Byron Dorgan

Mr. DORGAN

Mr. DORGAN. Madam President, I wish to talk about what is happening in the economy, the consequences, a bit about what happened yesterday, and what I think we should do going forward. Yesterday, as most Americans now know, the stock market had a very significant down day--777 points down. Today it is up over 300 points as I speak. We have gone through a very difficult time for a long period of time in this country. I wish to talk about the causes of it and the consequences of it. I am not going to, as some do, come to the floor to describe one party or another that is responsible for this or that. I don't think that is particularly helpful today. But I do wish to say that, tracking back to a couple of significant events--one in 1999 when the Congress, without my support, passed a piece of legislation that essentially repealed what is called the Glass-Steagall Act. This legislation was put in place by Franklin Delano Roosevelt during the Great Depression to protect banks and depositors by separating banks from riskier enterprises of real estate and securities--I pulled out some of Franklin Delano Roosevelt's radio addresses. Here is an address he made in 1933. As my colleagues know, this is a President who had to confront the Great Depression, and here is what he said: We had a bad banking situation. Some of our bankers have shown themselves either incompetent or dishonest in their handling of the people's funds. They had used the money entrusted to them in speculations and unwise loans. This was of course not true in the vast majority of our banks, but it was true in enough of them to shock the people for a time into a sense of insecurity . . . It was the government's job to straighten out this situation and do it as quickly as possible . . . After all, there is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people. You people must have faith; you must not be stampeded by rumors or guesses. Let us unite at banishing fear. We provided the machinery to restore our financial system. It is up to you to support it and make it work. That was Franklin Delano Roosevelt in 1933. In 1934, he said this: The second step we have taken in the restoration of normal business enterprise has been to clean up thoroughly unwholesome conditions in the field of investment. In this we have had assistance from many bankers and businessmen, most of whom recognize the past evils in the banking system, in the sale of securities, in the deliberate encouragement of stock gambling, in the sale of unsound mortgages and in many other ways in which the public lost billions of dollars. They saw that without changes in the policies and methods of investment there could be no recovery of public confidence in the security of savings. Sounds a little like today, although Franklin Delano Roosevelt then took very aggressive steps to say we are going to separate banking from risk. You are no longer going to be able to have an FDIC-insured deposit institution called a bank and merge it with the speculation in real estate and securities. You just cannot do it. The Congress passed, at the President's request, something called the Glass-Steagall Act. That lasted for nearly 80 years, until 1999, when it was repealed. There was a story this morning in a Wisconsin newspaper quoting me and quoting my late colleague, Paul Wellstone, who sat at the end of that row. We both spoke on the Senate floor. There were eight of us who opposed the Financial Modernization Act, they called it, because they always wrap bad things in good names. The Financial Modernization Act, what a misnamed act, but it repealed the Glass-Steagall Act. It set the stage for large financial holding companies. It set the stage for banks to be engaged in more risk. They said: We have to do this to move forward. Senator Phil Gramm actually led the charge. Gramm-Leach-Bliley was the name. Modernization they called it. Some of us said it was going to be an unbelievable debacle. Here are a couple things I said when it passed the Senate the first time: I say to the people who own banks, if you want to gamble, go to Las Vegas. If you want to trade in derivatives, God bless you, do it with your own money. Do not do it through the deposits guaranteed by the American people. Further, I said on the same day on the floor of the Senate: This bill will, in my judgment, raise the likelihood of future massive taxpayer bailouts. I wish I had been wrong. I take no joy in being right. When the bill came back in November as a conference report and eight of us voted against it in 1999, I said: Fusing together the idea of banking, which requires not just safety and soundness to be successful but the perception of safety and soundness, with other inherently risky speculative activity is, in my judgment, unwise . . . Then I said on the same day in November 1999 before the vote: We will in 10 years time look back and say: We should not have done that Repeal Glass-Steagall-- because we forgot the lessons of the past. What did we allow to happen as a result of all of this? We have seen today a substantial amount of activity as a result of the collapse on Wall Street and in the banking industry. Here are just a few of the actions most recently. J.P. Morgan decided to buy Bear Stearns because Bear Stearns was going to go belly up. And over a weekend, they worked, and the Federal Reserve Board and the Secretary of Treasury said the taxpayers will put up $29 billion so that J.P. Morgan can buy Bear Stearns so Bear Stearns doesn't have to go belly up. I was looking in the Wall Street Journal today, and there is something about Bear Stearns. It