Christopher Dodd

Mr. DODD

Mr. DODD. I would have to object. There is an objection being raised.

Mr. DODD. Mr. President, I yield to the Senator from New York, Mr. Schumer.

Mr. DODD. Mr. President, there is no time agreement, so it is a matter of recognition.

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 President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. DODD. Mr. President, let the games begin. We are open for business. If Members have amendments they would like to raise, Senator Shelby and I are here, and we would like to move along. I know there are Members who have plans they would like to do later this week, perhaps for the weekend, but if we can move quickly, who knows what might happen, since we have done two-thirds of the bill already with overwhelming votes, with a couple modest changes in it. We have increased loan limits in a couple of areas. We invite our colleagues to come over. If they want any questions answered about this, we have staff here as well as members of the committee. We are prepared to entertain amendments and move forward on this very important piece of legislation. I suggest the absence of a quorum.

Mr. DODD. Let me say, first of all, I will be very brief. I know my colleague from Iowa wants to be heard on the bill. I wish to say to Senator Bond that what we will do is try to figure out a way to handle these in order, all three of them in one or in order, or whether we will go back and forth. But we will keep him posted. I do not how long my colleague from Iowa wants to be heard on the bill. I wish to respond to the Senator from Missouri on the issues. I presume my colleague from Alabama may want to do so as well. We will try to take them in the order the Senator offered them. We will keep him posted on how we will proceed.

Mr. DODD. Madam President, we are going to try to work out an arrangement so people have some sense of the order in which people will be heard. We now have three Bond amendments. There is an amendment by Senator Dole that has been offered. Obviously, we have the pending amendment of Senator Reid. These are all second-degree amendments to the Reid amendment. At some point, I will want to bring closure to these amendments so we can deal with them. Senator Isakson may have an amendment. I would like to get to a point where we can manage those amendments, debate them, and then ask the leadership for an appropriate time to have a series of maybe three or four or five votes, depending upon what is necessary. I yield the floor to the request for a time sequence of speakers, if I may.

Mr. DODD. I wish to thank our colleague from California. She is absolutely correct. Arizona, Nevada, Florida--there are States that are being affected, but no State is paying the price as much as California. It is the epicenter of this problem for many reasons. Earlier this morning, I highlighted the growing problem, as the Senator from California has done with her charts. We are now averaging on a daily basis, I say to my colleague from California, 8,427 foreclosure filings in the country every single day. That is up almost--somewhere in the area of 1,000 more than it was 2 months ago when it was up to 7,500 or in that range. Now we are getting close to 9,000 every day for foreclosure filings. The estimates are that when you get the resets that will be occurring on these adjustable rate mortgages coming in July or shortly after July, we will face another tidal wave of foreclosures coming. So the Senator's numbers, as bad as they are today, will be worse, quite candidly. So every day we wait, every day there is a delay, it is going to cost us dearly. I can't guarantee our bill is going to solve every problem. All I can tell my colleagues is what we have done is listen to very good people. We have held 50 different hearings over the last number of months listening to people from the American Heritage Foundation, the Consumer Federation of America, and they all have come to this conclusion. So when people start telling me this is written for some special interest, believe me, if you have been to the 50 hearings and listened to people talk about this idea--one that we actually tried once before; a very similar idea back in the early part of the 20th century during the Great Depression is the last time we had a crisis such as this and it worked, and it made a difference in the lives of people and families. I listened to the Senator's personal story, which is very moving. But what a difference there is today in our country that we have been able to make housing and home ownership available to so many more people and to watch it happen, and now watch this fall apart and what it does to neighborhoods and families and communities. There is nothing more stabilizing than the idea of having an equity interest in where you live. So this is an issue that has far broader implications than just housing, but it is at the heart of who we are and the dreams that people have in this country. So it is very important we get this done. I thank the Senator immensely for her comments, as well as the data which she is supplying to reinforce this bill.

Mr. DODD. Mr. President, I ask unanimous consent that at the conclusion of the remarks by our colleague from Florida, Senator Martinez, Senator Schumer be recognized.

Mr. DODD. Mr. President, I return that compliment. To have a former Secretary of HUD as a member of the Banking Committee is a pretty good asset. When we talk about these issues, to have someone who ran that agency and knows these programs as intimately as Senator Mel Martinez has been a great asset for the committee in developing this product. I will say this publicly. I am deeply grateful to him. Senator Shelby is, as well, as are all of the members of the committee. We have had an active and involved committee. The 21 members of the committee have been deeply engaged in this debate over the last year and a half, or more, as we have had some 50 hearings--most of which have been related to the subject matter--to gather the best information and advice we could get in developing the product we have here. The Senator from Florida has been a key element in doing that.

