Christopher Dodd

Mr. DODD

Mr. DODD. Mr. President, I move to reconsider that vote and lay that motion upon the table. The motion to lay upon the table was agreed to.

Mr. DODD. Mr. President, what is the pending business now?

Mr. DODD. There is 30 minutes equally divided between the proponents and opponents of that and the Carper amendment?

Mr. DODD. Mr. President, again very briefly, obviously much of what we have included under our bill, of course, is designed specifically to avoid the kinds of losses that occurred. There are provisions in the bill dealing with those kinds of safeguards--the clearinghouses, the regulators, the mandatory exchanges, and the like. That is in the bill. Again, I have to say to my colleagues here that there are potentially serious consequences to this. There are no protections for commercial end users if this amendment is adopted. We run the risk of financial instability in governments and corporations that depend upon credit to operate--$25 trillion. Again, I would have offered a side-by-side which would have taken some of the good aspects of the Dorgan amendment, but my concern is about exactly the provisions I have mentioned, and there is too much at risk, in my view. If this is the only choice we are given, I have to provide my recommendation. My recommendation is, given the choice we are given, the choice I have to make in this particular case is that we table this amendment. For those reasons, Mr. President, I move to table the Dorgan amendment, and I ask for the yeas and nays.

Mr. DODD. Mr. President, I ask unanimous consent that if the Dorgan amendment No. 4114 is disposed of, then the Senate proceed to vote in relation to the Grassley amendment No. 4072, with no intervening amendment in order.

Mr. DODD. I move to reconsider the vote, and I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 4072

Mr. DODD. I inquire of the Chair, the pending business is now the Grassley amendment; is that correct?

Mr. DODD. I move to reconsider the vote and to lay that on the table. The motion to lay on the table was agreed to.

Mr. DODD. I have no objection.

Mr. DODD. Mr. President, how much time do I have?

Mr. DODD. I will take 5 minutes, if the Chair will advise me. Mr. President, this is striking a balance. If I were king for a day, I might write a different approach than either the Corker or the Carper amendments. But I am 1 of 100 people in this Chamber. Our goal is to try to find common ground on a very difficult issue. This is a complicated question. It isn't just about Main Street and Wall Street; it is about how we enforce laws, how to make sure we don't overreach and create unnecessary duplication and raise costs. We are trying to balance what should not be necessarily competing goals. One is to have stronger consumer protections. I hope I don't have to make that case again. What got us into this mess to begin with was the lack of consumer protection. It was bad mortgages, no documentation, luring people into deals they could never afford, people making decisions to jump into deals they couldn't handle. For all those reasons, this problem mushroomed out of a mortgage problem into a large, now almost global, problem we are confronting. So, clearly, as to consumer protection, we are doing that in this bill. For the first time in the history of our country, we will now have an agency exclusively dedicated to protecting the average consumer in this country when it comes to financial services. We have it for products you buy. We have it for the food you eat. But Lord forbid you end up in potential ruin because of a financial product. Where do you go? There is no recall. There is no place to get that financial product recalled if you are running into problems. So we do that in this bill. Let me be the first to admit there are people who are vehemently opposed to have anything like a Consumer Financial Protection Bureau anywhere in our government at all, and I know that. My colleagues know that. I understand, from time to time, attempts to try and undermine this in whatever way you can has been a part of this. The second goal is the one my colleague from Delaware has mentioned: preserving our national banking system, which has been around for 150 years. It is clearly in our interest to do that. So how do we strike this in a way that strikes that balance? The Carper amendment preserves the States' attorneys general role in protecting their citizens from abusive practices. That is about as Main Street as you can get. As I said, the alternative is to have someone from Washington, I suppose, being able to show up to protect those interests. Why not preserve the right of an attorney general at the State level to protect those interests? But it also makes clear--the Carper amendment does--that the Office of the Comptroller of the Currency can preempt a State consumer law, while preseving our national banking system. So it strikes that balance, which is so critical. The Carper amendment does three things: It preserves the State's role in enforcing the Federal consumer financial laws. That is No. 1. Secondly, it returns to the Office of the Comptroller of the Currency the preemption of State consumer financial laws to the 1996 Barnett standard, which is the Supreme Court case, and provides for transparent determination procedures for preemption decisions. Thirdly, the Carper amendment makes clear that the States' attorneys general have the authority to enforce certain laws against national banks in their home States. That is the balance the Carper amendment provides. The Corker amendment--if we adopted just the Corker amendment--does two things. One, it completely eliminates the State attorney general from enforcement of the Consumer Financial Protection Act. It eliminates it altogether. I do not think you want that. That does not make sense to me. That is where you get confusion. Secondly, it would confuse the Federal preemption standard under the Barnett case that the OCC should apply when preempting State consumer laws. We are trying to get clarity, and we get clarity with the Carper amendment. That is what we are looking for: National banking gets preserved. Yet the attorneys general can enforce the laws rather than relying on something at the national level to do the job. So I urge my colleagues--and I say this respectfully because Bob Corker and I have worked together on a lot of issues over the last number of months--on this one, I respectfully suggest it goes too far. That is why I urge Senator Carper, who has a strong interest in this subject matter, to sit down and see if we could fashion a compromise that would maintain the balance of allowing State AGs to do their jobs when it comes to enforcing the rules under our Consumer Financial Protection Bureau, while preserving the national banking system, where the OCC has the right to preempt. That is what we have done with the Carper amendment. That is the balance that gets struck here. I say respectfully, the adoption of the Corker amendment throws that balance off whack, and that is what I think would be a step backward when it comes to this provision. So for those reasons, I would urge a ``no'' vote on the Corker amendment and a ``yes'' vote on the Carper amendment, which I think strengthens this bill overall. With that, I see my colleague from Virginia, who may want to be heard on this amendment as well.