is kind of interesting because it relates to what I am going to talk about in a whole range of these areas. It relates to something I call ``dark money.'' That is a massive amount of money, essentially like money in a casino, that is moving around speculating that no one can see, no one knows who has it, where it is, how much it is. This article is entitled ``Too Much Money Is Beyond Legal Reach,'' from the Wall Street Journal. It talks about the ``$1.9 trillion, almost all of it run out of the New York metropolitan area, that sits in the Cayman Islands, a secrecy jurisdiction. And another $1.5 trillion is lodged in four other secrecy jurisdictions.'' Then they say: Most recently, two Bear Stearns hedge funds, based in the Cayman Islands, but run out of New York, collapsed without any warning to its investors. Because of the location of these financial institutions--in secrecy jurisdiction, outside the U.S. safety net of appropriate supervision--their desperate financial condition went undetected until it was too late. You run the dark money through hedge funds, through Bear Stearns, through the Cayman Islands, it all goes belly up, no one even knows it is there. Then we have to find in a weekend that the American taxpayers should put up $29 billion so that J.P. Morgan can bail out a failed Bear Stearns. Madam President, $300 billion immediately following that was available to investment banks that are unregulated because the Federal Reserve Board said: Investment banks can come to our loan window and get loans directly from the Federal Reserve Board. Never in the history of this country has that been allowed. Only FDIC-insured regulated banks could do that. It is estimated that $300 billion in direct loans from the window of the Federal Reserve Board went out to unregulated Wall Street firms. Then bailing out Freddie and Fannie. J.P. Morgan Chase in Lehman financing. They have been around since the Civil War and went belly up through bad investments. AIG, the insurance company, goes belly up, and so there is an $85 billion loan provided by our Government to prevent their failure. Why did they fail? We are told a small unit in England with about 375 employees were engaged in something I will talk about in a bit, credit default swaps, which is essentially a huge gamble, and it pulled that whole company down, so the Federal Government had to bail them out with $85 billion. And $50 billion has now been pledged as guarantees for certain money market funds. In recent days, Washington Mutual, a big bank, had to be taken over. Then in more recent days we have had Wachovia bank subsumed. Here is what is happening. We have all these financial institutions we are told are too big to fail, which means we guarantee them. The Federal Reserve Board has a list of firms too big to fail. They are apparently not too big to regulate, just too big to fail, so the American taxpayer has to guarantee it. Here is what has happened as a result. Bank of America buys Merrill Lynch. Washington Mutual is put on top of J.P. Morgan Chase. Citigroup, yesterday, buys Wachovia. What we have done is continued to consolidate even bigger and bigger firms. These three firms comprise almost one- third of all the banking activity in America now. Too big to fail? What is the answer? Make them bigger. It doesn't make any sense to me, but that is exactly where it is going. Let me describe what I think is no-fault capitalism. You have all this dark money, and what has happened is you have had all of these fancy financial engineers who have concocted in recent years since 1999--since the shackles were taken off to do whatever they want, by and large, and since this administration came to town bragging it wasn't going to regulate. We hired the regulators, paid the regulators, but they boasted they were not interested in regulating anything. I am quoting Steven Pearlstein who wrote a terrific piece on this earlier this year: Wall Street has been brilliant at dreaming up other financial innovations that picked up where junk bonds left off. These included complex futures and derivatives contracts; loan syndication; securitization; credit default swaps; off-balance-sheet vehicles; collateralized debt obligations . . . And on and on. What happens is this financial engineering that was so brilliant put everybody at risk--everybody. He says junk bonds were the first. I know something about junk bonds because I am the person who passed the legislation that brought down that market on junk bonds when, in fact, Michael Milken, sitting in his car in the morning riding as a passenger, going to work at Drexel Burnham, was wearing a miner's hat with a lamp on it so he could study his financial sheets. What he was doing is creating junk bonds and parking them in federally insured institutions. The hood ornament of the excess back in those days was that the American taxpayers eventually ended up having to own and take possession of nonperforming junk bonds in one of America's largest casinos. Think about the stupidity of all that. I passed the legislation that shut that down, so I know about those excesses. Now we have credit default swaps and CDOs and so many other exotic instruments and, by the way, so complicated that a lot of people don't even know what they are. Even those who have issued them cannot very easily understand them. What they have done is been able to hide risk, liabilities and losses from investors. ``They have given traders a greater ability to secretly manipulate markets,'' Mr. Pearlstein says, and I agree. Let me talk about this chart, the no-fault capitalism portion. Merrill Lynch went belly up. What