Christopher Dodd

Mr. DODD

Mr. DODD. Mr. President, first let me thank my colleague from Alabama, Senator Shelby. He makes it sound like Methuselah this morning referring to those years we have served together in the Senate, combined years of service. I have been a member of the Banking Committee since my first day as a Member of this body in January of 1981. I have served under and with a lot of different people on that committee, going back to Bill Proxmire of Wisconsin, who was the ranking Democrat in those days; Jake Garn, who was the chairman of the Banking Committee in 1981, the Senator from Utah. Over the years, Senator Riegle, Phil Gramm, and Paul Sarbanes, of course, chaired the committee, as well as, of course, Senator Shelby. This is an important moment for this body. We have a severe housing crisis in the country. I don't need to keep repeating that. All Members recognize it. When we go home and talk to our constituents, as we did over the last week or so, we see that this problem is not going away. We were hoping that somehow the market would be taking care of all of this and by now we would be seeing that proverbial light at the end of the tunnel, but the only light we see is the light of a train coming. Unless we act promptly, we are looking at a situation that will only get worse. Our legislation is not the salvation of every problem. I wish to make clear to my colleagues that what Senator Shelby and I and the other 19 members of our committee have done is to fashion some proposals that we think will make a significant contribution to the issue, maybe the most important one being a sense of optimism and confidence that this Congress of ours, despite the narrow margins that split us as two parties in this body, can actually work together to get something done. There is a growing fear in the country--in fact, more than growing-- that we are incapable of doing much here; that we can't seem to get much done because of the partisan divide. This bill argues strenuously against that conclusion. By a vote of 19 to 2, this committee marked up this piece of legislation. We have now been on the Senate floor debating this because of the very difficult parliamentary situation we are presented with as a result of what the House of Representatives sent us, so we have spent this much time on this legislation. However, I think we have a very good product reflected by the votes that have occurred over the last several weeks. I think the lowest vote total on any single proposal that has been either offered or suggested has been something like 77 votes, showing that an overwhelming majority of people are supporting this committee product, and we appreciate that as members of the Banking Committee. So this action is coming none too soon. Today the RealtyTrac reported that over 250,000 families went into foreclosure in the month of June. That is a 53-percent increase over last year. We all throw these statistics around rather easily in this Chamber, but numbers, while staggering, are faceless and nameless. Behind every one of these numbers, that 250,000, that 53-percent increase, is a mother, is a father, is a family, and children whose lives have been unalterably changed for the worse because they are going to lose their home. They are going to lose their home. Just imagine, if you will, those who have not been in that situation, what it would be like to wake up this morning and know that you have a foreclosure notice on your home, that you can't meet your obligations and you have to face your children, you have to face your spouse, you have to face your coworkers, and you have to find some other place to live. Mr. President, 250,000 people went through that in the month of June, 1,500,000 over the last year, and we are still here debating this bill and whether we can do anything to make a difference in people's lives. What is happening today is a tragedy, a significant tragedy for these people, for their neighbors, for their communities, and for our country. The cover story in this week's issue of Business Week is entitled ``The Home Price Abyss: Why the Threat of a Free Fall is Growing.'' I think the article sums up very well the threat we are trying to address with this legislation. Let me quote from it: The risk to the financial system and the economy is that the price drop, which is already horrifying, will start feeding on itself. It goes on to say: When home values fall low enough, hard-pressed homeowners become less able or less willing to keep paying their mortgages. That forces lenders to repossess homes and then dump them back on the market at fire sale prices, which depresses further the prices in those neighborhoods and leads to even more foreclosures. When we consider the role home equity has played in supporting consumer spending, we can see that this vicious cycle can create a disaster. We have already had hundreds of thousands of job losses and the like. I think we all recognize we have a responsibility to act. Today, we have an opportunity to pass the Housing and Economic Recovery Act of 2008, which will help us begin to address this crisis and the larger economic turmoil. I wish to add that we would have liked to have considered other amendments. Other colleagues had ideas to add to this bill. Because of a handful of Members who don't want any more consideration, we are forced into this situation. A number of amendments had been worked out between Democrats and Republicans, but we cannot even offer those. That is the situation. I regret that because there were some good ideas, frankly, that could have been added to the bill as it leaves here. But that is the situation. Candidly, we cannot wait longer, having gone weeks going through the parliamentary rigmarole on the floor of the Senate. I will sum up again the legislation we are about to pass and send on to the House. The bill establishes the Hopeful Homeowners Act to assist at least 400,000, maybe 500,000 families to keep their homes and stabilize their neighborhoods. It does so after asking both lenders and borrowers to make financial sacrifices. It does so at absolutely no cost to the taxpayer. It creates a new class of regulation for Fannie Mae and Freddie Mac. You can look in the Wall Street Journal of this morning if you doubt whether we should act or we can wait longer. The headline is: ``U.S. Mulls Future of Fannie, Freddie.'' If you think we ought to wait longer to try to get something better out of the bill, consider what we may have happen to these GSEs, which are critical to providing stability in the housing market. The world-class regulator, which is something we tried to do over the last 7 years, is finally done in this bill on a bipartisan basis. Recent news makes it clear these entities need a strong regulator to ensure they are viable and healthy institutions. The bill raises the loan limit from $417,000 to as high as $625,000, so the GSEs can play a more active role in stabilizing the housing market. I wish to point out that this loan limit is considerably higher than what was included in the committee-passed bill. Senator Shelby, to his credit, and I agreed to do this in an effort to accommodate the interest of the other body, the House. And also the people who live in higher cost States, the higher numbers will be important for them to get relief as well from the bill. Treasury Secretary Paulson said passing this legislation is the most important thing we can do to address the housing crisis. The bill modernizes the FHA program, raising the loan limit from $362,000 to $625,000. The FHA proved its value in the current crisis. It continues to be a stable source of mortgage credit, while many other lenders have failed. This bill will make sure FHA is available to even more American families. To give you some idea of how this affects people, by raising these limits to the $625,000 level from $417,000, we will now cover 85 percent of the American population and 98 percent of the counties in America. The other 2 percent are the very high-cost counties. My State has one of them, and several other States across the country do as well. But 85 percent of the American people are potentially covered by this bill, and 98 percent of the counties will be covered by the numbers we have raised from $417,000 to $625,000. When people tell you we are not reaching enough, we have reached about as far as you can reach if you are interested in helping those who may face more serious problems. The bill includes a permanent affordable housing fund, financed by Fannie Mae and Freddie Mac, that will provide tens of thousands of affordable housing units in the future. Let me say, about this part of the bill, the GSE reform will be long lasting and important. The HOPE for Homeowners Act is temporary; it doesn't exist after 3 or 4 years. Maybe the most important thing we will do is the affordable housing issue in this bill. No new tax money required. The money will come out of the GSEs. We know, as a matter of fact, that we have built very few affordable housing units in this country over the last number of years. And particularly those people losing their homes will have a hard time finding rental units. This is a permanent bill on affordable housing, and there is a means to pay for it without adding to the taxpayers' costs. It is one of the most important long-lasting features of the bill. In the long term, that bill will make a huge difference for millions of people. Seventeen million people today spend half their disposable income on their houses. If you are on SSI, in fact, housing costs exceed the monthly benefits you get today under SSI. For millions of people in this country, that affordable housing provision can be very important in the long term. The bill includes a new protection for elderly homeowners taking out FHA-insured reverse mortgages so they are not deceived into using the proceeds from the loans to buy expensive and needless insurance products. These are provisions that were incorporated by Senator McCaskill, and we thank her for it. There is a new mortgage broker and lender licensing requirement that was added by Senator Martinez and supported by Senator Feinstein from California. That will begin to address many of the abuses of the mortgage process that have been perpetrated by brokers. In addition, the bill includes improved disclosure requirements that were added by Senator Reed of Rhode Island and Senator Bond of Missouri as well. Because of the effort of Senators Kerry, Coleman, Akaka, Cornyn, and Sanders, the bill expands the availability of VA housing programs. It includes a number of provisions to help returning veterans save their homes from foreclosure and provides new housing benefits to disabled vets as well. In an amendment adopted on the floor prior to the recess, we added language by Senator Kohl of Wisconsin to create protections against foreclosure scams, and we reduced paperwork burdens on certain small public housing authorities, thanks to the amendment by Senator Sununu. This legislation includes $3.9 billion in emergency community development block grant funds. This is a controversial provision. I know some Members have raised concerns about it. I think all of us recognize that when we talk about a national crisis, with problems of foreclosures having a devastating effect in our States, obviously, resources locally, with property taxes declining for police and fire, and the like, our mayors and county officers are finding themselves further hard-strapped to meet their obligations. We thought an infusion of community development block grant money, targeted specifically to those communities that face high foreclosure rates, would be of benefit to them to help them rehabilitate their communities and the foreclosed homes and get them back on the market. This is still in the bill. I have been warned by Members of the other body that this provision will have to come out. I know some Members want to strike it. It is going to stay in the bill that is going to the other body. They object to it because they don't have a pay-for in it, and we do here. We call it emergency funding, as we do when we have hurricanes or other natural disasters occurring. This is similar to a natural disaster. If you are one of those 250,000 families who, in the month of June, lost their homes--whether by flood or by hurricane, believe me, it is a disaster. They lost it because they got lured into deals they could not afford or because there was a scam or deceptive practices going on. Don't try to tell that family they have not faced a disaster. It is not a natural one, but nonetheless it is a disaster. The idea that we cannot provide additional funding to mayors and county executives to help out communities is something I am troubled by. It may come out of the bill when it comes back. I urge them to look hard at this and try to find a funding source. I ask unanimous consent for an additional 5 or 10 minutes.