Mr. DODD. Will my colleague yield on that point he made?

Mr. DODD. There is nothing ``in the backroom'' about this. This is an honest, open discussion about how to deal with preemption. The suggestion my colleague makes about a backroom arrangement is not the case.

Mr. DODD. No, it is not a backroom.

Mr. DODD. Let me just clarify. No. 1, there is no 60-vote requirement.

Mr. DODD. No. 2, I know people want to vote for everything around here, but occasionally we run into conflicts, and there is a conflict between the Corker amendment and Carper amendment, and that is the role of the attorneys general. The Corker amendment excludes the attorneys general from enforcing the regulations of the consumer protection agency. The Carper amendment includes it. With all due respect, I know we would like to vote for all amendments, but somehow we do end up with a conflict. It is a legitimate point. I am not suggesting that my friend from Tennessee doesn't have an argument, but I just think the Carper amendment makes more sense. So I urge my colleagues, out of respect for each other--I know we like to please each other, but the fact is, we end up with a contradictory conclusion when we are trying to come to some clarity. That is the only point I wish to make.

Mr. DODD. Have the yeas and nays been ordered, Mr. President?

Mr. DODD. Mr. President, what is the pending business? Vote on Amendment No. 4071

Mr. DODD. Have the yeas and nays been ordered?

Mr. DODD

Mr. DODD. I believe so. I ask the Senator, this is the modification?

Mr. DODD. As I understand it, the modification is a new paragraph: (d) Limitation.--Subsections (a) and (b) shall not apply to federal assistance provided in response to a natural disaster. Is that right?

Mr. DODD. Mr. President, I ask unanimous consent that the time until 12:05 p.m. be divided for debate with respect to the Gregg amendment No. 4051, and that at 12:05 p.m., the Senate proceed to vote in relation to the amendment, with the provisions of the previous order remaining in effect.