did the CEO of Merrill Lynch make last year? He made $161 million for running a company that got into trouble and had to be purchased. I don't understand. John Mack, Morgan Stanley--they got into trouble--$41 million compensation last year. Bear Stearns, the first company I mentioned, we had to arrange the purchase, the American taxpayers had to put up $29 billion to guarantee it, and the CEO of Bear Stearns made $34 million last year. Lehman Brothers went belly up. The CEO made $22 million last year. Washington Mutual went belly up. The CEO made $14 million last year. By the way, they just had a new CEO, or did. He had been on the job 3 weeks and signed a contract for a $7 million bonus for signing and a $12 million termination fee. I understand that has been voided. But it just shows you the same money is ricocheting around in the halls of these firms. AIG, Martin Sullivan--we had to bail out AIG he made $14 million last year. The question is, Where is the discipline? There is so much money ricocheting around Wall Street from all of these issues, and now we are told they all went sour. There are toxic, mortgage-backed securities, and the American taxpayers somehow have to come up with the money. Let me talk for a moment about hedge funds. Warren Buffett once called hedge funds ``financial weapons of mass destruction'' because of the damage they can do to Wall Street in an instant. I just talked about some $20 million, $160 million for folks running failed institutions. Let me talk about the big income earners. The big income earners were John Paulson. He was the top of the heap last year. John Paulson made $3.7 billion. That means when he came home from work and his wife said, How did we do this month, sweetheart? he said: Well, we made $300 million this month. Madam President, $3.7 billion. Or perhaps he would say to his spouse: I made $10 million today. That would be more accurate--$10 million a day. John Paulson was the top income earner last year. How did he make that money? In a hedge fund he bet very big in the drop of housing values and made $15 billion for his hedge fund. By the way, he also hired former Federal Reserve Board Chairman Alan Greenspan as an adviser. Yes, that is the same Alan Greenspan who was content to be an observer as this housing bubble burst, as predatory lending existed, and all these exotic instruments and all those mortgages I will talk about in a moment were created and traded. Nothing really seems too wacky these days in the world of finance. There are some wonderful and creative people who work in finance and who run America's corporations and, by the way, many of them are worth their weight in gold. But what I see here is a form of no-fault capitalism in which a substantial amount of money is paid to some who run these corporations right into the ground, run their financial firms right into the ground with unbelievably risky bets on credit default swaps, collateralized debt, in which they back their balance sheet with risk, in some cases even move it offshore to tax haven countries at unbelievable risks, and then the American taxpayers are told: You know what. It didn't work very well, and you need to pay for it. Let me go through the roots of this situation. I have done this many times. But as people sit on the edge of the chair watching what is happening to the Dow Jones Industrial Average today, they need to understand what is the root rot that exists out there, what is spoiled and rotten at the bottom. Let me describe what happened. It is not very complicated. Almost every American has heard the radio and television ads over recent years: You know what you really need to do is get a better home mortgage, and we have one for you. We will give you a home mortgage where you get a 2-percent interest rate. Yes, that is right. Sounds unbelievable; it is not. We will give you a 2-percent interest rate on your home mortgage. We are not going to tell you, at least not very loudly, that it is going to reset in 3 years to 10 percent, but we can get you in at 2 percent. And by the way, home values are increasing. Get this loan at 2 percent, cut your monthly mortgage payment by two- thirds, and then, if 3 years from now you can't pay the reset mortgage, you can sell the house. Between now and then, you will make a lot of money anyway because home values are continuing to go up. That was the sales pitch. So here is what happened all around this country. Here is Countrywide mortgage bank. They were purchased. They were run by a guy named Mozilo. He was given the Horatio Alger Award. Barron's named him one of the 30 most respected CEOs in America. In 2006, he made $142 million. As he was touting his company's stock, the New York Times reports he was selling $130 million of his company's stock, even as he was describing what a wonderful stock it was. But here is what Countrywide said. They were advertising: Do you have less than perfect credit? Do you have late mortgage payments? Have you been denied by other lenders? Call us. That is their advertisement. If you have bad credit, call us. We will give you a loan. The biggest mortgage bank in the country, run by a CEO who made a fortune and then got out--and by the way, he got away with it--before the company went down. But it wasn't only Countrywide. Here is what Millennia Mortgage said: 12 months, no payments. That's right, we will give you the money to make your first 12 months' payments if you call in the next 7 days. We will pay it for you. Our loan program may reduce your current monthly payment by as much as 50 percent and allow you no payments for the first 12 months. Here is a