Christopher Dodd

Mr. DODD

Mr. DODD. Mr. President, will the Senator yield?

Mr. DODD. Mr. President, title IX of the bill--and I am not suggesting you are going to love every dotted i and crossed t, but in title IX of our bill we do cover rating agencies. Again, this is a complex area, and there are different ideas about how to do this. But the legitimate point made by the Senator from Minnesota about rating agencies is something we share, and in title IX we try to address ways in which we can get far more accountability out of these agencies.

Mr. DODD. I accept that argument, but I would not accept the argument there is nothing in the bill about rating agencies.

Mr. DODD. Mr. President, I ask unanimous consent that on Thursday, May 6, after the opening of the Senate, the time until 10 a.m. be for debate with respect to the Tester-Hutchison amendment No. 3749, with the time equally divided and controlled in the usual form; that at 10 a.m., the Senate proceed to vote in relation to the amendment, with no amendment in order to the amendment prior to the vote; further, that the Sanders amendment No. 3738 be the next Democratic amendment in order, and to clarify for the Record, the amendment would be called up upon disposition of the pending Shelby amendment No. 3826.

Mr. DODD. Mr. President, let me say this, if I can, while we are waiting to do the wrap-up here. We finished up on the series of votes sometime around 4 o'clock or 3:30 this afternoon. It is now 6:30. Other than some statements made by Members regarding various amendments, the pending amendment is the one offered by my colleague from Alabama dealing with the consumer protection part of the bill. I am anxious for us to debate that. I regret we didn't have any debate this afternoon. I made the point that Members have amendments--and we have all been around--most people--long enough to know that with some 90 amendments, it is not going to mean every amendment people have will be offered. But to the extent that time is used effectively, we can maximize the number of amendments that can be offered. Whether you agree with our colleagues or not, they ought to be given the opportunity to offer an amendment and to debate it and get a vote. Again, that doesn't mean every amendment will be treated equally here, but I have been determined to try to make this work for as many Members as possible. But when 2 or 3 hours go by and not a word is spoken about a pending amendment, the hour will come--and I can predict the debate: You have not given us enough time to debate our amendments. I am keeping score privately about the times that have gone vacant when no one has talked on a pending amendment. Tomorrow, after the disposition of the Tester-Hutchison, Hutchison- Tester amendment, I will be asking at that time prior to that vote for a time agreement on the pending amendment. My hope is it will be reasonable, take an hour or so to do that. I understand that. But I am not going to tolerate a whole morning wasted on that with all these other amendments. We need to have that debate and then move along. I say that respectfully. We are not going to spend an endless number of days on this bill. There are a lot of other matters to be considered by this body. This is a very important bill, and it is important that we listen to the various ideas people want to offer to it. I say this to my colleagues: Try to keep the time requests short. This was a good beginning today, but I would have preferred we could have used the last 2 or 3 hours to debate the pending amendment and then schedule a vote in the morning. I believe 2 or 3 hours to debate an amendment ought to be adequate. I recognize that not every amendment is considered as important as others. Prioritizing the amendments is important. Senator Bernie Sanders has an amendment that will come up afterward. I cannot speak for him, but I asked him. He said he might take an hour. That is a reasonable request. He has an important amendment and wants to be heard on it. I hope Members will follow the Sanders example and be respectful of others so we can get many amendments in. My hope is that tomorrow evening we will be here later. We are going to be here Friday, I gather. I do not make those decisions, but I have been led by the leadership to believe we will be here Friday. If I had my way, we would be here Saturday and Sunday to get the bill done. I will be urging the leader to keep us here as long as necessary to have a full debate on this bill. I am not sure I will succeed in those requests, but I want to make them. Given the complexity of this bill and the interest Members have, if we utilize the time rather than sitting in quorum calls hour after hour--we will hear that bellowing that occurs: I never had a chance to be heard on my amendment. Why didn't I have time to be heard? The answer is going to be--I am keeping the record here--how much time I have been sitting around waiting for someone to come debate an amendment. If I sound a little frustrated--it is a little too early in the debate to get frustrated, but I wanted to express it in advance of the real frustration that will come later on. There will be no more votes this evening. I see my colleague from Colorado is here. I am going to do the wrap- up and then allow my colleague to be heard.