Mr. DODD. I will yield that time to my colleague from New Jersey.

Mr. DODD

Mr. DODD. Mr. President, I will speak on another matter, if I may, but first I thank my colleague from Colorado for his kind comments about the efforts we made on the housing bill. I thank him for his observations about his own State and what is going on there with the people in the western part of our country. This issue is a national problem. I think there are occasions when people assume this is a localized issue in a few spots in the Nation. Unfortunately, we have all learned, painfully, with more and more news that comes out that this problem is in every State; in some, it is far more pronounced. In my State, we have had about 15,000 foreclosures, and another 12,000 are anticipated this year--in a State of 3 million people. Home values have come down. I appreciate the Senator's comments about what is going on and his appreciation of what we are trying to do with this bill. Every single day, between 8,000 and 9,000 people file for foreclosure. In the month of June, 250,000 people moved into that category. Those are the numbers. As I said this morning, those are families--a mother, father, and maybe children--who have to find alternative living conditions because they are about to lose their homes. Think about that on an individual basis, what it means, and the fact that we have had to take so long on this bill that could have been, frankly, passed a week or more ago. Colleagues on both sides of the political aisle have expressed strong support for our efforts. A handful of people here have slowed this down and done everything in their power to derail this effort. This morning's vote of 84 to 12 once again indicates the strong desire by most of us here to get something done on this issue. I thank my colleague for his generous comments and help in this effort.