Mr. DODD. Mr. President, Senator Schumer was, by consent, supposed to follow Senator Martinez, but the Senator had to attend another meeting. Let me ask my colleague, how long is my colleague from New Hampshire going to be?

Mr. DODD. Madam President, before he leaves the floor--I will recognize Senator Kohl and Senator Schumer. Senator Schumer is on the floor. We heard from Senator Martinez and others. This doesn't happen miraculously. Senator Carper has been deeply involved and committed to these issues for a long time. There was a while when I couldn't see him without ``GSE'' being the first thing out of his mouth. I thank him for his persistence over the months when we developed this final product, and I thank him immensely for his work.

Mr. DODD. Madam President, I will try and propound a unanimous consent request one more time. I ask unanimous consent that at or about 4:30 p.m., the Senate proceed to vote in relation to the following amendments in the order listed, and that prior to each vote there be 2 minutes of debate equally divided and controlled in the usual form; that after the first vote in the sequence, the vote time for the second vote be 10 minutes, with no intervening amendments in order: Bond amendment No. 4986 and the Bond amendment No. 4985. Further, that time be allocated as follows: Senator Dole has requested 5 minutes to talk about a proposal she is offering; Senator Bond for 10 minutes; Senator Shelby for 10 minutes; and myself for 15 minutes.

Mr. DODD. Reserving the right to object, I haven't had a chance to look at it. I would have to take a minute to look at what he is proposing.

Mr. DODD. Madam President, let me take a few minutes, if I may, because I have yet to really address these two amendments and also the one I know our colleague from North Carolina is going to propose or is in the process of proposing. Amendment No. 4985 Madam President, let me deal, first of all, with the HOPE for Homeowners Program. I raised earlier this morning--and I will do it again, if necessary--that 8,427 people as of today will file for foreclosure. That number was for every day in the month of May. That is in excess of the numbers back in April and even back in March. But they are growing. So every single day we delay moving on this, we have, on average, again, some 8,000 to 9,000 people in our country who are entering the foreclosure process and losing their homes, and 1.5 million people have already. We have been told and warned by those who acknowledge and follow these issues that this is a crisis that is not shrinking; it is growing. It is growing by the hour, let alone by the day. The HOPE for Homeowners Act that Senator Shelby and I and 17 others of our committee have fashioned together--very similar to what the other body has done--is designed specifically to offer some relief to these people facing foreclosure. Both lenders and borrowers will take what is called a ``haircut.'' It will be painful. It will not be easy. It is voluntary. It is temporary. But it offers some hope that we can put the brakes on this ever-escalating problem of foreclosures in our country. It is not only affecting homeowners, which is obviously bad enough, it is affecting commercial loans, student loans, municipal finance. The global implications are obvious to anyone who has paid any attention to the issue. So this idea, which is central to this bill, is critical. The amendment offered by the Senator from Missouri would eliminate this program altogether, despite all the recommendations from the American Enterprise Institute, the Consumer Federation of America, other lending institutions, the Federal Reserve members. In fact, the present Chairman of the Federal Reserve, while not endorsing the bill, has called for this kind of action. Quite simply, we are living through one of the worst housing market crises since the Great Depression. Almost 1 in every 11 homes with a mortgage in this country is in default or foreclosure as of the end of March. This is the highest level since the Mortgage Bankers Association began collecting data in 1979. Foreclosure rates have grown and grown at record levels for some time, and last year about 1.5 million, as I have said, have already gone into that status. This foreclosure crisis hurts everyone, as we all know. As Federal Reserve Chairman Ben Bernanke recently stated: [H]igh rates of delinquency and foreclosure can have substantial spillover effects on the housing market, the financial markets, and the broader economy. Therefore, doing what we can to avoid preventable foreclosures is not just in the interest of lenders and borrowers. It is in everybody's interest. The HOPE for Homeowners Program is built on a concept raised by Chairman Bernanke: The best solution may be a write down of principal or other permanent modification of the loan by the servicer, perhaps combined with a refinancing by the Federal Housing