Christopher Dodd

Mr. DODD

Mr. DODD. Mr. President, reserving the right to object, and I will object, I want to explain to my colleagues who may come over, who are desirous of bringing up amendments also, Senator Sanders has expressed a strong desire to have an amendment considered regarding LIHEAP, the Low-Income Home Energy Assistance Program. There is some difficulty with that. Obviously, there is some objection on the other side to that coming up. Out of respect to Senator Sanders, who could not be here this morning, I object to any effort to set aside the pending amendments before that matter is resolved. I say that respectfully to the Senator from Georgia, as well as others who may come here to do exactly that. We will be moving forward on legislation. Today we will entertain debate and discussion on this bill but will be constrained from going forward in the absence of a larger agreement that would allow Senator Sanders to bring up his amendment. So I object.

Mr. DODD. Reserving the right to object, I will repeat what I said a moment ago. Senator Sanders of Vermont is unavoidably absent this morning. He has wanted to bring up the low-income energy assistance program. While it is not germane, it is relevant, obviously, to the subject matter of the bill--home heating. But there is objection on the Republican side for that amendment to be considered. As a result, he is objecting to any unanimous consent request to lay aside the pending amendment. So there is a reason that I will momentarily object. Let me also say for clarity that the very provision the Senator from Nevada has raised here, the renewable energy program, was part of the extender bill last week. Obviously, any bill like that is going to have pieces you like and pieces you don't like. I have rarely seen a piece of legislation around here that had the unanimous support of everyone. Nonetheless, we had an opportunity to deal with that piece of legislation, and because we couldn't get cloture on it, that was rejected by the Republican minority. They did not want that bill to come up, so we did not debate it at all. An opportunity to deal with the very provision that enjoyed such broad-based support could have been part of that and gone down to the President for his signature. So on this bill here, while I have supported this proposal--it was part of the earlier housing bill--until we resolve the matter dealing with low-income energy assistance, then, at the request of the Senator from Vermont and the leadership here, I will object to any effort to set aside the pending amendments. I object.