Mr. DODD

Mr. DODD. Mr. President, I want to join my great friend from Mississippi, Senator Cochran, in his sentiments about David Obey. I have known Dave Obey for 36 years. He had already been in Congress about 4 or 5 years when I got to meet Dave, when I arrived in 1975. He is a wonderful individual, with deep passions. He was the best ally you ever had if he was on your side, and he was a frightening opponent if he was on the other side. Having been on both sides of an argument with Dave Obey, believe me, I much prefer having him an ally on issues. He is a notorious workhorse who showed up every day with his sleeves rolled up to fight for not only the little guy in his own district in Wisconsin but for people all across the country. Working men and women never had a better ally in the Congress of the United States than they did in Dave Obey. He did not spare any of his emotion or rhetoric when it came to the defense of that working man and woman in our country during his more than 40 years of service. He has great passion. Nothing he disliked more than a bully, and nothing ignited his temper more than any injustice. He loved his State, his family, and enjoyed a great joke when we would spend time with him in various committees and the marking up of bills. He and I worked together. We were involved, when in my earliest days in the House I was a strong backer of Richard Bolling from Missouri to be majority leader back in 1976 I think it was. Gillis Long of Louisiana and I were the comanagers of Richard Bolling's campaign to become majority leader when Tip O'Neill was going to become Speaker and there was a contest over the majority leader's race. The other great ally in that effort was Dave Obey of Wisconsin. That is when I first got to know Dave, in that battle for the majority leader. We lost that battle. Dick Bolling did not make it. Jim Wright became the majority leader in a very close contest, in fact, with Phil Burton of California. It was a 1-vote margin that determined the majority leader's race. Richard Bolling dropped out after the second ballot, did not get enough votes. But Dave Obey and I and Gillis Long and a group of others organized to support Richard Bolling. That is when I got to know Dave. I was with him about a couple of weeks ago. Rosa DeLauro, the Congresswoman from the New Haven district in Connecticut, my former campaign manager, chief of staff for 7 years, was only the second woman to be the Chief of Staff of a Senator of the United States. She served with me for 7 years and went on to become a Member of Congress for the last 20 years herself. Rosa sits on the Appropriations Committee and chairs the Agriculture Subcommittee. Dave Obey was at that event for Congresswoman DeLauro and gave some wonderful remarks on behalf of her that evening. I join Thad Cochran in wishing Dave the very best. He served his State, his district, and his country with distinction and great patriotism. We wish him the very best.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the Senate proceed to a period for the transaction of morning business, with Senators permitted to speak for up to 10 minutes each.

Mr. DODD

Mr. DODD. Mr. President, let me commend the minority leader for his comments on Burma. It was a good education for me here to listen to it. I ask unanimous consent that I be added as a cosponsor to the legislation.

Mr. DODD

Mr. DODD. Mr. President, let me commend the minority leader for his comments on Burma. It was a good education for me here to listen to it. I ask unanimous consent that I be added as a cosponsor to the legislation.