Administration or another lender. That is also from Chairman Bernanke, the Chairman of the Federal Reserve Bank. Mark Zandi of Moody's Economy.com recently wrote: Unless policymakers soon become more creative and aggressive, the risks are rising that the current recession will be more severe and the ultimate recovery more disappointing than anyone currently anticipates. The evidence is overwhelming. The recommendations come from across the political spectrum. This is absolutely critical at this pivotal moment on this economic issue. Senator Kerry earlier talked about that at the heart of our economic crisis is the housing crisis, and the heart of the housing crisis is the foreclosure crisis. Were the Bond amendment to be adopted, the very bipartisan effort we have spent months working on to achieve here would be lost. I urge my colleagues, as they have heard from our colleagues--Senator Gregg of New Hampshire, Senator Martinez, Senator Isakson; and on our side, Senator Boxer, Senator Schumer, and Senator Casey; and, obviously, Senator Shelby and myself--across the spectrum here--we recognize this idea may not solve every problem, but if we can keep 400,000 to 500,000 people in their homes, that is a step forward in the right direction to help Americans facing these kinds of crises. I urge my colleagues, at the appropriate moment, when this matter is before us, to say, respectfully, to my friend from Missouri that we reject this amendment and will keep this very critical element of this very important housing bill. Amendment No. 4986, as Modified Madam President, the second proposal by Senator Bond also, in my view, should be rejected. We have modified the amendment, so any possible inference he would be striking the existing program has been taken out of this bill. I applaud him for that, and I thank him for that. But the problem still persists. As Senator Kerry of Massachusetts just pointed out, this problem with affordable housing is growing. It is staggering in its proportions. Over 3.5 million people in our country, including 1.3 million children, experience homelessness each year. For most of these families, all that is needed is affordable housing. The gap between rental costs and wages of low-income people is significant. To give you some idea as to the housing assistance necessary for many working Americans, a person has to earn over $17 an hour just to afford the average fair market rental without forgoing other basic needs. That is three times the current minimum wage. There are 7.4 million disabled Americans on SSI. SSI benefits are lower than the average fair market rent. Rental costs are more than 100 percent of their SSI benefits. Without housing assistance, these people who are disabled in our country cannot afford housing. That is a fact. The Joint Center for Housing Studies of Harvard University found in their report, ``The State of the Nation's Housing 2007,'' that in just 1 year, the number of severely cost-burdened households--those that pay more than half of their income toward rent--jumps by 2.1 million to a total of 17 million. This is one in seven U.S. households in the country affected. The data goes on and on. This is a very important element of this matter: affordable, decent shelter. Harry Truman, in a bipartisan effort, in the late 1940s--60 years ago--called upon Americans. John Sparkman of Alabama was ``Mr. Housing'' back in the 1950s and 1960s. This was never a partisan issue: decent, affordable shelter for Americans--all Americans. We heard our colleagues today: Senator Martinez talking about his family getting that first home when they arrived in this country. Senator Boxer grew up her entire life never owning their own home, and she was able to buy one as a young mother, and they stayed there for 40 years to raise their family. Madam President, 17 million people in our country today deserve decent shelter. You should not have to strip every bit of income you have to try to afford it. So what Jack Reed has put together here is decency--common decency. In our moment of difficulty, if we cannot do something to provide affordable shelter and to ask that funding flow come out of these government-sponsored enterprises, which have been so lucrative, for them to share in that wealth, to make it possible for working families in this country to have a decent place to live--I do not think that is too much to ask in this hour of need. We heard our colleagues across the spectrum politically support this program, and having a vote of 19 to 2 in our committee, with Democrats and Republicans coming together at a moment such as this to say: We hear you. We care about what you are going through. We have designed a program not by increasing taxes but by asking existing institutions to share, to see to it all Americans can enjoy that affordable and decent shelter they deserve as Americans. I ask my colleagues to reject that amendment as well.