Mr. DODD

Mr. DODD. Mr. President, my friend and colleague from Michigan is here, as well, who has been deeply involved in the issue of credit cards and the problems that are occurring. I rise with my colleague Senator Levin to introduce legislation that would reform and prohibit credit card practices that harm rather than help American consumers and their families. The legislation is called the Credit Card Accountability, Responsibility and Disclosure Act, or the Credit CARD Act. It will, in my view, help bring an end to industry practices that candidly cost American families billions of dollars each and every year. I cannot think of a better time to introduce this much needed legislation. This Chamber will, in very short order this evening, or as late as tomorrow, pass legislation to address the most important issue confronting our Nation's economy and the financial stability of our citizens--the collapse of the subprime housing market and the credit crisis it has brought about. Unfortunately, far too many American families who are already being squeezed by the rising cost of food, oil, and gas, now find themselves forced to rely on short-term, high-interest credit card debt to finance life's daily necessities--including their mortgage payments--because of the ongoing credit crisis and a weak economy. That growing reliance was highlighted in a report released last week by the Federal Reserve. The Fed's study reported that in May, revolving consumer debt, which is primarily credit card debt, reached an all-time record high of slightly over $961 billion. That is a 7-percent increase in the last month alone, which is on top of a 7-percent increase last year, and a 6-percent increase in 2006. At this rate, revolving consumer debt in our country, which is again primarily credit card debt, will reach $1 trillion by the Christmas season of this year. When I assumed the gavel of the Senate Banking Committee last January, one of the very first hearings I held was on the issue of credit card practices. At that hearing, I challenged card issuers, banks, and associations to stop engaging in practices that they were not prepared to defend before the committee. It was my hope that the hearing and that warning would encourage the credit card industry to go through a period of intense self- examination. I had hoped the industry would scrutinize its practices and policies to ensure that credit was extended in the fairest and most transparent of terms to credit card customers. To be fair, some in the industry heeded that call. I applaud them and thank them for their efforts. Over the past year, a few credit card companies have voluntarily made changes to the way they do business, and many Americans have benefitted from those improvements. Regrettably, however, far too few embraced this call. Even more regrettably, some that have made voluntary changes are reconsidering those steps in the face of mounting pressure to find new streams of revenue and capital, and to compete in a market where other industry participants are not engaging in these reforms, as their subprime mortgage market-related losses continue to rise. The temptation to go back to older practices to increase revenue streams is there. Unfortunately, the use of confusing, misleading, and very predatory practices, in some cases, appears likely to remain the standard operating procedure for many in the credit card industry for the foreseeable future if we fail to act. The list of these troubling practices is lengthy: Charging predatory rates and fees; engaging in deceptive marketing to young people; practices such as universal default; double-cycle billing; retroactive interest rate increases; ``any time, any reason'' repricing; and billings shenanigans--like shortening the period consumers have to pay their bills, or charging fees for payment by telephone--are just a few of the practices that could merit induction into a fairly crowded industry ``hall of shame.'' Even the financial regulators, whom I have been openly critical of for lack of appropriate oversight and response throughout the subprime mortgage market crisis, have recognized the harm these sinister practices pose not only to credit card customers but to our economy as well. In May of this year, the Federal Reserve, the Office of Thrift Supervision, and the National Credit Union Administration proposed rules aimed at curbing some of the very practices I have identified. In my view, this joint rulemaking is an important step in providing needed consumer protections in some areas, including a ban on retroactive interest rates and rules on payment allocation. But the proposed rules fall far short in other important areas--failing to address issues including universal default, ``any time, any reason'' repricing, multiple over-limit fees, and youth marketing. These shortcomings underscore the need for the legislation Senator Levin and I will be talking about this evening. I want to make it very clear--and I know my colleague feels the same way--that we are not opposed to credit cards. They are very valuable, very useful tools for consumers. So this bill is not designed in any way to deprive consumers of the use of credit cards. That is not the issue. When provided on fair terms, and used wisely and responsibly, credit cards are a valuable financial tool for millions of our fellow citizens. They can help an individual to build his or her credit history and to better pursue his or her financial goal. But like many credit products, credit cards pose the potential to harm consumers as well as help consumers. Card companies have been far too apt to exploit the needs of consumers who are increasingly becoming ``hooked on plastic.'' That potential to harm consumers has grown in recent years as credit card usage has risen. Let me share some numbers with you to give you some idea of what has happened in this explosion of credit card usage by Americans. Today, nearly 75 percent of American households have a credit card or a debit card, and 700 million credit cards are used to purchase in excess of $2.4 trillion in goods and services from over 7 million locations in the United States annually. In 1970, only about 16 percent of U.S. households used credit cards, and fewer than a million businesses accepted them. As Americans have become increasingly reliant on credit cards, credit card companies have become more and more innovative in finding ways to access their customers. Over $17 billion in credit card penalty fees have been charged to the American people--new fees--in the last 2 years, since 2006. That is a tenfold increase from what was charged 10 years ago. That is $17 billion in new penalties and fees since 2006. Credit card companies are turning to innovative ways to profit-- including at the gasoline pump. They are laying on fees to gas station owners for each credit card transaction made at the pump. At the very time they are watching the price of gasoline skyrocket, the credit card companies are gouging the people struggling to meet those fees. Again, card companies are laying on fees to gas station owners for each credit card transaction made at the pump--a charge that those owners immediately pass on to customers, increasing the cost of gas for drivers. In some places, these fees can add an average of 3 percent for each gasoline transaction. The combination of the growing needs for revolving debt and hidden fees charged by card companies is contributing to the avalanche of debt under which American consumers increasingly find themselves buried. Listen to this number, because this is the one that is stunning. To give you an idea of what has happened to the average family in this country with credit card balances, today the average household that carries a credit card balance owes close to $10,000 in revolving debt on their credit cards. The average family has a balance of $10,000 in revolving debt on their credit cards. That is a millstone around the neck of the average American and their families--families that are already struggling to make ends meet and are under pressure from rising gas prices, food prices, skyrocketing health care costs, and a mortgage crisis that has robbed many families of their home equity or, worse yet, their homes. That is why we are introducing the Credit CARD Act. This bill will help reform credit card practices that drag so many American families further and further into debt. It strengthens regulation and oversight of the credit card industry and prohibits the unfair and deceptive practices that in far too many instances work to harm, not help, a consumer's efforts to move up the economic ladder. Specifically, the CARD Act would prohibit the worst of the industry's practices, including imposition of excessive fees; retroactive rate increases; universal default; ``any time, any reason'' changes to credit card agreements; and unfair payment allocation. The bill also, importantly, contains a number of provisions aimed at protecting young consumers. This legislation builds on legislation I have introduced in previous Congresses. It also incorporates several key concepts included in the legislative proposals put forth by some of my colleagues, notably my colleague from Michigan, Senator Levin, and Senators Menendez, McCaskill, and Obama. Each is an important cosponsor of this legislation, as are Senators Reed of Rhode Island, Akaka, Tester, Clinton, Kerry, Sanders, Whitehouse, and Casey. This bill also has the support of a wide array of consumer advocates and labor organizations, including the Consumer Federation of America, Consumers Union, National Consumer Law Center, the National Council of La Raza, Service Employees International Union, the Center for Responsible Lending, U.S. PRIG, Consumer Action, Demos, Connecticut PRIG, and the National Association of Consumer Advocates. As policymakers, we should expect consumers will act responsibly when it comes to using credit cards, and that should be an important point to make. But we also expect no less when it comes to companies that issue these cards. They need to act responsibly, and they are not, in my view. The Credit CARD Act will help strike the correct balance of responsibility between credit card users and the card issuers. And by striking that balance, it will help provide American consumers with a fair chance to secure economic security for them and their families. I thank Senator Levin and others--especially Senator Levin who already held hearings on this issue. We have talked about this at length over the years. We tried in other Congresses with very modest proposals to deal with some of these problems. We have always lost those battles. But I think the American consumers, regardless of their income, regardless of their social or economic status, feel very angry about what is happening to them. As a result, I think there is a growing opportunity for us to get something done on this issue. So while our focus today has been on foreclosure issues, the credit card problem in this country that so many Americans are facing is one that I think is ripe for congressional action. Our hope and intention is to bring a bill to the floor of this Chamber before we adjourn for the year to give our colleagues a chance to express themselves on this issue. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. DODD. I thank my colleague.