mortgage company saying, get a home mortgage from us and you don't have to make a payment for 12 months. They didn't, of course, say we are going to put that on the back end and that, ultimately, you will pay more for that home, and we are going to increase the interest rate. Zoom Credit. I don't know who the CEO is or what he made, but here is what they said. Credit approval is just seconds away. Get on the fast track at Zoom Credit. At the speed of light, Zoom Credit will preapprove you for a car loan, a home loan, or a credit card. Even if your credit's in the tank, Zoom Credit's like money in the bank. Zoom Credit specializes in credit repair and debt consolidations, too. Bankruptcy, slow credit, no credit--who cares? That is unbelievable, isn't it? So we had all these mortgages put out there, and we had a lot of people buying them, and here is what would happen. Countrywide would get a broker. They would sell somebody one of these mortgages--perhaps call them at home at night and say: You want to cut your home mortgage payment by two-thirds? We have a good deal for you. So they would go to Countrywide, they would securitize the loan, package them together with other loans into what is called a security, and then they would sell it upstream. They would put good loans in with bad loans, subprime with regular. They would cut them, slice them and dice them and hedge funds and investment banks and others would buy them. They didn't have the foggiest idea what they were doing. By the way, the rating companies were rating these as pretty good securities. So everybody was fat and happy and making lots of money. Now, the result is that all these companies--and Wachovia is a good example because Wachovia was bought by Citigroup yesterday. Wachovia bought a company called Golden West about a year and a half ago, and Golden West was putting out these options mortgages. By the way, these are mortgages in which they advertise, we will give you a no documentation mortgage. You don't have to document your income. Or we will give you a no doc or low doc loan. No doc meaning you don't have to document how much money you make. They also say that if you can't pay all your principal, that is okay. You can pay a part of the principal of the mortgage. Or you don't have to pay any principal, just pay interest. Or you don't have to pay any principal or all the interest, just part of the interest. Or with Millennia, you don't have to make any payments for the first 12 months. It got better and better and better. Why did they do that? Because they were locking people into bad mortgages--mortgages with teaser rates, very low, 2 percent in some cases, to be reset to a much higher rate in 3 years--and then they would lock in a prepayment penalty so you could never get out of it. Or to get out you would have to pay a huge penalty. Then they would sell it upstream. As they sold it upstream, they would sell a security that promised a 10-percent interest rate in 3 years with a prepayment penalty so it was unlikely the person could get out of it, and that security then had a higher yield. All these folks were amazed that they were able to buy securities with such a wonderful rate of return. In the meantime, of course, it all collapsed. Because all those securities got out there on the balance sheets of these companies buying these securities in the name of greed--big returns. Then it all turned sour and began to smell like rotten fish, lying out there on the balance sheets, these nonperforming assets. It all turned sour. It began to pull under companies that were unwise enough to make these investments, and they were companies all over the country. I mentioned some of the ways they did it. This is describing part of it. No documentation loans, low documentation loans. Even as we talk about its impact on the economy, if you think this has stopped, it has not. There is a credit lockup in this country, they say. Probably so, in some areas. But I went to the Internet a couple days ago and I found, under a search for a no doc income loans, I found 325 different places on the Internet that provide these kind of home loans right now: No credit check. Bad credit loans. It has not yet stopped. Here is part of what I found on the Internet. Easy loan for you. Do you have bad credit? Get approved today. You can go find that on the Internet right now. Here is another one you can find on the Internet right now: speedybadcreditloans.com. Think of that. How unbelievably ignorant, speedybadcreditloans. When we face the crisis we now face because of this unparalleled greed and the toxic mortgage-backed securities that exist on the balance sheets of all these companies, threatening to bring down these corporations, and they are still selling them. SpeedyBadCreditLoans. Bad credit, no problem. No credit, no problem. Bankruptcy, no problem. I think I have described what has put out a substantial amount of toxic investments throughout this country, which has caused unbelievable chaos not just in this country but across the world. I think there are a number of things we ought to do. I know the discussion yesterday was about a $700 billion bailout, or rescue fund, that did not survive in the House of Representatives. I hope now those who are going to put together some changes to that plan--I assume there will be some changes, and I do support some of the discussion today about increasing the size of bank accounts that are FDIC insured from $100,000 to $250,000. If we had changed that over time for the value of money, it would be well over $200,000 now. So I believe it would be useful and provide some confidence to