Mr. DODD. Madam President, I will address my colleague from Vermont through the Chair. As I understand it, we have heard from the Members who want to be heard on the amendments. Unless there is an objection, I know my colleague wants to take a few minutes to propose an amendment; is that correct?

Mr. DODD. Certainly. I will again make the same recommendation I have made to our colleague from Vermont. If the Senator from Georgia will wait a few minutes, we will be glad to take--in fact, I invite, as my colleague from Alabama does, any other amendments besides those we have heard about here that people want to raise. We are anxious to do business. We are going to have a couple votes, but obviously there may be some other thoughts people have on the subject matter. Certainly, I will be here to entertain that amendment.

Mr. DODD. Madam President, again, I do not know if other Members wish to be heard on the pending matters; that is, the two Bond amendments, which are the subject of the pending votes. Does my colleague from Vermont wish to be heard on the pending amendments?

Mr. DODD

Mr. DODD. Mr. President, 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

Mr. DODD. Mr. President, it is with great sadness that I rise today to remember Tim Russert--a remarkable individual, a journalist, a former staff member in this body, a dedicated husband, and above all else, a father. And I would like to add my voice to the chorus of those who have sung his praises these sad past several days. Tim Russert was a force in American politics--and a force for integrity in our media. For 17 years, millions of Americans have looked to Tim on Sunday mornings for his insight into our political process. From his days serving as an aide to our former colleague from New York, Senator Moynihan, through every minute of his remarkable tenure at NBC, Tim never lost his enthusiasm for vibrant but respectful political discourse. It was in so many ways his lifeblood. Like few others, Tim understood the role politics played not just in the media--but in our daily lives. He saw politics for what it was--not a fight among partisans, but rather the medium in which the diversity of views and values in our society are arbitrated to a national conclusion. In that sense, under Tim's stewardship, ``Meet the Press'' became the premier forum for showcasing the fundamentally decent side of politics that is almost entirely lost today--where people of very different views, backgrounds and perspectives, could come together to debate their differences respectfully and constructively. Indeed, one saw that in Tim's approach to matters of faith--where his own views and values were very formidable indeed. A year ago, Senator Brownback and I shared the stage with Tim at Boston College, where we each talked about our shared Catholic faith and the role the Church played in our lives, shaping our politics and our society. With all the controversy around faith in politics over the last several years, some wondered about the fireworks that could have ensued. But what Tim, a practicing Catholic, wanted was not two Senators delivering sermons, if you will--about how to ``use'' faith as a political weapon. Rather, as someone who once said that the nuns in Catholic school, ``taught me to read and write, but also how to tell right from wrong,'' Tim wanted us to talk about our formative experiences as Catholics. He wanted to engage us in a robust conversation about all that we shared--even in areas we vigorously disagreed with one another. To be sure, in that sense, Tim was very much doing God's work each and every Sunday morning. I was a guest on ``Meet the Press'' many, many times over Tim's years hosting the program. He was without question the most tenacious questioner I have ever known. Never once did I feel like Tim let me off easy. Never once did I feel he was being unfair or trying to score points. Every time I was on, most recently just a few weeks ago, he pressed me, pushed me, poked and prodded me as he did thousands of guests. We were all the same in his eyes--no matter how many years we had been in public life, no matter how accomplished we were. He simply wanted to get at the truth--and if you didn't give it to him, Tim made sure that the whole world would know. Certainly, there are many guests over the years who ``bombed'' on ``Meet the Press.'' One of the things I loved about Tim was that while he might let you embarrass yourself on national television, he would never embarrass you. Part of that was his fundamental decency--but so, too, was it the special appreciation Tim had for his guests, having been on the other side himself, walking these very halls on behalf of our departed colleague from New York. Tim understood as well as anyone what those of us in public life did for a living--and I wish more in his profession were afforded his perspective. Of course, Tim appreciated nothing more than family. Every time I saw Tim, he always wanted to know how your family was doing. Indeed, for all of his famously aggressive journalistic acumen, it is impossible to not mention the other side of that gregarious personality--the warmth and generosity. When I was on ``Meet the Press'' last year, Tim took the time after our interview to jump around and dance with my two young daughters. The twinkle in his eye was unmistakable when you talked family with Tim. Lastly, I want to say a word about one of Tim's greatest legacies, and that is fatherhood--his contributions to what being a father means in America. His call to our responsibilities as fathers and the difference an active, involved, caring father can make in a child's life will be one of Tim's most significant legacies. My colleagues know I have spoken many times on this floor about what my father meant to me--how more than anything or anyone else, it was my father's example that compelled me into public service. Tim and I shared that bond, I think. Indeed, we both wrote books about our fathers--I having published long lost letters from my father as a prosecutor in the Nuremberg Trials, Tim writing two books, including one about the lessons he learned from his father, ``Big Russ'' in Buffalo. At a time when some debate the condition of the American family, Tim's meditations on fatherhood--on the wisdom and character passed down by his father--struck a deep, resonant chord. It was one of the saddest ironies of all that his next broadcast would have been on Father's Day. But perhaps it was meant to be that way--remembering Tim on a day in which we were all celebrating our fathers. Jackie and I send our deepest sympathies to Maureen, Luke, Big Russ, and the rest of the Russert family. Our thoughts and prayers are with them--Tim will be dearly missed.

Mr. DODD

Mr. DODD. Mr. President, it is truly a privilege and pleasure this morning to welcome to the Senate a remarkable individual who opened the Senate with a prayer this morning. He has lived an equally remarkable life and today resides in the community of Southington, CT. In the 80 years we have enjoyed the fortune of having the Reverend Ralph Lord Roy in our midst, he has been an author and columnist, an activist, a teacher, and a radio host, and, of course, a pastor to some 12 different churches and ministries in New York and for some 36 years in Connecticut. At each stop along the way, he has spread the same message: one of justice and tolerance in the face of fear, resentment, anger, and prejudice. In 1961, as part of the Congress of Racial Equality, Reverend Roy was one of the fabled ``Freedom Fighters'' who traveled to protest segregation policies in the South, for which he was arrested in Tallahassee. A year later, he led a prayer pilgrimage to Albany, GA, at Martin Luther King's personal request. For his peaceful protests there, praying for the cause of desegregation, Reverend Roy was also arrested. In leading the largest group of clergy to be arrested in American history in Albany, GA, Reverend Roy became the first Caucasian Methodist minister in our Nation to be imprisoned for standing up for the civil rights of all Americans. The message he and his fellow clergy men and women sent at that moment--some 75 Jewish and Catholic laymen and clerics, most of them White, standing peacefully in solidarity with Dr. Martin Luther King on the sidewalk before the Albany City Hall-- reverberates to this very day. It echoes in the books and articles that Reverend Roy has penned on social and faith issues and in his powerful and personal accounts of his experiences with the slain civil rights leader. It echoes as well in his radio shows and travels across the world. And today, of course, it echoes in the Halls of the Senate. A remarkable 80 years, making a significant contribution to the improvement and the betterment of our great country. So it is truly an honor to welcome Reverend Roy from Southington, CT, who has opened our Senate session this morning with his wonderful, thoughtful prayer. We wish him and his family the very best, and we thank him for his wonderful contributions to our country.