Mr. DODD

Mr. DODD. Mr. President, my friend and colleague from Michigan is here, as well, who has been deeply involved in the issue of credit cards and the problems that are occurring. I rise with my colleague Senator Levin to introduce legislation that would reform and prohibit credit card practices that harm rather than help American consumers and their families. The legislation is called the Credit Card Accountability, Responsibility and Disclosure Act, or the Credit CARD Act. It will, in my view, help bring an end to industry practices that candidly cost American families billions of dollars each and every year. I cannot think of a better time to introduce this much needed legislation. This Chamber will, in very short order this evening, or as late as tomorrow, pass legislation to address the most important issue confronting our Nation's economy and the financial stability of our citizens--the collapse of the subprime housing market and the credit crisis it has brought about. Unfortunately, far too many American families who are already being squeezed by the rising cost of food, oil, and gas, now find themselves forced to rely on short-term, high-interest credit card debt to finance life's daily necessities--including their mortgage payments--because of the ongoing credit crisis and a weak economy. That growing reliance was highlighted in a report released last week by the Federal Reserve. The Fed's study reported that in May, revolving consumer debt, which is primarily credit card debt, reached an all-time record high of slightly over $961 billion. That is a 7-percent increase in the last month alone, which is on top of a 7-percent increase last year, and a 6-percent increase in 2006. At this rate, revolving consumer debt in our country, which is again primarily credit card debt, will reach $1 trillion by the Christmas season of this year. When I assumed the gavel of the Senate Banking Committee last January, one of the very first hearings I held was on the issue of credit card practices. At that hearing, I challenged card issuers, banks, and associations to stop engaging in practices that they were not prepared to defend before the committee. It was my hope that the hearing and that warning would encourage the credit card industry to go through a period of intense self- examination. I had hoped the industry would scrutinize its practices and policies to ensure that credit was extended in the fairest and most transparent of terms to credit card customers. To be fair, some in the industry heeded that call. I applaud them and thank them for their efforts. Over the past year, a few credit card companies have voluntarily made changes to the way they do business, and many Americans have benefitted from those improvements. Regrettably, however, far too few embraced this call. Even more regrettably, some that have made voluntary changes are reconsidering those steps in the face of mounting pressure to find new streams of revenue and capital, and to compete in a market where other industry participants are not engaging in these reforms, as their subprime mortgage market-related losses continue to rise. The temptation to go back to older practices to increase revenue streams is there. Unfortunately, the use of confusing, misleading, and very predatory practices, in some cases, appears likely to remain the standard operating procedure for many in the credit card industry for the foreseeable future if we fail to act. The list of these troubling practices is lengthy: Charging predatory rates and fees; engaging in deceptive marketing to young people; practices such as universal default; double-cycle billing; retroactive interest rate increases; ``any time, any reason'' repricing; and billings shenanigans--like shortening the period consumers have to pay their bills, or charging fees for payment by telephone--are just a few of the practices that could merit induction into a fairly crowded industry ``hall of shame.'' Even the financial regulators, whom I have been openly critical of for lack of appropriate oversight and response throughout the subprime mortgage market crisis, have recognized the harm these sinister practices pose not only to credit card customers but to our economy as well. In May of this year, the Federal Reserve, the Office of Thrift Supervision, and the National Credit Union Administration proposed rules aimed at curbing some of the very practices I have identified. In my view, this joint rulemaking is an important step in providing needed consumer protections in some areas, including a ban on retroactive interest rates and rules on payment allocation. But the proposed rules fall far short in other important areas--failing to address issues including universal default, ``any time, any reason'' repricing, multiple over-limit fees, and youth marketing. These shortcomings underscore the need for the legislation Senator Levin and I will be talking about this evening. I want to make it very clear--and I know my colleague feels the same way--that we are not opposed to credit cards. They are very valuable, very useful tools for consumers. So this bill is not designed in any way to deprive consumers of the use of credit cards. That is not the issue. When provided on fair terms, and used wisely and responsibly, credit cards are a valuable financial tool for millions of our fellow citizens. They can help an individual to build his or her credit history and to better pursue his or her financial goal. But like many credit products, credit cards pose the potential to harm consumers as well as help consumers. Card companies have been far too apt to exploit the needs of consumers who are increasingly becoming ``hooked on plastic.'' That potential to harm consumers has grown in recent years as credit card usage has risen. Let me share some numbers with you to give you some idea of what has happened in this explosion of credit card usage by Americans. Today, nearly 75 percent of American households have a credit card or a debit card, and 700 million credit cards are used to purchase in excess of $2.4 trillion in goods and services from over 7 million locations in the United States annually. In 1970, only about 16 percent of U.S. households used credit cards, and fewer than a million businesses accepted them. As Americans have become increasingly reliant on credit cards, credit card companies have become more and more innovative in finding ways to access their customers. Over $17 billion in credit card penalty fees have been charged to the American people--new fees--in the last 2 years, since 2006. That is a tenfold increase from what was charged 10 years ago. That is $17 billion in new penalties and fees since 2006. Credit card companies are turning to innovative ways to profit-- including at the gasoline pump. They are laying on fees to gas station owners for each credit card transaction made at the pump. At the very time they are watching the price of gasoline skyrocket, the credit card companies are gouging the people struggling to meet those fees. Again, card companies are laying on fees to gas station owners for each credit card transaction made at the pump--a charge that those owners immediately pass on to customers, increasing the cost of gas for drivers. In some places, these fees can add an average of 3 percent for each gasoline transaction. The combination of the growing needs for revolving debt and hidden fees charged by card companies is contributing to the avalanche of debt under which American consumers increasingly find themselves buried. Listen to this number, because this is the one that is stunning. To give you an idea of what has happened to the average family in this country with credit card balances, today the average household that carries a credit card balance owes close to $10,000 in revolving debt on their credit cards. The average family has a balance of $10,000 in revolving debt on their credit cards. That is a millstone around the neck of the average American and their families--families that are already struggling to make ends meet and are under pressure from rising gas prices, food prices, skyrocketing health care costs, and a mortgage crisis that has robbed many families of their home equity or, worse yet, their homes. That is why we are introducing the Credit CARD Act. This bill will help reform credit card practices that drag so many American families further and further into debt. It strengthens regulation and oversight of the credit card industry and prohibits the unfair and deceptive practices that in far too many instances work to harm, not help, a consumer's efforts to move up the economic ladder. Specifically, the CARD Act would prohibit the worst of the industry's practices, including imposition of excessive fees; retroactive rate increases; universal default; ``any time, any reason'' changes to credit card agreements; and unfair payment allocation. The bill also, importantly, contains a number of provisions aimed at protecting young consumers. This legislation builds on legislation I have introduced in previous Congresses. It also incorporates several key concepts included in the legislative proposals put forth by some of my colleagues, notably my colleague from Michigan, Senator Levin, and Senators Menendez, McCaskill, and Obama. Each is an important cosponsor of this legislation, as are Senators Reed of Rhode Island, Akaka, Tester, Clinton, Kerry, Sanders, Whitehouse, and Casey. This bill also has the support of a wide array of consumer advocates and labor organizations, including the Consumer Federation of America, Consumers Union, National Consumer Law Center, the National Council of La Raza, Service Employees International Union, the Center for Responsible Lending, U.S. PRIG, Consumer Action, Demos, Connecticut PRIG, and the National Association of Consumer Advocates. As policymakers, we should expect consumers will act responsibly when it comes to using credit cards, and that should be an important point to make. But we also expect no less when it comes to companies that issue these cards. They need to act responsibly, and they are not, in my view. The Credit CARD Act will help strike the correct balance of responsibility between credit card users and the card issuers. And by striking that balance, it will help provide American consumers with a fair chance to secure economic security for them and their families. I thank Senator Levin and others--especially Senator Levin who already held hearings on this issue. We have talked about this at length over the years. We tried in other Congresses with very modest proposals to deal with some of these problems. We have always lost those battles. But I think the American consumers, regardless of their income, regardless of their social or economic status, feel very angry about what is happening to them. As a result, I think there is a growing opportunity for us to get something done on this issue. So while our focus today has been on foreclosure issues, the credit card problem in this country that so many Americans are facing is one that I think is ripe for congressional action. Our hope and intention is to bring a bill to the floor of this Chamber before we adjourn for the year to give our colleagues a chance to express themselves on this issue. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. DODD. I thank my colleague.