Mr. DODD. Madam President, I wish to take a few minutes, if I may, and sort of review the events of yesterday, a historic day here in many ways in that we were able to bring up a rather comprehensive housing proposal, thanks to the work of Senator Shelby, my colleague from Alabama, the former chairman of the Banking Committee and my ranking member, along with 17 other members of the committee, Republican and Democrats, on a vote of 19 to 2 out of the Banking Committee, that brought forth the final piece of this housing package for the consideration of our colleagues. I heard repeatedly mentioned yesterday that this was a large bill. It is. It is 660 or 670 pages. And the question was raised about how we had not had a chance to see this bill. I remind my colleagues that you have already voted for two-thirds of that bill because they are previous matters we have considered on two separate occasions, with some very minor, minor but significant changes, but not voluminous in their quantity. So the greater part of this legislation has already been examined and debated extensively on this floor. The remaining piece, the one that came out of the committee 19 to 2, was voted out of the committee about a month ago--a little more than a month ago--and has been the subject of significant reporting as to what it included. It is very similar, I might point out, to what was adopted by the other body. So this is a moment where we have had ample opportunity. If you do not hear it on the floor, go back home and listen to your constituents talk about foreclosure problems. As I pointed out yesterday, we are now averaging 8,427 filings for foreclosure on a daily basis in the country. So every single day in this country, more than 8,000 people, between 8,000 and 9,000 people are in the process of losing their homes. There are 1.5 million of our fellow citizens who have already lost their homes over the last year or so, and with resets of adjustable rate mortgages coming up in July, the estimates are those numbers will explode even further. In fact, it is been reported by Credit Suisse and the Mortgage Bankers Association that as many as one out of every eight homes in America could be in foreclosure if we do not come up with some means by which we can address this issue. The economic crisis we face in our country has at its heart the housing crisis, which has at its heart the foreclosure crisis. The problems are exacerbated, are expanded, obviously, by the rising costs of gasoline and health care, higher education, the fact that now more than 300,000 jobs in the last few weeks have been lost in this country, unemployment rates are rising, and inflation is beginning to creep up. This issue of getting our Nation back on its feet economically, restoring confidence and optimism of the American people, particularly when it comes to the most important asset most Americans will ever have, which is their homes--nothing we can do is more important to the stability of our neighborhoods, our communities, and our families, than making it possible for people to be able to maintain and own their own homes. That is the heart of what we are trying to do. That has been the effort over the last number of weeks, with the passage of two previous pieces of legislation and the adoption now, I hope, in the coming days, of this comprehensive bill. Let me review the bidding, if I can, as to what is in this bill. And the efforts that were made yesterday to strip out all of this were soundly defeated by margins that we rarely see in a body such as this that is so equally divided, 51 to 49. But, again, thanks to the leadership of both Democrats and Republicans, the leadership of the majority leader, Harry Reid, as well as the cooperation of the minority leader, we were able to get to this bill, we were able to address these underlying questions and then vote overwhelmingly to reject the efforts that would have stripped this legislation of its heart. We have a strong regulator in this legislation. This has been an effort which has been sought over the last 6 or 7 years. Yet we have been unable to deal with the problem of the government-sponsored enterprises, principally Fannie Mae and Freddie Mac, which are critical to the liquidity that is needed in our housing markets. Yet we also know that those institutions have been losing billions of dollars as a result of the housing crisis. A strong regulator is necessary and some additional reforms to make sure that these GSEs, these government- sponsored enterprises, particularly Fannie Mae and Freddie Mac, will be on a sound footing. This bill does that, and we were able to achieve that through the cooperation I mentioned a moment ago. That is absolutely essential if we are going to have any hopes at all of stabilizing the housing problems. We establish in this bill a permanent affordable housing program, not a temporary one, not for 1 or 2, 3 or 5 years, but a permanent affordable housing program. I cited yesterday the statistics of the millions of Americans who are finding any kind of shelter further and further from their grasp economically. Today when you discover that you have people literally spending more than 50, 60, or 70 percent of their income on rental housing and, in some cases, when you talk about people who are disabled, the SSI payments, in fact, don't even equal the cost of the housing they are in today, we need to have a program that provides affordable shelter. Decent, affordable shelter has never been a partisan issue. In fact, 60 years ago, the administration of Harry Truman brought together Democrats and Republicans in 1948 and insisted upon the issue of affordable shelter for all Americans. Over the years, Democrats and Republicans, conservatives, liberals, moderates have all worked together on this issue. As I was growing up, the man who was called Mr. Housing was a guy named John Sparkman, a Senator from Alabama, the same State as my ranking member from Alabama, Mr. Shelby. John Sparkman was Mr. Housing. Through the 1950s and 1960s, as a Member of this body, he fought year after year to see to it that we would have affordable, decent shelter for all Americans. We began to slip over the last 15 or 20 years, as fewer and fewer dollars are being invested in affordable shelter for Americans. In this piece of legislation, as a result of the efforts of our colleague from Rhode Island, Jack Reed, along with others, we now will have a permanent, affordable housing program in America that will not require any tax increases. The support of that program will come from the resources coming out of Fannie Mae and Freddie Mac, the GSEs. So for the first time in a long time, if ever, we will have a consistent and reliable source of support for decent, affordable shelter for Americans. That is a part of this bill. The legislation also includes the HOPE for Homeowners Act. It will help at least 450,000 of our hard-working families save their homes. Again, this idea is not new. It was tried years ago, back in the 1920s and 1930s during the Great Depression, the