Mr. DODD

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

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

Mr. DODD. Mr. President, let me begin by thanking the majority leader, Senator Harry Reid of Nevada; the Republican leader, Senator Mitch McConnell of Kentucky; and the respective Members of our two parties, but particularly the leadership for their ability to make it possible for us to move forward on this very important piece of housing legislation. We have been at this for some time. Every Member in this Chamber, as well as the American people, realize the seriousness of the problem we face as a nation. We have a serious economic crisis in the country, and the heart of that economic crisis is the housing crisis. The heart of the housing crisis is the foreclosure crisis. Let me begin this discussion by noting that several months ago on two previous occasions we dealt with housing legislation--which I will point out is a part of this larger package today--and at that time we were having about 7,100 foreclosures a day. At least that was the number of filings of foreclosures when I first announced the level of foreclosures that were occurring. The numbers from May have just come in. The numbers are now close to 8,500, or 1,500 more than they were even 1 month ago. So we are now approaching 9,000 filings of foreclosures on a daily basis in our country. In light of these numbers, I hope no one will suggest the problem is not a serious and growing one. We have not even hit July 1 yet when, of course, we realize the resets on some of these adjustable rate mortgages will begin to kick in; and as they do, we are warned by those following this issue almost on an hourly basis that the tidal wave of foreclosures will increase in the coming months, not decrease. Obviously, with 1.5 million people who have already lost their homes, we are talking about a problem that is now spreading to commercial lending, municipal financing, student loans, and even having global implications as well for those who purchased these mortgage-backed securities. This is not confined to our own country. These were being purchased across the globe. So the problem begins with the foreclosure crisis, and yet the effects of it have spread far beyond the individual home, which is obviously the heart of most people's dreams in our country. So the fact we were able to have our leadership, and Senator Shelby will obviously speak for himself, but both of us, I can say with confidence, are very grateful to Senators Reid and McConnell for making it possible for us to move forward on this legislation. I will guarantee that if I were able to write this bill all on my own, it would look different. And I promise that Senator Shelby would probably write a different bill himself. But we don't live in a world where we get to write these things on our own. We serve in a body with 100 Members, and we have to work closely with others in the Chamber and the other body with 435 Members. We have a White House and an administration with which we have to deal. There are also, obviously, private interests around the country, from consumer groups and lending institutions, all having a deep interest in what we are trying to put together. So it is no easy task to cobble together a piece of legislation that will allow us to deal with this crisis, get us back on our feet again, restore some confidence and optimism among the American people so we can see capital begin to flow again, and thus wring ourselves out of this foreclosure issue and begin to see our economy grow and prosper. That is what brings us to this very moment. I can't begin to express my gratitude to Senator Shelby, who is the former chairman of this committee, to the members on the Democratic side of the Banking Committee, beginning with Senator Tim Johnson of South Dakota, along with, of course, the Republican members as well. On two previous occasions we have brought forth pieces of legislation that have been adopted overwhelmingly by this body with 84 votes on the first bill and 90 votes on the second. On the matter that will be a part of this bill, which has not been considered by the full Chamber, it passed our Banking Committee 19 to 2 back on May 20. So we come to this day having spent a great deal of time working with our colleagues, listening and working with the Members of the other body, as well as those who bring unique and special expertise to these very complicated issues. That is what we hope in the coming days to be able to complete, send our product to the other body, and hope they will endorse and support it, and then send the bill to the President for his signature. With that as background, let me share a few thoughts about what are in these bills. As I mentioned already, most of what we are talking about has been voted on overwhelmingly by the Members of this body. On April 10, the Senate passed the Foreclosure Prevention Act of 2008, and passed it by an overwhelming majority. At that time, I shared my view of the legislation, and that it did not quite live up to the title. I told this body we had more work to do to prevent foreclosures in this country and to strengthen the housing finance system before we could say we had lived up to the name of that bill. I am very happy to report this morning that the Banking Committee of the Senate went back and did that work, and today Senator Shelby and I are reporting back to the Senate the Housing and Economic Recovery Act of 2008. This legislation incorporates all of the housing provisions of H.R. 3221 as it passed the Senate on April 10 by a vote of 84 to 12. It also includes the HOPE for Homeowners Act of 2008, which will help at least 400,000 families, we are told, and maybe more, to save their homes from this fate of 8,427 foreclosure filings a day. We need to try to put a break on that, if we can, and spare what it does to individual homeowners. The bill creates a new, strong, independent regulator for the housing government-sponsored enterprises--the so-called GSEs, Fannie Mae, Freddie Mac, and the 12 Federal home loan banks. It also establishes a new permanent fund that will help build affordable rental housing for low- and moderate-income families. I will review these titles in more detail momentarily, but first let me remind my colleagues why Senator Shelby and I have been working so hard on this issue for the past number of months and throughout this entire Congress. Quite simply, we are living through the worst housing market since the Great Depression of the 1920s and 1930s. Here are the facts, Mr. President. Residential construction in the United States fell by over 30 percent in the first quarter of this year. Sales of existing homes fell by 13 percent over the past year. And while the new data for April indicates that sales may have finally picked up slightly, most analysts believe that pickup in home sales occurred only because home prices have continued to fall. They call this ``price capitulation,'' which means homeowners finally gave up