Mr. DODD

Mr. DODD. Mr. President, let me first, as I did last evening, begin by commending our colleague from West Virginia, Senator Rockefeller, who has the unenviable task of chairing the Intelligence Committee, a complex committee with very serious issues before it. Whatever differences we have should not in any way suggest a lack of appreciation for what he and his staff and others do to try and bring forth legislation to allow us to balance the needs of our security as well as our rights as citizens. It is that very question which draws me to this amendment I offered which will be subject to a vote in a few minutes. This is a debate that has gone on for the last 7 months, beginning with the Judiciary Committee's reports of last fall, a debate last December and that continued into January and has been going all winter and spring and about to be culminated with the decisions we are about to make over the next hour or so, including the amendment being offered by Senator Specter and Senator Bingaman, both amendments I intend to support. The amendment I have offered, along with Senator Feingold and a number of our colleagues, simply strikes title II of this bill. Title II of this bill is the title that grants retroactive immunity to the telecommunications industry. The facts are very clear. The telecommunications industry, based on some documents, possibly a letter or others, decided it was appropriate for them to gather virtually all the e-mails, telephone conversations, and the like, of millions and millions of Americans, over a period of 5 or 6 years in the wake of 9/11. As I said repeatedly, had this gone on a month or a year or so, I would not have raised objections, given the emotion surrounding the attack on our country. But this program, I suggest, would still be ongoing had it not been for a whistleblower who helped identify the program. This is not an issue of whether we disagree at all with revising the Foreign Intelligence Surveillance Act to comply with the needs as our enemies gather more sophisticated means by which they can do us harm. It is the age-old question which has confronted this Republic of ours for 232 years. And that is: How do we balance security with simultaneously protecting the rights under our Constitution? Every generation who has preceded us has wrestled with this question. The one issue we do not subscribe to is the notion that to be more secure, you have to give up rights. That is a fundamentally flawed idea. Every generation who has suggested and adopted it has regretted it in one case after another. Whether it was internment of Japanese Americans out of fear and other such cases, in every instance when we abandoned rights for security, we have come to regret it deeply. I come, again, to offer this idea to allow the judiciary to do their job. That is what they exist for, that is why the Founders created three coequal branches of Government--the executive, legislative, and judicial branches. We are not deciding the case. We are merely saying the courts ought to do that. Retroactive immunity for companies that may have broken the law may well soon become the law. That is the danger. As certain as it appears the outcome of the votes will be, equally certain, in my view, is that this matter will not end today regardless of what we do. This will end up in the courts, and there, not only the wisdom of granting retroactive immunity to these companies will be questioned but the constitutionality of that decision. I have spoken at length about this legislation. It subjugates the role of the courts. But even as this body moves forward with this bill, opponents of retroactive immunity can take some solace in knowing it will still ultimately be the judiciary that decides the constitutionality of this action, as the Framers intended. I can hardly see how it would have passed muster with our Founders. It was, after all, James Madison who said: I believe there are more instances of the abridgment of the freedom of the people by gradual and silent encroachments of those in power than by violent and sudden usurpations. He spoke those words at the Virginia Convention to ratify the U.S. Constitution. I can hardly see how men who did not simply utter such sentiments, but rather sacrificed everything in the name of them, could have envisioned America ceding her hard-fought liberty in a moment of fear or weakness. Is this bill constitutional? This is not for me or any one of us to decide. I am not a judge. None of us are. We are not a jury in this case. None of us are. We are Senators who treasure the document we have sworn to uphold. I have kept a copy with me every day, going back the 27 years I have served in this body. What is for this body is to decide how we best safeguard our Nation's security. Greater security for our citizens is what, of course, all of us want from this bill. But if we have learned anything from this administration, it is that there is a right way to protect our Nation and a wrong way. We learned that when even those of us in this body act with the best of intentions, we can still do lasting damage because we are not acting with foresight and prudence but with an impulsiveness and, in too many cases, out of fear. No one doubts for a moment the gravity of the threats we face or continue to face. No one suggests we do not have an obligation to monitor terrorists' communications with the utmost of vigilance. I wish to make sure the Government has every tool it needs to do so. I have no interest whatsoever in denying our Government what it needs to make our country safe. I want our President to have the capabilities to stop terrorists before they act, before they inflict harm on our country, our communities, and our families. I think we can and must do that in a way that balances national security with our rights and liberties. But for reasons I have described at length in previous debates, this so-called compromise strikes no balance at all, in my view. Let us be very clear, the courts have continuously shown an ability to handle cases with sensitive security issues. Chief Judge Vaughn Walker, a Ronald Reagan appointee to the District Court to the Northern District of California, who has virtually overseen all the cases challenging the NSA's warrantless wiretapping program, demonstrated this once again. In a case against the Government, Judge Walker recently ruled ``FISA preempts the state secrets privilege in connection with electronic surveillance for intelligence purposes . . . '' This ruling suggests that in suits against the telecommunications companies, they will be able to defend themselves and not be hamstrung by the state secrets privilege. At the very least, this decision highlights how premature it would be for Congress to grant retroactive immunity at this time. The sum and substance of our argument is very simply this: Now is not the time to close the courthouse doors on this issue. I cannot say it enough. My trust remains in the courts in cases argued openly and judges presiding over them and juries of American citizens who decide them. Our courts should be a source of our pride, not our embarrassment. They deserve the chance to do the job the Framers intended them to do. As complex, as diverse, as relentless as the assault on the rule of law has been, our answer to it is a simple one. Far more than any President's lawlessness, the American way of justice remains deeply rooted in our character as a people that no President can disturb. That is why, even on this day, I remain full of hope and faith that we can unite security and justice because we already have over the generations. I harbor no illusions about what is about to happen with this legislation or its consequences. But even as this long fight draws to a close, it is worth pausing for a moment to recognize those who have joined us in writing its many chapters. They have not been written by any one hand alone. Senator Russ Feingold of Wisconsin has fought this battle with me from the very beginning. His leadership has been articulate, his commitment unwavering and unyielding. The Senator from Vermont, Mr. Leahy, the chairman of the Judiciary Committee, fought valiantly to bring the Senate Judiciary Committee version of this bill that he crafted to the floor of this body. He has been a staunch opponent of retroactive immunity. The majority leader, Harry Reid of Nevada, has stood with us on this fight. I thank him for it as well. It has not been easy to have been the majority leader taking the position he has and also managing this bill to move forward. Even as he fought and sought to balance his personal opposition to retroactive immunity with his responsibility to move this legislation as leader, he has given us every opportunity to speak out against this legislation. He has worked hard to make sure the world's foremost deliberative body, as it is often called, would, indeed, be given a chance to deliberate over a matter that goes to the very core of who we are as a republic. In Congresses past, I cannot say, with certainty, that my colleagues and I would have been afforded the opportunity the majority leader has given each and every one of us, and I thank him for it. Lastly, I thank the thousands who joined with us in this fight around the country, those who took to the blogs, gathered signatures for online petitions, created a movement behind the issue, men and women, young and old, who stood up, spoke out, and gave us the strength to carry on in this fight. Not one of them had to be involved, but they chose to be involved for one reason and one reason alone: their deep love for this country, the Constitution, and its liberties. They remind that the silent encroachment of those in power, as Madison spoke of, can, in fact, be heard if only we are willing to listen. All of us, my colleagues and citizens around the country, share a fundamental belief in our Constitution. We believe our constitution isn't incidental to our security, rather it is its very foundation. This notion that it is the rule of law that keeps us safe should not be controversial. There should not be a partisan divide. I take no backseat, as no one does, when it comes to protecting America's safety and security. But if history has taught us anything, it simply doesn't require sacrificing our freedoms to do that. I do not believe history will judge this President kindly for his contempt of the rule of law. But will history be any kinder to those of us who have served as these transgressions have occurred on our watch? I have two young daughters. Their generation is going to ask their parents and grandparents some very pointed questions: Where were you when the President asked you to repudiate the Geneva Conventions and strip away the rights of habeas corpus? Where were you when stories of secret prisons and outsourced torture first began to surface and then became impossible to deny? And of today, they will ask: Where were you when Congress was persuaded to shield wealthy corporations that may well have knowingly acted outside of the law to spy on our fellow citizens? Where were we in that debate? History will not forget. It will not forget our role in any of this. And just as surely as subsequent generations will ask all of us those questions, what will be clear is that we will have failed to ask ourselves one very fundamental question: Does America stand for the rule of law or for the rule of men? That question never goes away. It has been the same question asked for more than two centuries. It has been with us, of course, these past 7 years in very strong and poignant ways. It will haunt us long after this bill passes, long after this administration recedes into history, long after we all have passed into history ourselves. Indeed, generations of leaders and free societies have struggled to answer the question for thousands of years. That is the question every generation must answer for themselves. It is a battle for the American soul, waged between our better angels and our worst fears. Our Founders answered the question correctly. I ask the question: Will we? Mr. President, allow me to close with one of my favorite quotations, one I have recited many times on the floor of this Chamber. It is from Justice Robert Jackson's opening statement at the Nuremberg trials in the summer of July of 1945. He said . . . That four great nations, flushed with victory and stung with injury, stay the hand of vengeance by voluntarily submitting their captive enemies to the judgment of the law is one of the most significant tributes that Power has ever paid to Reason. The tribute that Power owes to Reason is as clear today as it was when those words were spoken more than half a century ago. That America stands for a transcendent idea; the idea that laws should rule, not men; the idea that the Constitution does not get suspended for vengeance; the idea that when this Nation begins to tailor its eternal principles to the conflict of the moment, it risks walking in the footsteps of the very enemies we despise. As Margaret Thatcher said: ``When law ends, tyranny begins.'' Today, let us pay the tribute that Power owes to Reason today--in this moment, with these votes. I implore my colleagues to vote against retroactive immunity, against cloture, and above all, for the rule of law. Mr. President, I yield the floor.