Mr. DODD

Mr. DODD. Mr. President, I thank the distinguished majority leader. He has shown remarkable endurance as well as patience over the last 2 years. The health care debate went on for more than a year, considering its beginning, and we finally ended up passing the legislation. We have a lot of other matters to deal with--obviously, the economic crisis. We are now on the financial reform bill. My hope is--I am not making any procedural requests--based on conversations we had late last evening and again early this morning--and I think Senator Shelby shares this hope with me, and we are working as we speak here--that we might be able to have a vote on the Boxer amendment sometime around 11, 11:30, and a vote on Senator Shelby's proposal, on which I will join him, maybe around 12:30. Then we will be able to take up--not to have to vote on them but agree to them unanimously--the Snowe amendments. There is a Hutchison-Tester proposal that I have endorsed as well and that I think all of us believe is a good addition to the bill. My hope is that in the next couple of hours we will move forward and start the process. There are more controversial amendments Members want to raise. They should have the right to do that and have adequate time to debate their ideas. I know this has been trying for people. People are exhausted. It has been a long Congress. We have taken on some major issues. People are understandably tired, and that situation can lead to the frustration people feel. I noticed in this morning's headlines that the market declined by 2 percent yesterday, not because of something that happened here but something that happened thousands of miles away in a small country in the Mediterranean--again, an indication of how global our economic situation is, how precarious it is, where events in one part of the world can affect all of us. It is all the more important we try to establish some sound rules for the 21st century. The last time we established in a broad sense any rules for the structure of our financial institutions was almost 100 years ago, coming off the 19th century and the early part of the 20th century. Here we are at the end of the first decade of the 21st century, and, as we painfully learned, we are in desperate need to reform the financial structure of our country, having seen what occurred over the last 2 years--the job losses, the home foreclosure numbers, the decline in home values as well as retirement incomes, the loss of household wealth. We don't need to hear the numbers. We have lived it. The majority of Americans are still struggling today as we speak. They are anxious for us to respond to the situation with as much thought and care as we possibly can, to see to it that we don't leave our Nation vulnerable once again to the kinds of economic decisions and failures that caused our Nation to come to the brink of a meltdown financially. These are challenging times. I know it is difficult, and there are strong feelings about how to proceed. But that should not serve as a barrier to us doing our job, to making the decisions each of us was elected to perform. Again, I appreciate immensely the patience of the majority leader and his staff and others and of my colleagues, many of whom have amendments they want to offer to this bill. I want to give them the chance to do that so they can be heard, both Democrats and Republicans. I am particularly grateful to Members who have sought ways to offer amendments we can agree to and accept as part of the legislation. That is a very constructive way to engage in the debate. There are other amendments people believe strongly in that will not be resolvable in the sense of accommodating them, in which case we will have to vote for or against to decide whether to include them in this financial reform package. But that process ought to go forward with civility, with the passion people have for the issue but with the civility to respect each other and the needs of this institution. This is not the only matter this Congress needs to deal with. I know the majority leader has talked about unemployment benefits. They will still be needed in the coming weeks. We have the tax extenders which are critically important. We may have a Supreme Court nomination coming along. The President has sent up the names of three people to serve on the Federal Reserve Board, which will be very important as well considering the economic implications. We have appropriations bills. This is an important bill, but it isn't the only work the Senate needs to accomplish before we adjourn in the fall. My hope is that people will come, engage in the debate, allow for adequate time to be heard, and then decide to move yes or no on these matters. Again, I am hopeful that within the next hour or so we will be able to get this process moving where we can actually start casting votes on ideas, particularly the one Senator Shelby and I will be offering. I hope that in the minds of most, if not all, the too-big-to-fail proposition is no longer a question on this bill. I don't believe it is, anyway, but there are those who do. To the extent we can satisfy them with additions to the bill that will make that more clear, that is a great step forward. I am confident that can be done in the next hour and a half or so and then move on with the various other amendments people have on the bill. In the meantime, I urge Members who do have amendments to come over, maybe start talking about their amendments, start educating the offices about what they want to do with their proposals. I have members of our staff here as well to look at the amendments and, where possible, if we can accept the amendment or modify the amendment and make it acceptable to us, certainly I reach out to my Republican colleagues to see how they feel about it, that might even move the process further along. Between now and the votes, this time ought not to be dead time but time people use as well to help us advance the cause of this piece of legislation. With that, I suggest the absence of a quorum.

Mr. DODD

Mr. DODD. Mr. President, I suggest the absence of a quorum.

Mr. DODD. Mr. President, before my friend leaves the floor, I wish to thank him for his hard work as the ranking member of the Agriculture Committee, with Senator Lincoln of Arkansas. I will quickly address a few points my friend has raised. One I think all of us acknowledge--I certainly acknowledge--is that the GSE issue needs to be addressed. We reached the conclusion that it is such a huge issue, and there are only so many issues we can take on in a bill of this magnitude. Clearly, some language that would allow for some studies to be done or other matters that would help address the issue--I am open to some ideas such as those. To me, for us to try to take on the whole issue of how we reform government-sponsored enterprises--we need to do it. It is clearly an issue that must be addressed. I was concerned about how much we can actually take on in one bill dealing with the entire financial reform structure. I assure my colleague that I am prepared to at least support some ideas to get us moving in the right direction on GSE reform. On the home mortgage area, underwriting standards, again, we are open to ideas. As the Senator may recall, a year or so ago we fought hard to include underwriting standards. The Federal Reserve has now actually written some. We are trying to get responsibility on both sides of that equation. We had lenders out there pushing a lot of stuff out the door, a sector of our economy--the shadow economy, as it is called--luring people in to take no-document loans, securitizing them and moving them along. And we saw the effects of that. I know there are people working on how we can manage to come up with good language that does not so restrain the ability of a lender to have some flexibility in those standards. Clearly, we want standards in place that everybody has to meet--the lender and the borrower--as we move forward to avoid the kinds of pitfalls that have occurred. On consumer protection, the last thing we want is asking the dentist, the butcher, so forth--I know people have talked about being subjected to what we are talking about in financial products and financial services. Again, not imposing any new laws at all, but how do we make sure the seven agencies today responsible for those laws can be consolidated in a thoughtful manner? Lastly, on derivatives, this is an area which is predominantly, although not exclusively, in the purview of the Agriculture Committee. As the Senator points out, when we are talking about futures contracts involving securities, there is clearly SEC involvement, and thus our committee has had some strong interest in the subject matter. Senator Judd Gregg, as well as Senator Jack Reed, has worked on that issue. There is work that needs to be done. We all understand that. My hope is, on the subject matter which the Senator has explained and talked about--and I appreciate his comments this morning that this is a big and important area--that there be an effort to try to develop a bipartisan approach to all of this as we look at it. It is a complicated area of law. It would be to everyone's advantage if there was communication back and forth to come up with some ideas on which we might be able to achieve some strong bipartisan support. I know he is trying to do that. I encourage him to keep that up as we look ahead so we can end up with good answers. I am very grateful for his interest in the subject matter. I am hopeful this morning that we can move along in the amendment process and do our job. I thank the Senator from Georgia very much.