provide that additional insurance to a $250,000-per-account level. But I strongly feel that a couple other things have to be done. We can't let this moment pass, and we can't have this economy in peril because of the greed and the avarice of some who decided to take dramatic risks and to gamble with other people's money. We can't do that. We can't proceed without deciding we are going to regulate hedge funds and regulate the trading of derivatives. We cannot do it. Where I come from, you call that leaving the gate open. You have to close the gate. In 1999, and even beyond, these institutions and traders and others were allowed to go hog-wild here and do almost everything with almost no supervision and no regulation. We have to learn from that and understand that part and parcel of this action by the Congress has to be re-regulation. Now, I have talked about the three Rs that are necessary, and I believe you have to do all of it here. I am willing to support something that deals with some kind of recovery. I understand the need to address this. But I also think you have to do some reform and you have to do some regulation at the same time. You can't say to the American people, by the way, ante up a bunch of money for recovery and forget reform and forget regulation. If we don't patch that which we tore in 1999 and decide to take apart again the fundamental banking functions of the federally insured institutions, if we don't separate them from the inherent risk that exists in investment banking and others, where they take these risks with things such as swaps and collateralized debt obligations and others, if we don't understand the lesson, we are destined to repeat it, just as sure as I am here. You have to have reform. Reform is to back up some steps and to decide to protect the banking institutions from excessive risk. Regrettably, we went in the wrong direction in 1999. I think we need to go back some ways. Second, there is so much dark money out in this economy that you can't see. Hedge funds. We must have a regulatory provision for hedge funds. I am not suggesting the recovery bill itself has to describe the specific set of regulations, but the bill can, as it has in a couple other areas, describe a rulemaking process for regulating hedge funds. The same is true with respect to derivative trading. We have been told there is somewhere around $62 trillion in notional value of credit default swaps out in this country. Most people think that sounds like a foreign language. They wouldn't even know what it is. It is an unbelievable amount of insurance out there against securities that have become toxic--securities that are lying and smelling, fouling in the bowels of the balance sheets of some of these corporations. We have to do something that does reform and regulation. There may never be another moment to be able to do it. I understand a whole lot of folks have been opposed to this for a long time. I have pushed it for years on the floor of the Senate. Senator Feinstein, I, and many others have been pushing for regulation of hedge funds and the regulation of derivative trading. But as I indicated when I started, when you have a Bear Stearns that has derivative or credit default swaps running through the Cayman Islands and they go belly up, and nobody even knew it was there--and they helped pull down this firm--then you wonder how does that happen outside the gaze or view of regulators? How on Earth does that happen? We have, unfortunately, been looking only at this question of providing the funding. As I said, I am willing to consider a process that deals with rescue. I am willing to consider that. But I believe that if we move past this moment and don't address the reform and the regulation piece, we will be back again--maybe in 5 years, maybe 10 years. We will be back again, almost certainly. Warren Buffett once said, when I talked to him on the phone, that there is an old saying on Wall Street: You can't see who is swimming naked until the tide goes out. Well, you know what, the tide is going out. We have lots of trouble, and now we see the consequences of unbelievable, rampant speculation in institutions that should have known better. We have to try to protect the financial system of the United States from collapsing. I understand that. We have to do that. But we cannot possibly ask our constituents to believe in that mission if we don't also provide the regulation and reform that must accompany it. We can't do half a job. As I indicated, I am not suggesting that legislation has to, in the 130-some-page bill, describe exactly how you regulate hedge funds or how you regulate derivative trading. But I do believe we ought to describe a specific date by which a rulemaking process proceeds for that regulation.

Mr. DORGAN. I would be happy to yield.

Mr. DORGAN. That is correct. My point was, that which has occurred that has caused this unbelievable collapse, I think the Senator from New Mexico would agree that what has precipitated this is the massive amount of failure out there of mortgage-backed securities that are held on the balance sheets of these financial institutions. They turned out to be sour. It has begun to pull down on some of these institutions. My point was that you can go to the Internet today and you can find exactly the same kind of irresponsible advertising that existed for a long time, including the biggest mortgage bank in the country, Countrywide, which is saying: Bad credit, come over here, we will give you a loan. The same things exists. Go to the Internet today, and you will find exactly the same kind of advertising.

Mr. DORGAN. It has.