Mr. DODD. Mr. President, let me address this amendment, if I can. First of all, let me express my admiration and respect for Judd Gregg. He and I are good friends. We have worked together on numerous issues over the years, so I have developed a great deal of respect for him. In fact, it was Judd Gregg and a handful of others who made it possible, 18 months ago, for us to develop the emergency economic stabilization bill. Without his leadership and support, I think our country, unarguably, and, beyond our own borders, the world would have been in much more difficult economic shape--had it not been for his leadership, along with others who pulled together that proposal that passed this body 75 to 24 on that night in late September of 2008. So my admiration for Senator Gregg--and among other accomplishments he has had during his service here--is strong. This proposal, however, goes way beyond anything I have ever quite seen here, which basically says the Federal Government cannot provide any help to States and local governments. Then the wording of it: even if you might be in trouble. I go back and I think of New York City, a major metropolitan area of our country, which was in economic difficulties. I do not remember the history, exactly, of what occurred that brought the city to that fiscal brink, but it was serious enough, and there was a serious debate here that occurred before I became a Member of this body over what could be done to help put that city back on its feet again. As a result of the efforts, both in New York, New York State, as well as here, New York recovered, paid back whatever it was it received in financial assistance, and, arguably, the most important metropolitan area of our Nation survived a fiscal disaster. Again, now, through the IMF and the World Bank, we appropriate moneys each and every year to support international organizations that have as one of their purposes--or their purpose is to provide financial assistance and stability to nations that are struggling. In many cases, I suspect they are struggling for exactly the same reason my colleague and friend from New Hampshire has identified: They made bad choices, bad decisions. I am not suggesting their problems were afflicted by outside forces, although that could happen. Certainly what we are watching today in Europe is a classic example, where you have other nations now in trouble because of one Nation's I will even call it fiscal irresponsibility. I am not sure that is the final conclusion, but let's call it that. Yet we find the declining Euro, we find debt in trouble in that country, so other nations are feeling the effects of it. We have all seen where events could occur in our own country: The automobile industry in Michigan ends up in deep trouble. That has an impact on other States. It certainly affects the economy of Michigan. The idea is ``one nation,'' and we are one nation. We are not Europe where we have separate political structures and separate rules and regulations and one currency which pose difficulties. We are one people here, whether you live in New Hampshire or Connecticut or Arizona or Alaska or Hawaii or Texas or Oklahoma. Wherever it is, we are one people. Lord knows, we do not want to reward irresponsible behavior on the part of a local government or a State. But the idea that we are going to terminate or not provide any kind of assistance because we have drawn the conclusion, in the wording of this amendment, as I read it in this language here: The Board of Governors shall not, directly or indirectly, lend against, purchase-- All these things we could do here-- State government, municipal government, local government, or county government [that] has defaulted on its obligations, is at risk of defaulting, or is likely to default. . . . Who makes that determination: ``is likely to default'' or ``is in danger of''? Is there some omnipotent force that is going to lean over all of this and say: I think such and such a county or such and such a State is ``in danger of''? That is pretty vague language here to decide, all of a sudden, regardless of the reasons. We have excluded natural disasters. I appreciate that addition to this amendment. But there can be other factors which can contribute to these circumstances in a State. Again, according to the language on the first page of the amendment, it says: Notwithstanding any other provision of law, no Federal funds may be used to purchase or guarantee obligations of, issue lines of credit to or provide direct or indirect grants-and-aid to, any State. . . . I remind my colleagues that is a pretty broad, sweeping proposal. Medicaid; the Children's Health Insurance Fund; the CDC's disease control, research, and prevention programs; the Special Supplementary Nutrition Program for Women, Infants, and Children; the Unemployment Trust Fund; Veterans Health Administration medical services; Department of Justice, State, and local enforcement assistance; FEMA--FEMA, I guess, may be excluded because of ``a natural disaster''--but the idea we would be depriving a State of these resources seems to me would only exacerbate the problem. Again, I will acknowledge in certain circumstances local governments or State governments have made irresponsible choices. But you do not blame the entire population of that State or locality because some leadership has made a bad choice and then cut off Medicaid, nutrition assistance, and so forth. Do you blame a child living in a State because some Governor, a mayor, a county executive has made dumb decisions, and all of sudden, we say: ``I am sorry, you happen to live in that State. You are going to have to move. Go someplace else in order to get help''? I, for the life of me, do not understand. I understand the frustration we all feel when we read about States and localities that could have made better decisions. But, again, I remind my colleagues here, we are one Nation--one Nation. ``E Pluribus Unum''--they are the words right above the Presiding Officer's chair--``from the many, one.'' We are many: Over 300 million in 50 States and hundreds and hundreds of jurisdictions across the country. Thank the Lord we are not just some collection of disparate entities bound together by a common currency and little else. We are bound together by much more as a nation. So I hope my colleagues, at 12:05 or thereafter when we vote on this, would say respectfully to our friend from New Hampshire that this amendment ought to be rejected. I yield the floor.

Mr. DODD. Mr. President, I will not take a long time to respond. First of all, the distinction between a public company--and, again, my colleague is absolutely correct; we want to end bailouts of those companies, and we certainly want to discourage the kind of behavior that can put a county or a city or a community or a State in fiscal jeopardy. But the legislation also looks backward. On page 2 of the amendment it says: ``Municipal government, local government, or county government which has defaulted on its obligation.'' So it isn't just those that may default. Orange County, CA, for instance, defaulted, and worked itself out of its difficulties. But now I am to understand that because Orange County was in default a number of years ago, got out of its difficulties, yet the adoption of this amendment would preclude Orange County potentially from getting any kind of assistance. I don't understand that. Again, there are a lot of reasons, aside from natural disasters, why this can happen. Some of them have nothing to do--a major industry which all of a sudden finds itself departed. How many times have we seen a company located in a State or a locality, particularly a county, that is the major employer, employs thousands of people, all of a sudden go offshore. There is a dramatic decline in tax revenues that come in. So that community's obligations to its citizenry on education, health, highways, everything else, all of a sudden are in jeopardy. That is not mismanagement of the government. It is that company made the decision to leave. All of a sudden we find an area in trouble and they turn to their national government for some help, and we are saying: Well, because you are at risk of defaulting--not that you have defaulted; the language is, ``is likely to default or at risk to default,'' you can't get any help because you might be in trouble, not because you have done anything wrong necessarily but because it has happened to you. I just feel that such a step would be draconian, in the extreme, when it comes to the people of our Nation who, from time to time, need help with that list of obligations that would have to be curtailed if a community is likely to or is at risk of defaulting or has defaulted on its obligations. Over what period of time? Are we talking about 10 years, 20 years, over 100 years? How far do I go back to determine whether someone has defaulted? What were the reasons for it that occurred at that time? It provides none of that relief, except that maybe it was a natural disaster.

Mr. DODD. I am happy to yield.