Mr. DODD. Mr. President, I see our colleague from Wyoming. If he is ready to go, I yield the floor.

Mr. DODD. If the Senator will yield for 30 seconds--I see my friend from Louisiana. I wish to give him time. But I wish to say to Senator Casey how much I appreciate his work. We worked together on this committee before I moved on to, I wouldn't say greener pastures, but I was a member of the Banking Committee. I am very grateful to him for his involvement. We dealt with the housing issues and credit card issues and the like as well. I appreciate his comments very much, and I look forward to working with him, along with my colleague, the Senator from Louisiana, Mr. Vitter, who is a member of the Banking Committee. I thank Senator Casey.

Mr. DODD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. DODD. Mr. President, I just spoke with Senator Shelby on the phone. We have been working to reach agreement on the so-called too- big-to-fail sections of the bill. I spoke with him, and while he will be coming over shortly and we will have a vote on this early this afternoon, the leaders have to set the time, I presume, that after the respective lunches we will be able to vote on this and the Boxer amendment. I will leave it to the leaders before I make a unanimous consent request. I want to describe briefly to my colleagues what we have agreed on to, hopefully, resolve this matter of too big to fail. For over a year, Senator Shelby and I have been working on ways to end bailouts. We agree that ought to be done. We have had differences in other areas, but we have shared a commitment to ensure that taxpayers would never again be forced to bail out giant Wall Street firms that fail. Last November, I asked our colleagues from Virginia and Tennessee, Senator Warner and Senator Corker, to produce an agreement on how best to resolve failed companies. They did a tremendous job. I commend both of our colleagues. They worked hard, as did their staffs, to draft language as part of the underlying bill. The package they produced would create effective oversight for large firms and make these firms pay for the risks they pose to our economy and country. Their agreement put a mechanism in place to guarantee that when large firms fail, they fail. The management is fired, creditors and shareholders take losses, the company is liquidated, and taxpayers aren't on the hook. This is a complicated area, and a number of my colleagues on the other side had raised some reservations. So I spent the last few months working with Senator Shelby to clear up any misconceptions people may have had and otherwise address the concerns. After weeks of negotiations--and, really, months if you consider all of the work that has gone on over the last year--I am proud to say the two of us have an agreement in this area. We intend to offer it as an amendment to the bill early this afternoon. Let me go over the amendment, if I can. First, most of the provisions stay intact because we agree on the fundamentals of this bill. There will be an orderly liquidation mechanism for FDIC to unwind failing systemically significant financial companies. Second, shareholders and unsecured creditors will still bear losses, and management will be removed. Third, regulators will still have the authority to break up a company if it poses a grave threat to the financial stability of the United States. That is important. Large bank holding companies that have received TARP funds will still not be able to avoid Federal Reserve supervision by simply dropping their banks. Most large financial companies are still expected to be resolved through the bankruptcy process. The bill will continue to eliminate the ability of the Federal Reserve to prop up failed institutions such as AIG. These measures represent a fundamental change in our country's ability to protect taxpayers from the economic fallout of having a large, interconnected firm collapse. These measures will end the idea that any one company is too big to fail. These measures will prevent large failing firms from holding our country hostage, extorting giant taxpayer-funded bailouts under the threat of economic disaster. So, today, we announce a few changes to the larger package. First, as I have said, one of the ideas proposed by some of our colleagues, including our friends on the other side, was to create a fund, paid for in advance by the largest financial firms, to cover the cost of liquidating failed companies. This was not in my initial draft offered in November and was opposed by the Obama administration. Other Republicans have now expressed concerns about that prepaid fund because whether they pay in advance or after the fact, these costs will be paid by Wall Street, not the taxpayers. So I have no objection to dropping that provision. In fact, I was rather agnostic on it, as many of my colleagues were. We have the common goal to make sure taxpayers would not bear any costs. That is what we tried to achieve. There are a variety of ways of doing it. There were those who raised concerns about the prepayment program and raised the possibility, or the specter, or the optics that somehow they could be getting a preferred status. That was never the intent, but because people are concerned about the optics of it, we agreed to