Mr. DODD. There is 2 minutes equally divided?

Mr. DODD. Mr. President, this has been a long debate. It started last fall. Again, let me commend the two members here, the chair and ranking member of the committee. I respect their efforts. But my friend from Missouri has made my case. This is a matter for the courts to decide, not for the legislative branch to decide. It is why we have three coequal branches of Government. It is not our business as a juror and judge to determine the legality of what occurred here. This much we do know through published reports: Since 1978, 18,748 requests for warrants from the FISA Court have been granted; 5 have been rejected. Why did this administration not proceed with the normal course of events here and seek justification and legal authority for the vacuuming up of private information of American citizens? All of us here want our agencies to do everything they can to protect our security. But all of us equally care about the liberties of our country. The false dichotomy that is being suggested by what is in this bill, that in order to be more secure we have to give up rights, is a dangerous dichotomy. It is a false choice. Previous generations have made it. We should not. Let's strike this title, allow the courts to determine whether what occurred was legal and then proceed. Some of the companies did not do what others did because they felt it was not legal, what they were being asked to perform. Clearly there was some doubt in the minds of people as to justification. So I happen to believe the best way to proceed, as did Judge Walker, appointed by Ronald Reagan to the district court which has handled most of these NSA cases in the past, that the secret privilege will be protected, the court can do its job and determine the legality here. It is not the place for the Senate to act as the judicial branch of Government. That is why the Founders created three coequal branches of Government. That is what the issue is, the rule of law or the rule of men. That is what this amendment does by striking this title and allowing these matters to go before the court. I urge the adoption of the amendment.

Mr. DODD

Mr. DODD. Madam President, I rise in support of this legislation and want to thank the senior Senator from Montana for his leadership and commitment to ensuring a strong Medicare Program. Medicare is one of the twin pillars of the retirement security compact we have with our seniors. It says that after a lifetime of hard work and paying taxes, seniors deserve the dignity of a secure retirement. That includes quality, accessible health care. At a time of skyrocketing health care and prescription drug costs, this bill strengthens our commitment to our seniors by eliminating the scheduled 10.6 percent fee cut for Medicare physicians while providing a 1.1- percent update in payments. Why is that so important, Mr. President? Because it directly impacts how we care for seniors. Because doctors are already facing this payment cut because we were prevented from acting on this legislation before recess. Because my State of Connecticut could be looking at a loss of $190 million over the next 18 months--funds that would otherwise help pay for the care of elderly and disabled patients. Nearly a half million seniors in my State alone would be affected. And because military families will also benefit from this bill because they rely on TRICARE which ties its payments to Medicare. Indeed, absent this action, we could be putting at risk health care for not only military retirees but even for those on Active Duty. For all they have given to this country, we absolutely cannot let that happen. More than 50,000 TRICARE patients in Connecticut alone are depending on us. There are other components of this bill I strongly support as well. Included among the $4 billion in improvements for Medicare beneficiaries is assistance for low-income seniors, who need this assistance the most. This legislation also protects access to therapy services, reduces out-of-pocket costs for beneficiaries who seek mental health care, and provides important improvements for our Nation's pharmacies and rural providers. Ultimately, this legislation sends a message to our seniors and those who serve our country--it says that a promise made will be a promise kept. With this bill, we are keeping our word to these men and women that there is no higher priority than ensuring our seniors and military families receive the quality health care they deserve. Lastly, it is particularly appropriate that we move to deepen our commitment to Medicare on the day one of its biggest champions returns to the Senate. Throughout our history, there has been no greater advocate for our seniors and for health care than Senator Kennedy. He is a friend to me, but more importantly he is a friend to every American who struggles to receive the affordable, quality health care they deserve, and we are thrilled to welcome him back. Again, I want to thank Chairman Baucus as well as the majority leader for their leadership and dedication.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the tributes to Senator Helms in the Congressional Record be printed as a Senate document and that Senators be permitted to submit statements for inclusion until August 1.

Mr. DODD

Mr. DODD. Mr. President, before the Majority Leader leaves the floor, I thank him personally but also collectively for his leadership on this issue. This is an act of courage on his behalf, given the arguments made by the other side, and his leadership on this created the possibility for us to offer this amendment to strike title II. I share his thoughts. He expressed them very well. I wish to identify myself with them. This is not at all about questioning the need for security. We all understand that. This is a simple question. Should the telecom industry be granted immunity, without us being able to determine whether their actions are legal? It may come out that the courts determine they were legal. If so, we move forward. All we are asking is that the opportunity be given to determine the legality of their actions. The majority leader has made it clear why it is important. This is about the Constitution and the rule of law. It seems to me a very simple request and, as such, I ask unanimous consent to lay the pending amendment aside and call up amendment No. 5064.