and are dropping prices precipitously at a great loss to their financial security. The number of new homes that remain unsold continues to rise, reaching the highest number in over a quarter of a century. Adding to this number are the increasing number of foreclosed homes. Foreclosures have hit a new all-time record, according to the Mortgage Banker's Association--MBA. This data shows that almost one in every 11 homes with a mortgage in the country is in default or foreclosure, as of the end of March. That is the highest level since the MBA began tracking foreclosures in 1979. Foreclosure rates have been growing at record levels for some time and last year alone 1.5 million American homes entered into foreclosure. During each and every day of May, more than 8,400 American families entered foreclosure and the projections are that foreclosure rates will remain at historic highs for the foreseeable future. In fact, the investment bank Credit Suisse recently released a report in which they predict that 6.5 million homes will fall into foreclosure over the next 5 years. They state: The coming flood of new foreclosures could put 8.4 percent of total homeowners, or 12.7 percent of homeowners with mortgages, out of their homes. The scenario that they are describing is one in which one out of every 8 American families with a mortgage would lose their homes. That is a chilling prediction. The effect that this is having on our economy cannot be overstated. Martin Feldstein, who served as President Reagan's chief economist, recently wrote in the Wall Street Journal: The 10 percent decline in house prices has cut household wealth by more than $2 trillion, reducing consumer spending and increasing the risk of a deep recession. That means that American families have lost more than $2 trillion of wealth. Losses of that magnitude are staggering. That is almost 20 percent of our Nation's annual GDP. Put another way, a national loss of wealth of $2 trillion means that a typical family of four will have lost over $25,000 of wealth due to the current housing market crisis. This sharp loss in wealth for the average American homeowner comes at a time when they face record-high prices for the essentials of American life--food, gas, health care, and higher education. So the so-called foreclosure crisis is affecting more than those facing foreclosure. It is affecting nearly all of us. As one home falls into foreclosure, the values of countless other homes decline rapidly, if not immediately. Robert Shiller, the widely respected economist, predicted recently that home prices will fall by 30 percent nationally. If that happens, the loss to American families will exceed $6 trillion. That is more than half of our Nation's annual GDP. It would mean that the typical family of four would have lost approximately $80,000 of wealth. That is more than most American families earn in an entire year. The nationwide implications of this crisis help explain why consumer sentiment is at historic lows. Americans' expectations for future economic growth are at the lowest levels in 35 years, since the deep recession of the early 1970s. These negative views about our economic prospects are based on the real experiences of most Americans. The Pew Center recently conducted a survey on Americans' views on not only the economy as a whole, but on their personal well being. The Washington Post characterized the Pew Center's findings as: Offering the gloomiest assessment of economic well-being in close to half a century, a new survey has found that most Americans say they have not made progress over the past five years as their incomes have stagnated and they have increasingly borrowed money to finance their lifestyles. By almost any measure--by any measure, Americans are struggling more than at any time in recent memory. Real median family income has fallen this decade as the costs of gas, health care, and college tuition have risen at levels far outstripping any increases in paychecks. Just to keep pace with these rising costs, Americans have turned to borrowing from credit cards and their homes. But now, as the crisis in our capital markets begins to threaten sources of liquidity for people, such as mortgages, student loans and other types of lending, the American economy is in a precarious place. That is why we need new policies and new action to prevent this recession from becoming more severe, and to lay the foundation for our recovery. We have a responsibility to the American people to respond to their plight and to their pessimism, and to renew their confidence in the promise of the American dream. The package Senator Shelby and I bring before the Senate today meets this test. Is it perfect? Hardly. Never is there a piece of legislation that is perfect. Would either of us have done it a bit differently? I am confident we would. Are we guaranteeing it will work? Absolutely not. All we know is this is our best judgment, having worked together now for the last year and a half to listen to people at some 50 different hearings on a wide range of subject matters. Then we put together legislation that has enjoyed, I say again with thanks to our colleagues, overwhelming support in this Chamber on a bipartisan basis. That is not something we have done with great frequency, I might point out, in recent years. The package is a good one. It is one we think covers many of the issues, if not most of them, with which we are grappling. Let me review the major provisions included in this package. First, FHA Modernization. FHA Modernization will help hundreds of thousands of homeowners gain access to safer, more affordable loans. FHA does not insure the kinds of risky, adjustable rate mortgages that so many homeowners were steered into, to their great peril and eventual sorrow. I want to point out to my colleagues that the only change from the FHA Modernization provisions passed in April is hat we have increased the maximum loan limit to $625,000, a provision that will expand the reach of this crucial mortgage lifeline to a broader cross- section of the country. Veterans housing provisions--a number of our colleagues included important improvements to update the loan limits for VA loans; assist returning soldiers avoid rising mortgage rates and foreclosure; and expand housing benefits to disabled veterans. CDBG funds--the bill includes about $3.9 billion in emergency CDBG funds directed to those communities most affected by the foreclosure crisis. These resources will be used to buy foreclosed homes at a discount, renovate them, and return them to the market. These funds will help turn around neighborhoods decimated by disinvestment by bringing in new capital to start rebuilding homes and communities. Counseling Funds--the bill also includes $150 million in additional funds for housing counselors to help keep people out of foreclosure. There are many Members who care about this and were involved and talked about it. This language we have already adopted, but it is in this bill as well. The HOPE for