have a postpayment responsibility, or fund, that would be borne by creditors or the industry itself, based on whether there were enough assets in the failed institution to pick up the costs of winding down that firm that was failing. So that is where this comes from. Creditors will be required to pay back the government any amounts they received above what they would have gotten in liquidation. Those who directly benefited from the orderly liquidation will be the first to pay back the government at a premium rate. Congress must approve the use of debt guarantees. The Federal Reserve can only use its 13(3) emergency lending authority to help solvent companies. Regulators can ban culpable management and directors of failed firms from working in the financial sector. That is an add-on. It makes sense that if someone has been involved in the mismanagement of a company and caused this kind of disruption in the economy, then it requires that they would be banned from engaging in further economic activities. With this agreement, there can be no doubt that the Senate is unified in its commitment to end taxpayer-funded bailouts. There are some other provisions that I will run down very briefly: clawbacks of excess payments to creditors. This will allow, from creditors or the failed company, any payments that exceed what creditors otherwise would have received in liquidation. There is 100 percent taxpayer protection through assessments. It maintains the protections in the bill so if the assets in the failed company and clawbacks from creditors are not enough to pay back all the Treasury borrowing with interest, FDIC will charge assessments to large firms, a penalty interest rate. There is a time limit on receivership. Management gets paid last any salaries or other compensation owed executives. Failed companies are paid last after creditors. There is a ban on management from going to work in the financial sector. There is a judicial check in this amendment, IG review, which requires the inspector general and various agencies and Federal regulators to review actions taken under the orderly liquidation authority. Financial company definitions are included, reports and testimony on top of the requirements in the underlying bill, the FDIC will have additional reporting requirements and will have to testify before Congress. As I mentioned, the 13(3) lending restrictions are only applied to solvent companies, as well. A congressional approval of FDIC emergency debt guarantees is included in this package as well. So there are a number of provisions, all of which we think basically make sense. We never argued with these ideas at all and the idea of whether it is prepayment or postpayment was an argument that went back and forth without any strong objections. Many of us were trying to figure out the best way to do this so taxpayers would not be left on the hook. Obviously, I want to leave time for Senator Shelby who will come over to talk about it. I wanted to give my colleagues an idea of the agreement that I am prepared to support when Senator Shelby offers this as an amendment. I see my friend from New Hampshire on the Senate floor. I will be glad to share this information and the other parts of the bill with my colleagues. I yield the floor.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar No 350, S. 3111.

Mr. DODD. Mr. President, I ask unanimous consent that the committee- reported amendments be considered; that a Leahy-Cornyn amendment, which is at the desk, be agreed to; that the committee-reported amendments be agreed to; that the bill, as amended, be read a third time and passed, the motion to reconsider be laid upon the table, with no intervening action or debate, and that any statements relating to the bill be printed in the Record.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. Res. 514, submitted earlier today.

Mr. DODD. Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motions to reconsider be laid upon the table, with no intervening action or debate, and that any statements relating to the resolution be printed in the Record.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that when the Senate completes its business today, it adjourn until 9:30 a.m., Thursday, May 6; that following the prayer and the pledge, the Journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day, and the Senate resume consideration of S. 3217, Wall Street reform, as provided for under the previous order.

Mr. DODD

Mr. DODD. Mr. President, under the previous order, at 10 a.m., the Senate will proceed to vote in relation to the Tester-Hutchison amendment regarding insurance premiums.

Mr. DODD

Mr. DODD. If there is no further business to come before the Senate, I ask it adjourn under the previous order, following the remarks of Senator Mark Udall of Colorado.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the Homeland Security and Governmental Affairs Committee be discharged from further consideration of H.R. 5148, and the Senate proceed to its immediate consideration.

Mr. DODD. Mr. President, I ask unanimous consent that the bill be read a third time and passed, the motion to reconsider be laid upon the table, with no intervening action or debate, and that any statements relating to the bill be printed in the Record.