Mr. DORGAN. Well, let me talk about the banker's role for a minute, because the way the Senator describes it is part of my concern. It used to be that when you bought a home, you would go down to the local savings and loan or the local bank and try to negotiate a home loan. Then sitting across the desk, they would evaluate what kind of job do you have, how much family income do you have, how secure is your job, is this a loan we want to provide to you because of the risk, and so on. They would make a judgment about you. They would check your credit rating. That is the way it would work. It doesn't work that way in most cases now. It does in some cases, in most cases not. This has become a big go-go effort to get home loans out there, securitize them, and sell the mortgage-backed securities. So when we are talking about banks buying mortgage-backed securities, I asked the question: Why should they be buying mortgage-backed securities? They shouldn't even have the right to buy mortgage-backed securities that are cut into these little pieces of sausage and sent upstream when they do not even know what is in them. How many of them are subprime? They don't have any idea. All they see is an advertised yield that says: Well, if I buy this security, I am going to get a big, fat income from it. Going back, I would like to see us get back to the day when a mortgage is something negotiated across the desk from the local banker. I would like to see the day when you can take a look at the balance sheet of a bank--and I would say in my home State most of our bankers have not been engaged in this at all. They do not have toxic mortgages, by and large. They have not invested in these things. But this became a go-go industry--I described some of them, and I will do it again in a minute--with massive amounts of money being made, on Wall Street, I might say. So Wall Street was wallowing in cash. You know it and I know it--I mean, the highest income earner last year, $3.7 billion; that is $300 million a month, $10 million a day. So I understand why the American people are angry. They are saying, you know: If you have to do something to rescue the financial system, for gosh sakes, don't let the system collapse, but they also say: Let's clean up this carnival of greed that existed around here that caused this to happen. So that is why I think the American people--I do not know who uses the term ``bailout'' or ``rescue,'' but that is why the American people looked at this and said: Wait a second, I want you to do the whole job, not half a job. In my judgment, half a job is putting up whatever money you need at this point. Perhaps there is a better way to do it. Perhaps we ought to invest in the capital structure of some of the failing institutions and get a return from that. The other side of it is to decide that, in addition to whatever we decide on the money, we are going to re-regulate and reform. If those two things are not in the bill, I hope those who are now negotiating will put that in the bill because I think the American people might better understand what is going to be done.

Mr. DORGAN. I appreciate the comments of my colleague from New Mexico. He has been involved in all of the great debates in this Senate for a long time. I always appreciate his thoughts and comments. Let me say that the collateralizing and securitizing of these exotic instruments was not something that was done for fun; it was because it could become very profitable to securitize everything, roll them up into these little sausage deals and sell them upstream. Everybody was making a lot of money doing it, and nobody knew what was in them. The interesting thing is that at least when you negotiated your home loan across the desk of the banker in the old days, if you found a time when you really could not make your payment--something happened, an illness in the family or something happened--you went back to the bank and sat down and said: Look, here is my situation. Can we work something out? And the banker, in most cases, would say: I understand. Let's work something out. Nowadays, you do not know who has the mortgage. The local bank does not have it anymore; they have sold it. Countrywide mortgage bank had it. They do not have it for a very long period of time. They have sold it to two or three different people, so you do not even know who has it. That is why, as these things go belly-up, because I think they had predatory lending, I think they had terms in them that were unbelievable, resetting mortgages, and so on. These homeowners were set up for failure, and they have no one to go talk to to work it out. That is precisely why one of the most important provisions that should be in this new agreement, and I hope is in a new agreement, is something that some now strongly object to; that is, in a bankruptcy proceeding, allowing a bankruptcy court to discharge and allow the renegotiation of that home loan. They would allow the renegotiation of a second home or a mortgage on a boat or a mortgage on almost anything else but not the prime home. That makes no sense. If you believe--and I think most people do--that the foundation of this mess we are in is these bad mortgages out there, these toxic securities, then the quickest and best and most effective way to begin putting some sort of a foundation under home values is to allow those with those home loans that are troubled to be able to negotiate with somebody; in this case, through a bankruptcy court, to negotiate that they could continue to pay, albeit at a lower interest rate. At least you would have someone who can stay in their home. You would have someone who is making a payment every month, probably not what they had intended to pay, but they are making the payment. They are in the home. They have provided some value to that mortgage. All of a sudden that provides a foundation. Instead of empty homes and mortgages that are destroyed, you have someone living in the home with a mortgage and making monthly payments on it. That would provide some stability for home values. It would keep some people in their homes. We have 2 million people this year who will have lost their homes. That is pretty unbelievable. My colleague said it would be hard to put together a regime of doing the necessary regulation of hedge funds or regulation of derivatives trading. It would be difficult to do that. I am not suggesting they have to do that. I am suggesting that they mimic what they did in