Mr. DODD. Mr. President, it is very simple. Strike that section of the bill that grants immunity to a number of telecommunications companies that, for a period of roughly 5 or 6 years, literally vacuumed up phone conversations, faxes, e-mails, photographs, on a wholesale basis, of virtually every American citizen. The only reason it has come to a halt is because there was a whistleblower who identified the program. Otherwise the program would be ongoing. Again, none of us argue, at least I don't argue at all, about the importance of having the ability to get the cooperation of an industry that could help us identify those who would do us harm. That is not the debate. The debate is whether there is an appropriate means by which those warrants are sought before these telecom companies would begin to turn over the private conversations, e-mails, and communications of American citizens. That is what this debate is about. It is a simple debate on whether we keep this section of the bill or strike it out and allow the judicial branch, a coequal branch of Government, to determine whether the acts by the executive branch were constitutional and if they were they legal. If this amendment is not adopted, it will be a vote by the legislative body that determines whether they were legal. We are not competent or the appropriate constitutionally delegated body to perform that function. That is why we have three coequal branches of Government. The executive branch made this decision. We in the legislative branch have an obligation to insist that the judicial branch determine the legality of the actions taken. I wish to thank as well my colleague, Senator Feingold of Wisconsin, my lead cosponsor, but also to mention, if I may, Senator Leahy, who has been a stalwart on this effort and always a great crusader against those who would do harm to the rule of law. I also want to thank Senator Reid, the Majority Leader, and Senators Harkin, Boxer, Sanders, Wyden, Kennedy, Durbin, Kerry, and Clinton for their support for this amendment. I also thank, if I may, Jay Rockefeller, who chairs this committee. While I am highly critical of title II of the bill, I have great respect for him and the work he has tried to do in leading the Intelligence Committee on this difficult issue. While I still have major reservations about title I of this bill, the fact that title II still exists in this bill makes it impossible to be supportive of this legislation, if that is retained in the bill that we vote on tomorrow. For many Americans, the issue may seem a very difficult one to follow. It may seem like another squabble over a corporate lawsuit. But in reality, it is so much more than that. This is about choosing between the rule of law and the rule of men. You heard our colleague, Senator Levin, and the Majority Leader eloquently describe the situation as it presently exists. For more than 7 years, President Bush has demonstrated time and time again, unfortunately, that he neither respects the role of Congress nor does he apparently respect the rule of law on these matters. Today, we are considering legislation which will grant retroactive immunity to the telecommunications companies that are alleged to have handed over to this administration the personal information of virtually every American, every phone call, every e-mail, every fax, and every text message, and all without warrant. Some may argue that, in fact, the companies received documentation from the administration stating that the President authorized the wiretapping program and that, therefore, it is automatically legal. These advocates will argue that the mere existence of documentation justifies retroactive immunity; that because a document was received, companies should be retroactively exonerated from any wrongdoing. But as the Intelligence Committee has already made clear, we already know that the companies received some form of documentation with some sort of legal determination. But that logic is deeply flawed. Because the question is not whether the companies received a document from the White House. The question is, were those actions legal? It is a rather straightforward and surprisingly uncomplicated question. Did the companies break the law? Why did the administration not go to the FISA Court as they were required to do under the Foreign Intelligence Surveillance Act? Since 1978, that court has handled 18,748 warrants, and they have rejected 5 since 1978, in almost 30 years, according to a recent published report in the Washington Post. So the issue raised for me is, why didn't these companies go before that court to determine whether a warrant was justified? Why did they decide merely to rely on some letter or some documentation, none of which has ever been established as a legal justification for their actions? Either the companies complied with the law as it was at the time or they didn't. Either the companies and the President acted outside the rule of law or they followed it. Either the underlying program was legal or it was not. If we pass retroactive immunity, not a single one of these questions will ever be answered--ever. Because of this so- called compromise, Federal judges' hands will be tied and the outcome of these cases will be predetermined. Retroactive immunity will be granted. So this is about finding out what exactly happened between these companies and the administration. It is about holding this administration to account for violating the rule of law and our Constitution. It is about reminding this administration that where law ends, tyranny begins. Those aren't my words, where the law ends, tyranny begins. Those words were spoken by the former British Prime Minister, Margaret Thatcher. It is time we say no more, no more trampling on our Constitution, no more excusing those who violate the rule of law. These are our principles. They have been around since the Magna Carta, even predating the Constitution. They are enduring. What they are not is temporary. And what we should not do at a time when our country is at risk is abandon them. That is what is at stake this evening and tomorrow when the vote occurs. Allowing retroactive immunity to go forward is, by its very nature, an abandonment of those principles. Similar to generations of American leaders before us, we too are confronted with a choice. Does America stand for all that is right with our world or do we retreat in fear? Do we stand for justice that secures America or do we act out of vengeance that weakens us? Whatever our political party, Republican or Democratic, we are all elected to ensure that this Nation adheres to the rule of law. That is our most fundamental obligation as Members of this great body, to uphold the rule of law--not as partisans but as patriots serving our Nation. The rule of law is not the province of any one political party or any particular Member of the Senate but is, rather, the province of every American who has been safer because of it. President Bush is right about one thing. The debate is about security. But not in the way he imagines. He believes we have to give up certain rights in order to be safer. This false dichotomy, this false choice that to be more secure, you must give up rights is a fundamentally flawed idea. In fact, the opposite is true. To be more secure, you must defend your rights. I believe the choice between moral authority and security is a false choice. I believe it is precisely when you stand up and protect your rights that you become stronger, not weaker. The damage done to our country on 9/11 was both tragic and stunning, but when you start diminishing the rights of your people, you compound that tragedy. You cannot protect America in the long run if you fail to protect the Constitution of the United States. It is that simple. As Dwight Eisenhower, who served our country as both President and as the leader of our Allied forces in Europe during World War II, said: The clearest way to show what the rule of law means to us in everyday life is to recall what has happened when there is no rule of law. That is why I believe history will judge this administration harshly for their disregard for our most cherished principles. If we do not change course and stand for our Constitution at this hour, for what is best for our country, for what we know is just and right, then history, I am confident, will most certainly decide that it was those of us in this body who bear equal responsibility for the President's decisions-- for it was we who looked the other way, time and time again. This is the moment. At long last, let us rise to it. Support the amendment I am offering on behalf of myself and the other Members I mentioned earlier. We must put a stop to this idea of retroactive immunity. It is time we stood for the rule of law. That is what is at stake. The FISA Courts were created specifically to strike the balance between a secure nation and a nation defending its rights. That is why the law has done so well for these past 30 years, amended many times, to keep pace with the changes of those who would do us great harm. At this very hour, in the wake of 9/11, to say we no longer care about that, that we will decide by a simple majority vote to grant retroactive immunity to companies who decided that a letter alone was enough legal authority for them to do what they did is wrong. I have pointed out before in lengthy debate, not every phone company participated in the President's warrantless wiretapping program. Not everyone did. There were those who stood up to the administration and said, without a warrant, without proper legal authority, we will not engage in the vacuuming up of the private information of American citizens. They should be recognized and celebrated for standing for the rule of law. For those who decided they were going to go the other way, let the courts decide whether that letter, that so-called documentation, was the legal authority that allowed them to do what they did for more than 5 long years. Tomorrow we will vote around 11 o'clock on this amendment. I commend Senator Bingaman and Senator Specter. They have offered amendments as well dealing with other parts of this legislation for which I commend them. But I hope my colleagues, both Democrats and Republicans, would think long and hard about this moment. Senator Carl Levin of Michigan said something very important toward the conclusion of his remarks: That this in itself becomes a precedent, that some future administration, fearing they would not get permission from a FISA Court to engage in an activity that violated the privacy of our fellow citizens will no doubt use the vote tomorrow, if, in fact, those who are for retroactive immunity prevail. They will cite that act by this body as a legal justification for some future administration circumventing the FISA Courts in order to do exactly what was done in this case. It becomes a legal precedent. So there is a great deal at risk and at stake with this vote tomorrow. It is about the rule of law. It is not about whether you care about the security of our Nation. Every one of us cares deeply about that, and we want to do everything we can to thwart those who would do us great harm. This is about the simple issue of whether a court of law ought to determine whether these companies violated the Constitution. Did they or didn't they? If they did not, so be it. If they did, then those to whom they did harm ought to be compensated at what marginal or minimal level one would decide. But let the court decide this. Let's not decide it by a simple vote here and set the precedent that I think we would regret for years and years to come. With that, Mr. President, I yield the floor. I suggest the absence of a quorum.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that when the Senate completes its business today, it stand adjourned until 9:30 a.m. tomorrow, July 9; that following the prayer and pledge, the Journal of proceedings be approved to date, the morning hour be deemed to have expired, the time for the two leaders be reserved for their use later in the day, and the Senate resume consideration of H.R. 6304, the FISA legislation, as under the previous order. I further ask that there be an additional 10 minutes for debate under the control of Senator Specter. Finally, I ask that following the votes in relation to FISA, the Senate stand in recess until 2:15 to allow for the Republican caucus luncheon.

Mr. DODD

Mr. DODD. Mr. President, Senators should be prepared to begin voting at approximately 11:15 a.m. tomorrow. There will be up to five rollcall votes in relation to the FISA legislation.

Mr. DODD

Mr. DODD. Mr. President, if there is no further business to come before the Senate, I ask unanimous consent that it stand adjourned under the previous order.