last time, I might point out, that we had a significant housing crisis such as the one we are in today. Back in those days, the Congress, working with Franklin Roosevelt, crafted a program that had the Federal Government actually purchase highly distressed, troubled mortgages and then put those families back on their feet by a fixed-rate mortgage they could afford. That program actually produced a surplus for the American Government of some $16 million. We don't have a program like that, but it is similar. Instead of actually purchasing distressed mortgages, we are insuring them by insisting that the lender reduce the amount they are asking for and settle on a fixed-rate cost that the borrower can afford. Therefore, the lender does not lose everything. It costs them in order to take this arrangement, but the borrower also gets to stay in their home, and they end up paying that insurance and also contributing back to the cost of the program. The Congressional Budget Office has examined this idea which is temporary, voluntary; you don't have to be in it if you don't want to. We are trying to create a structure to allow people to end up with a mortgage they can afford and, for lenders who worry about losing everything, an opportunity to get something back out of this rather than losing all their resources. It is estimated by the Congressional Budget Office that this program could actually save American taxpayers $250 million. That is their estimate of what we may actually have coming back as a result of this effort. This has been a bipartisan proposal--a bicameral one, for that matter. The House has adopted a very similar program in their bill. There was an effort to strip this program out of the bill yesterday. Our colleagues voted 77 to 11 to reject such an effort. We don't get votes like that often, but I commend my colleagues, Democrats and Republicans, for sticking with an idea that was recommended to us by a broad consensus on the political spectrum. So it was very important. We had strong votes yesterday for the regulatory reform for GSEs. The effort to strip out the affordable housing program was soundly defeated as well. The amendment relative to the HOPE for Homeowners Act was also resoundingly defeated. We are on the brink of adopting the most comprehensive piece of housing legislation in a long time, and it is not coming any too soon either. As I have reported, when you have more than 8,000 people every day slipping into foreclosure, with already a million and a half, and some estimates are those numbers will explode in the coming weeks and months, it is a timely decision for Congress to do everything we can to restore confidence and optimism, to keep people in their homes, and to get our economy back on a sound footing. We will not do that in the absence of dealing with the housing crisis. Again, I commend my colleague from Alabama. I thank him immensely for his work. I thank the leadership, principally our majority leader, for making it possible for us to get to this moment where we could adopt this legislation. My hope is that the other body, the House of Representatives, will consider what we have done, how difficult it is, and how precariously close we have come to having this matter blow up on us on at least several occasions in the last several days. We need to send this package to the President for his signature. He is threatening a veto. I hope he doesn't do that. It would be a great tragedy to have the President decide to veto this legislation. I am told the reason he wants to veto it is because we include money for the Community Development Block Grant Program, some $3.9 billion. That is an emergency effort. The reason we have that is because our mayors, county supervisors, and Governors already have foreclosed properties, many of them in their communities. These moneys are exclusively to be used for the rehabilitation of these homes so they can be resold, to make them more attractive and available so we can revitalize neighborhoods that have been affected by foreclosure. I have pointed out on many occasions in the past while debating these bills, if you end up with one foreclosure on a city block, the value of every other home on that block declines immediately by more than 1 percent. Crime rates go up by at least 2 percent in those neighborhoods. You start losing value in other homes, even if they are not on the market. We know today we have some 15 million homes where the debt exceeds the equity. Despite efforts over the years to increase that equity, to become part of retirement and deal with a family crisis, such as a higher education cost, many families now are living in homes where the debt on the mortgage exceeds the value of the house. That is an unhealthy situation. We need to do everything we can by cleaning up where foreclosed properties exist and getting them back on the market. Let me commend Senator Baucus of Montana and Senator Grassley of Iowa, chair and ranking member of the Finance Committee, the tax- writing committee. Part of this bill includes provisions to deal with mortgage revenue bonds, to deal with a tax incentive approach to take foreclosed properties and encourage homeowners who would move into them to buy them. We need to do everything we can to allow this market to get back on its feet and moving. That is a quick brief of what this bill includes. Again, it is a very good piece of legislation. It is not perfect. If I were writing it myself, it would look different, as I am sure it would if each Member could write the bill. But we serve in a body of 100 Members. We must work with a body that has 435 Members down the hall. Of course, we must work with the White House. That is how our system works. You don't get to write these things on your own. You have to work with people with whom you may have fundamental disagreements in order to resolve those disagreements, to find common ground, and then craft ideas that can make a difference for the American people who depend upon us. That is what we have done with this bill. It is a sound, reliable, strong piece of legislation that will make a difference for the American people and, particularly, families fearing they may lose the most important and valuable asset they will ever have, the family home. What a difference it can make to a family to have that house in which to raise their family and feel secure that the home they are living in and raising their children in will be theirs and not be lost through foreclosure. We are hopeful this legislation will be adopted in the early part of next week, and the President will sign it into law. What a greater gift on Independence Day, as we break for a week to go back to our respective States, than to have the President sign into law a piece of legislation that would allow the American people to enjoy a certain amount of independence as well in living in their homes without fear of foreclosure. I urge my colleagues to continue to be supportive of this effort, and I thank those who have been responsible for bringing us to this point.