Homeowners Act of 2008, another provision in this legislation, creates a new fund at FHA to make loans to distressed borrowers to refinance them out of mortgages with payments they cannot make into safe, affordable, 30-year fixed rate loans. Only homeowners--not investors or speculators--will qualify for these loans. And the lenders must agree to take steep discounts from the existing outstanding mortgages. Only homeowners who cannot afford their current payments will qualify, and, once they take out the new loan, they will have to agree to share all newly created equity and future appreciation with FHA to help defray the Government's cost. We have heard many people voice concerns about this bill, calling it a taxpayer bailout. Let me assure my colleagues, the Congressional Budget Office makes it clear that no taxpayer money will be used to fund this program. We pay for this important new program by all or part of the first 3 year's funding from the affordable housing fund created in the GSE portion of the legislation. Then we have an additional $2 billion cushion at the Treasury Department, should there be any negative implications. In fact, according to the CBO, this program will make nearly $250 million for the taxpayers over the next 10 years. In return, we will be saving the American dream for hundreds of thousands of elderly and hard-working families; stopping the bleeding in our communities; and helping restore confidence in our capital markets. Finally, this package establishes a new, independent, world class regulator for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, known as the housing Government-sponsored enterprises, GSEs. The legislation endows this regulator with broad new authority, equivalent to the authority of other Federal financial regulators, to ensure the safe and sound operations of the GSEs. Let me recite the powers included in this legislation: Establish capital standards; establish prudential management standards, including internal controls, audits, risk management, and management of the portfolio; enforce its orders through cease and desist authority, civil money penalties, and the authority to remove officers and directors; restrict asset growth and capital distributions for undercapitalized institutions; put a regulated entity into receivership; and review and approve, subject to notice and comment, new product offerings. As we all know, the housing GSEs have played the central role in keeping the mortgage markets functioning. Yet in recent months, like many others in the mortgage industry, Fannie Mae and Freddie Mac have lost billions of dollars. It is their very importance that makes it imperative that we assure ourselves, and the American people, that the GSEs are on solid financial footing so they can continue to serve that crucial function. A strong and of active regulator can help make sure that the GSEs continue to operate in a safe, sound, and effective manner. The new legislation significantly enhances the affordable housing component of the GSEs' mission, and expands the number of families Fannie Mae and Freddie Mac can serve by raising the loan limits in high-cost areas to 150 percent of the comforming loan limit. Currently, this limit would be $625,000. The legislation tightens targeting requirements of the affordable housing goals, and rewrites those goals to ensure that the enterprises provide liquidity to both ownership and rental housing markets for low- and very-low income families. Finally, the legislation creates a permanent, new Housing Trust Fund and a Capital Magnet Fund, financed by annual contributions from the enterprises, which will used for the acquisition or construction of affordable rental housing, some ownership housing, and economic development for low-income families and communities. This new affordable housing fund--financed fully by the enterprises-- will provide a steady stream of financing to build housing for those most in need. The Capital Magnet Fund requires that each dollar leverage at least an additional $10. Together, these programs will provide billions of dollars for new affordable housing in years to come. I want to acknowledge the important contributions of Senator Jack Reed to this part of the legislation. This is going to be a permanent program that will make a difference for millions of people in years in come. I thank my ranking member, Senator Shelby, and his staff, for their hard work to reach consensus on this whole package. This is what we are supposed to be doing. This is what we get elected to do. We don't get elected to decide exactly what we want to do at the expense of everyone else. It means sitting down and working together to come up with solid ideas that can make a difference in our country. Today, 8,427 people are going to start to lose their homes. Tomorrow another 8,427 will have that happen, and that will happen every single day until we do something to bring this to a halt. That number has gone up by 1,000 families in the last 2 months. We cannot waste another day. There is no other issue which demands our attention and our action more than this one, and any effort to be dilatory and to stop us from saving these people and keeping them in their homes ought to be rejected by every Member of this body. This is a cancer in our society, and it is causing us deep problems. We need to do something about it. Senator Shelby and our staffs and the members of our committee have worked hard and long to bring this package forward. It enjoys broad-based bipartisan support, as we hoped it would. Now we have a chance to complete action on this and to make a difference and to say to the American people: In this Congress, we did something. We stepped up and tried to make a difference for that great dream of home ownership, of raising your family in a decent house, of being able to provide for your long-term security, of making a difference for your neighborhoods and communities. We are going to do everything we can to see to it that these numbers decline, that foreclosures at this rate on a daily basis are going to stop in our country. Again, we say to you, we realize not everyone agrees with what we are doing here. You never can here. I have been here for 27 years. The greatest moments of this body are where people have come together to try and make a difference, not trying to get their own way all the time. You are part of a larger body representing a great country. And even though you come from one State and one area of the Nation, we all have a job to do, to take care of all of us in this country. While this problem does not affect every citizen of the country, it is growing. If we do not do something soon about it, we will be indicted by history for not doing it. I thank my great friend from Alabama, who has been a great chairman of this subcommittee, been a great member of this committee, and he has worked awfully hard to bring us to this moment. I am grateful to Harry Reid and to Mitch McConnell for making it possible. I yield the floor.