Mr. DODD

Mr. DODD. Mr. President, we only have a few minutes before there is a rollcall vote. I wish to take a few minutes to give my colleagues an update on where we stand on this issue. The cover story in today's Congressional Quarterly Weekly is devoted to the housing crisis. One of the opening paragraphs in the story reads as follows: U.S. companies eliminated 91,000 jobs in June, on top of the 487,000 dumped in the previous six months. Car sales fell last month to their lowest level in 15 years. . . . Much of this bad economic news comes back, at some point, to the collapse in house prices and the resulting foreclosures. As we all know and as the article points out, home ownership is the largest investment most Americans will ever make. Middle-class families use home equity as a cushion against uncertainty, to finance a secure retirement, college costs, health care expenses, and the like. ``Now,'' to quote the Congressional Quarterly article again, ``that has come to a crashing halt, leaving many in the middle class working harder than ever and yet still hard-pressed to make ends meet.'' That brings us to where we are today, with the consideration of the Housing and Economic Recovery Act of 2008, which the Banking Committee, which I am pleased to chair, reported out with a 19-to-2 vote. I compliment Senator Shelby from Alabama, the ranking Republican of the Committee, with whom I worked closely over the past number of months in grappling with the housing issue. Among the key elements of this bill is a new program to provide relief to these homeowners who would otherwise suffer through foreclosure--a provision that would help them salvage their American dream. It was my hope that this bill would have been on the President's desk by now, but regrettably we were unable to achieve that goal because of unfortunate delaying tactics. That failure has consequences. Because we failed to take action, there have been approximately another 90,000 foreclosures that occurred over the week we were home during the Independence Day break. Had we passed the legislation and sent it to the President, as I argued for, before July 1, I think we would have avoided some 90,000 filings that occurred during the period we were on this recess. Not only are these families threatened with foreclosure, but their neighbors and their communities will see falling home prices, rising crime rates, and fewer resources for local schools, police, fire, libraries, and other services. I remind colleagues that this legislation has proven time and again to enjoy strong bipartisan support. In fact, shortly before we left for the recess, this bill passed by a vote of 79 to 16 on a cloture motion. Yet, because of a technicality, this measure is now being held up by one Senator because that Senator wants to add another vote on a completely unrelated matter. Let me review for my colleagues, as we prepare to renew our discussion on this bill, exactly what it is we are talking about and why it is so hard to achieve. The bill we are working on has a number of very key elements, all of which have been supported by strong bipartisan votes in either the Banking Committee or on the floor of the Senate. First, we have the HOPE for Homeowners Act, which will help 400,000 to 500,000 American families save their homes from foreclosure. These families were simply seeking the American dream of home ownership. Sadly, in case after case, they were led astray, steered into mortgages they could not afford, often by mortgage brokers and loan officers who pretended to be trusted financial advisers but were really only out to make a buck for themselves. The HOPE for Homeowners Act is a voluntary program that will help save these homes by forcing the lenders to choose to participate and take significant losses. There are no bailouts here. The homeowners will have to pledge at least 50 percent of all new equity and future appreciation in order to get the benefit of the new FHA-insured mortgage. There are many protections built into the program: Only homeowners can qualify; no investors or speculators will be allowed to participate; borrowers would have to show they cannot afford their current mortgages; and all loans will be underwritten at a level the borrower can afford to pay. New loans will be 30-year fixed-rate mortgages. All of this is done at no cost to the taxpayer. In fact, over the next 10 years, the Congressional Budget Office tells us that the program could actually raise some $250 million for the Treasury. This provision, combined with the GSE regulatory reform section of the bill, passed the Banking Committee by a vote of 19 to 2, receiving strong bipartisan backing. We desperately need this legislation. As I have said over the past number of weeks, every day that we wait, somewhere between 8,000 and 9,000 new foreclosures are filed in our country. In late June, the census reported that the home ownership rate, after reaching an alltime high in 2005, fell to 67.8 percent--the sharpest decline in home ownership in 20 years. Minorities, who were disproportionately likely to get subprime loans, are suffering especially badly. That is why this legislation is widely supported by the community and civil rights organizations around our country. They see a generation of wealth being lost as a result of this foreclosure crisis. The Senate expressed its strong bipartisan support for the HOPE for Homeowners Act when it defeated an amendment to strip this program out of the larger bill on a vote of 69 to 21. Second, the bill includes the FHA Modernization Act. This passed in early April as part of the Foreclosure Prevention Act by a vote of 84 to 12 in this body. The provisions in the current bill are identical to that legislation, with the exception that the loan limits have been increased in high-cost areas to a maximum of $625,000. As the administration has repeatedly said, modernizing the FHA program will put it in a far better position to help keep future borrowers away from subprime loans. A number of our colleagues have spent some time citing the problems at FHA. Clearly, FHA has suffered some losses in recent months, as have all players in the mortgage market. Yet the program has about $18.5 billion in reserves, and the performance of FHA loans improved over the past quarter, even as the performance of both prime and subprime loans has declined, according to data provided by the Mortgage Bankers Association. Moreover, for the past several months, credit scores of FHA borrowers have been rising, and the percentage of refinance loans--loans to borrowers with a proven track record of making timely payments--has actually increased. In addition, this bill eliminates the seller-funded downpayment assistance program which has been the largest source of losses in the FHA program. In other words, with its hefty reserves, an improving mix of business, and the reforms in this bill, we can have confidence that FHA will be safe and sound for years to come. Third, this legislation creates a strong and effective world-class regulator with the housing government-sponsored enterprises--Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. These entities have kept the housing and conforming mortgage markets going while other capital markets have frozen. Madam President, I ask for 2 additional minutes.

Mr. DODD. We need to make sure these crucial market players are appropriately capitalized, well regulated, and properly supervised so the American people can continue to depend on them to ensure that affordable mortgages are always available. Recent losses at Fannie Mae and Freddie Mac speak to the urgency of this need, and the bill before us accomplishes that goal. Finally, there are other important provisions in this bill. The bill includes $3.9 billion in community development block grants to help local communities revitalize neighborhoods devastated by foreclosures. All the major organizations representing Governors and mayors across the country strongly support this provision as well. Lastly, this bill also has an affordable housing program in it which is absolutely critical for the long-term needs of our country. In short, this is a good bill. It is a balanced bill that goes to the heart of our Nation's current economic problems. The bill has very broad support, including from the Conference of Mayors, the League of Cities, the Mortgage Insurance Companies of America, the Leadership Conference of Civil Rights, the Mortgage Bankers Association, the Consumer Federation of America, the National Association of Homebuilders, the NAACP, ACORN, the Financial Services Roundtable, and numerous other business, consumer, and civil rights organizations. Senator Shelby and I urge that this legislation be supported. I hope we have a chance to pass it quickly, to send it to the other body for their consideration, and then give this bill to the President for his signature. This will be the major achievement and accomplishment of this Congress, when it comes to dealing with the underlying economic crisis which, at its heart, is the foreclosure rate. I appreciate the indulgence of the Chair. I yield the floor. Cloture Motion

Mr. DODD

Mr. DODD. Mr. President, what is the business of the Senate?

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

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent for a second reading en bloc, and I object to my own request en bloc.

Mr. DODD. Mr. President, I understand there are three bills at the desk, and I ask for their first reading en bloc.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the concurrent resolution be agreed to, the motion to reconsider be laid upon the table, with no intervening action or debate.

Mr. DODD

Mr. DODD. Mr. President, I ask that the consent be modified with respect to Calendar No. 827, H.R. 6304, in the following way: Provided that the Specter and Bingaman amendments be subject to an affirmative 60-vote threshold; and that if they do not achieve that threshold, then they be withdrawn; if they achieve that threshold, then they be agreed to and the motion to reconsider be laid upon the table.