Mr. DODD

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

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

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, June 19, 2008, at 2:15 p.m.

Mr. DODD. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs Securities, Insurance, and Investment Subcommittee be authorized to meet during the session of the Senate on June 19, 2008, at 2:30 p.m.

Mr. DODD. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on June 19, 2008, at 2:30 p.m.

Mr. DODD. Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs' Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia be authorized to meet during the session of the Senate on Thursday, June 19, 2008, at 2 p.m. to conduct a hearing entitled, ``Management Challenges Facing the Federal Protective Service: What is at Risk?''

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that when the Senate completes its business today, it stand in recess until 9:30 a.m. tomorrow, Friday, June 20; that following the prayer and pledge, the Journal of proceedings be approved to date and the Senate resume consideration of the House message to accompany H.R. 3221, the housing legislation.

Mr. DODD

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

Mr. DODD

Mr. DODD. Madam President, let me begin briefly by thanking our colleagues who have come and spoken on the bill already this morning. I thank Senator Bob Casey, of Pennsylvania, a member of Senator Shelby's and my committee, the Banking Committee, for his remarks. I also thank Judd Gregg, of New Hampshire, who, while not a member of the committee, has followed our work very closely and has been intimately involved with the committee over the last number of months as we were developing the Homeowners Act, an idea he brought to the table. He brings a good historical perspective--going back to the Resolution Trust Corporation and dealing with another housing crisis and how well that idea worked; and while we are not exactly duplicating it, he has knowledge of how that worked and an understanding of the basic idea behind the bill that we have authored over the last several months, which is very helpful. I know Senator Shelby and I are grateful, as are other members of the committee, for having a nonmember of the committee understand the issue as well as he does. His support of what we are trying to do is very helpful. I thank Senator Baucus and Senator Grassley as well. Senator Shelby and I are not dealing with the tax-writing provisions of this bill and they have been helpful and cooperative and, obviously, their ideas are a strong complement to what we are trying to achieve--with mortgage revenue bonds and tax incentives for those who acquire foreclosed properties, and the like, are very helpful. They have disregarded earlier provisions included in the tax proposals and, candidly, I think those ideas being kept out of this bill is healthy. I don't dwell on it. Frankly, I think their appraisal of the various ideas is very constructive. We thank the tax-writing committee, the Finance Committee, which has done a good job in complementing what we are trying to do. Senator Johnny Isakson, of Georgia, deserves a great deal of credit. He brought up the idea of trying to create some incentives for those who might purchase foreclosed properties. In his previous life, he worked in this area, and he has a firm knowledge of it. So his cooperation on that, as well as other aspects of the bill, his enforcement and support of this legislation and his intention to back it is a further indication of the effort we have made on a bipartisan basis to make this a good bill, not just because it has bipartisan support, but I think that is indicative of the kind of effort that has been made that brings us to this moment. I note that in this morning's local newspaper, the Washington Post, the leading headline is, ``DC Region's Foreclosure Rate Soars.'' It says that although communities have felt the effects of the housing crisis for months, the report reveals that foreclosures in the Washington region have been increasing at a surprisingly quick pace, outstripping those of most metropolitan areas. It points out that while foreclosures were practically nonexistent in Washington 18 months ago, it is now very prevalent and way above the national average. I point that out because that is unique here. It makes a point. As I showed earlier this morning, with the graph we put up, we have the numbers now for May on the foreclosure rates. Over 8,400 people are going to foreclosure every single day in America. That number was below 8,000, in the mid-7,500 area, only a few weeks ago. For those who would suggest that we ought to wait this out, or see what happens down the road, explain that to the 8,000 families today who may lose their homes, the 8,000 tomorrow and the 8,000 the following day and the day after that and all next week, as we grapple with