Mr. DODD. I thank my colleague from Alabama. I want to read this list into the Record to give our colleagues some sense of the broad support this proposal has developed. Let me quote from several of our major editorials as well as major economists representing the political spectrum in our country. I will share this with you. Alex Pollack, resident fellow at the American Enterprise Institute: This is an appropriate and targeted approach to the downward spiral caused by the deflation of the great housing and mortgage bubble of the 21st century. Alan Blinder, an economist at Princeton University and the former vice chairman, Board of Governors of the Federal Reserve System: I think that the HOPE for Homeowners bill is the most important piece of economic legislation before the Congress today. The Miami Herald: The Senate represents a bipartisan compromise that deserves wide support. The Boston Globe: There is no bailout or windfall here. Congress is merely offering a fighting chance for families and credit markets to recover. Newsday: The Senate program is called Hope for Homeowners. That's just what families facing foreclosure need. Fran Grossman, the senior vice president of Shore Bank in Chicago: With millions of hard working Americans torn between looking for work and putting gas in the tank or paying their mortgage, we must enact legislation to provide access to the resources that will help families to hold onto the American dream and get our economy moving again. Robert Shiller, as I pointed out earlier, supports this legislation. He is highly respected, by the way, as someone who deals with the issue of the index dealing with housing values. Again, groups from the American Enterprise Institute to the Consumer Federation of America. Alan Fishbein. Let me quote him: With foreclosures on the rise a stepped-up Federal lifeline is desperately needed if many hard-pressed families are to save their homes. From the Consumer Federation of America to members of the American Enterprise Institute, former members of the Federal Reserve Board, members of the Reagan administration, the Council of Economic Advisers, others, all are advocating--and I am not suggesting dotting every ``i'' and crossing every ``t.'' But they have taken this work of Senator Shelby and 17 of our other colleagues of the 21-member committee, 19 out of 21 having gone through all of the hearings, 50 of them over the last year, listening to all sorts of people talking about what needs to be done. It is now the bipartisan overwhelming majority opinion of us on that committee that this package we offer here is our best step forward. Having done the work for a year now, spending the hours that we have listening to people and getting solid advice, this is what we believe, as they believe, is the best response America can make at this moment. Remember, this HOPE for Homeowners is voluntary; it does not mandate anything. It creates an opportunity for people. We hope they will take advantage of it when this legislation is signed into law. I yield the floor and suggest the absence of a quorum.