the original bill on a couple other pieces and require by law a rulemaking on the regulation of hedge funds, require by law a rulemaking on the regulation of derivatives by a date certain. They don't have to describe to me exactly what the rulemaking would require in detail or what the regulation would require in detail. At least we ought to expect that we begin to reform and regulate, even as we try to rescue. One of the important things the American people continue to ask--and it is a very important question--is, who is accountable for all of this? Not just how did it happen, but who is accountable? Who has been made accountable? The answer is no one. They all got away with their big bonuses and their money. The consequences are, we are bailing all these organizations out. We are creating bigger banks. These three banks will represent one-third of all the banking business in America now with these new acquisitions. It used to be that we had these folks who were too big to fail. Now we have gotten them too ``bigger'' to fail. So no matter what happens to them, the American taxpayer has to be the backstop. We are going to have to bear the consequences of their failure because they are bigger. They were too big to fail previously. Where is the accountability for predatory lending that was out there? Where is the accountability for brokers who were putting people into subprime loans. They qualified for other loans, but they still put them in subprime. A substantial portion of subprime loans were put to people who would qualify for regular loans. They put them in loans with very bad conditions in which they were almost destined to fail, with higher interest rates being reset in the future. People are also concerned about this issue of compensation. There are some great CEOs in this country. There are people running companies and banks and others who do a great job. But this has been a wild ride for unbelievably excessive compensation. Why is it that we read that Washington Mutual failed and last year the CEO made $14 million? For what? Maybe the board of directors will answer for what. Or AIG, the CEO made $14 million last year. They had a little operation over in London that nearly brought that whole company down. We had to bail them out. Lehman Brothers, $22 million the previous year, Merrill Lynch, $161 million. There is plenty of reason for the American people to take a look at all that and say: That is a carnival of greed, creating exotic financial instruments they can't even explain that are so complicated. Trading them upward and backward and sideways, everybody making massive amounts of money, and then all of a sudden it goes belly up and starts to pull down the entire financial system. All of a sudden we are talking rescue, but nobody is talking regulate. As I said, in my part of the country, they say that is not closing the gate. You have to close the gate. You have to shut the gate. If you don't include reform and if you don't include regulation, we are not going to solve this problem. The next day and a half we will talk a lot about these issues. My hope is whoever is negotiating--I know some, and I have been in meetings last evening on this subject--will understand the need that some of us feel that anything that is done require the issues of reform and regulation that do not now exist in the plan that has been offered. I yield the floor and suggest the absence of a quorum.

Mr. DORGAN

Mr. DORGAN. Madam President, today I applaud the passage of the Native American Housing Assistance and Self-Determination Reauthorization Act of 2008, NAHASDA. This act will continue to provide thousands of homes for American Indian and Alaska Native families. The bill passed today reauthorizes and enhances the Native American Housing Assistance and Self-Determination Act, NAHASDA, adopted in 1996. The act provides formula-based block grant assistance to Indian tribes, which allows them the flexibility to design housing programs to address the needs of their communities. The system set up by this housing law has been very successful in addressing the housing crisis in Indian Country, and this reauthorization will go even further in providing homes to thousands of Indian families who desperately need them. Instead of being a one size fits all national program; it provides grants to tribes, allowing them to tailor housing programs to fit their needs. It has already enabled thousands of families to rent and own homes, and now thousands more will have access to much needed housing. Despite the continued success of NAHASDA, there is still a housing crisis in Indian Country, where 90,000 Indian families are homeless or underhoused. Of those who do have housing, approximately 40 percent of on-reservation housing is considered inadequate, and over one-third of Indian homes are overcrowded. The legislation passed today will strengthen NAHASDA by providing tribes with increased flexibility, with the goal of producing more homes in Indian Country. The bill will allow funds to be utilized for community buildings such as daycare centers, laundromats, and multipurpose community centers, with the hope of not only building homes but also building communities. The bill also authorizes a study to assess the existing data sources for determining the need for housing and funding programs. Adequate housing is the first and most necessary step in building a strong community, and many people in Indian Country have gone on for far too long without a roof over their heads. This bill is more than just a housing act--it will give tribes more authority over their own land and truly help build stronger communities in Indian Country. Mr. President, please allow me to thank Leader Reid, Senator Murkowski, Senator Dodd, Senator Inouye, Senator Akaka and Senator Shelby for their commitment in getting this legislation passed. Thank you to the Senate staff for their hard work on this bill, including Allison Binney, Heidi Frechette, Tracy Hartzler-Toon, David Mullon, Jim Hall, Jenn Fogel-Bublick, and Mark Calabria. Also, thank you to Representative Kildee, Representative Frank, Representative Watt, and their staff, Kimberly Teehee, Dominique McCoy, Cassandra Duhaney, and Hilary West. Finally, this bill would not have been possible without the tireless work of tribal leaders, the National American Indian Housing Council, the National Congress of American Indians, the National Indian Health Board, and Indian housing advocates.