this bill, where as many as 50,000 or 60,000 families will be adversely affected while we debate whether this is a perfect bill. My patience is thin. We have worked so hard on this. So for those who suggest it is a bailout for a lender--I have heard a lot of arguments, and when you have people losing homes every day, neighborhoods being destroyed because of it, including financial aid for students, municipal finance, commercial lending, and the global implications and trying to put a bill together that will bring some confidence back to the marketplace, and to suggest this is a bailout for some bank--it is anything but that. In fact, it is quite the opposite. Senator Shelby and I have had 50 hearings since last March on this subject matter-- almost exclusively on this subject matter--and we have had these individuals before our committees explaining to us why they were giving out adjustable rate mortgages to people on fixed incomes, knowing very well these people could never, ever pay the final fully indexed price of those properties. Yet they did it, day in and day out, knowing full well what the implications would be. The very companies they claim are being bailed out are exactly the ones that were engaging in that, and the last thing we are doing is providing any kind of support and assistance for them. We are trying to see to it that we restore some semblance of confidence in this area and we are planning to keep as many people in their homes as we can. Have we written a miracle? Absolutely not. Will this work? I hope so. Do I have an assurance it will? No. All I know is it is our best judgment, based on the wonderful, competent people who don't bring an ideological perspective to this--from the American Heritage Foundation to the Consumer Federation of America and groups in between. They have said this is the best idea we could come up with to address this issue. They would also be the ones to tell you there is no assurance it is going to work. It is a voluntary program. We don't mandate anything here; we are just creating the opportunity. I say to my colleagues that history is somewhat of a teacher in all of this. Back in the last period when we had a housing crisis of this magnitude, back in the 1920s and 1930s, another Congress did it differently. In that case, the Federal Government actually purchased distressed mortgages. Senator Shelby and I are not suggesting anything such as that. We are talking about an insurance program. It is a voluntary program that creates a new, temporary program. It ends in a few years. It is merely an effort to step in here and try to make a difference in all of this. I will go back over some of the specifics of this--the HOPE for Homeowners Act--as well as the issue dealing with the affordable housing provision and how we managed to do this without a tax increase. We have a wonderful symmetry of liquidity being strengthened, a regulator being imposed on these GSEs, and a source of revenue coming from that which can also assist in another area of needed housing. We think this has a rather good sense of balance. But again, I am very grateful to the Finance Committee, Senator Baucus and Senator Grassley, and to the Members who have spoken out, both Democrats and Republicans, this morning, those who have come together and said this is a good bill deserving of our support. We hope the rest of our colleagues, as they come forward with these amendments, will be so inclined to stand with us and support this bill, and urge the White House to sign it into law. Madam President, I yield the floor.

Mr. DODD. I thank the Chair.

Mr. DODD. Are you going to resubmit the modification?

Mr. DODD. Reserving the right to object, as I understand what my colleague from Missouri is suggesting is that the existing affordable housing program under the GSE, that whatever language is there that would have affected that is taken out by this modification.

Mr. DODD. But the modification corrects that.

Mr. DODD. The underlying amendment would object to the proposed addition to the affordable housing program authored by Senator Reid in the bill. That still is the substance of the amendment?

Mr. DODD. I have no objection to the modification.

Mr. DODD. The only danger is, of course, we would have to get back on the matter before us to vote on the underlying amendments that we agreed, by unanimous consent, to do at or about 4:30.

Mr. DODD. There is an objection being voiced.

Mr. DODD. I say to my colleague, we will have a couple votes fairly quickly, and then I will be here to entertain my colleague's proposal.

Mr. DODD. Yes.

Mr. DODD. I will be happy to yield to my colleague from Georgia.

Mr. DODD. Madam President, let me inquire, as I understand, the Senator from Missouri has 8 additional minutes remaining on the UC?

Mr. DODD. Madam President, I know Senator Shelby had some time remaining. I don't know if he intends to use it. He may not.