and achievements of Antonio Meucci.

Mr. CORZINE

Mr. CORZINE. Sure.

Mr. CORZINE. Mr. President, on behalf of myself, Senator Lautenberg, and Senator Clinton, I send an amendment to the desk and ask for its immediate consideration.

Mr. CORZINE. Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.