Mr. DORGAN

Mr. DORGAN. Mr. President, are we in morning business?

Mr. DORGAN. I ask unanimous consent to speak as in morning business for such time as I may consume.

Mr. DORGAN

Mr. DORGAN. Mr. President, the discussion late last night and many days before, and perhaps tonight and beyond, is about the financial crisis that is described in this country by the Treasury Secretary and the chairman of the Federal Reserve Board. They have been indicating to us most of this year that we have a strong economy in this country and indicated that there have been some problems with toxic mortgage-backed securities that have gone sour and so they have dealt with them in a number of ways, but still indicated that the economy is essentially strong and the fundamentals are all right. But in recent weeks, especially, step after step taken by the Treasury Secretary and the Federal Reserve Board is to commit American taxpayers' dollars to try to remedy some very serious problems in the economy. The discussion these days--especially in the last few days-- has been about a proposal by the President and his Secretary of the Treasury for $700 billion as a rescue fund for the economy. What most people are not talking about is the fact that we have already committed $1 trillion for this purpose before the Congress would vote on $700 billion more. Let me describe why. When Bear Stearns went belly up, the Federal Reserve Board provided $29 billion to buy Bear Stearns to J.P. Morgan, so that was taxpayer money. That is our guarantee: $300 billion through the Fed window direct lending to investment banks. For the first time in the history of this country, the Federal Reserve Board opened its lending window to nonregulated, unregulated banks. So investment banks go to the Fed: $300 billion. Fannie and Freddie. We assumed the liability of Fannie and Freddie. That is $200 billion. When Lehman went belly up, the funding was provided by the taxpayers for J.P. Morgan to buy Lehman Brothers: $87 billion. American International Group: $85 billion. Propping up money market funds: $50 billion. That is $1.7 trillion in total, $700 billion of which is before this Congress as a proposition by the President for a rescue fund. Now, the reason I wanted to visit about this today is it seems to me this is a proposition--if you equate it to a bathtub--of suggesting that we put water in the bathtub before we plug in the drain, you are not going to fill the bathtub. You are just going to put water in the top and it is going to drain out the bottom. This morning I woke up, as did most Americans, to discover one of America's largest banks had failed and had been purchased by an investment bank overnight. The purchase was arranged by the Federal Reserve Board. So I was curious about this: Washington Mutual, one of America's largest banks. I went back to take a look to see what the president of Washington Mutual earned last year. Obviously, the bank was headed, apparently, toward a crash landing someplace. Well, Mr. Kerry Killinger, the president of Washington Mutual, which was bought last evening by J.P. Morgan, earned $14 million in compensation last year. Fourteen million dollars was paid--to the CEO of a company that last night we were told was going belly up--with insured deposits, so our Government arranged a purchase by an investment bank called J.P. Morgan. Now, there is another piece to the story. Washington Mutual, which failed last evening, not only paid its CEO $14 million last year; it hired a new chief executive officer weeks ago. By the way, the new chief executive officer 3 weeks ago signed with a bonus of $7 million. And we are told this morning that the new CEO, having been on the job 3 weeks for Washington Mutual, now purchased by J.P. Morgan, will keep-- likely keep--the $7 million bonus signed 3 weeks ago, and 12 million additional dollars as a severance. Three weeks' work: $19 million. Now, I was trying to figure out: Here are some folks at the top of the food chain on these big companies, how much money they are making. Well, as I said, last year the CEO of a company that went belly up last night made $14 million, and the replacement, working 3 weeks, will make $19 million. What does $19 million equate to? Well, I figured at $50,000 a year for an average salary in this country, it would take 382 years for a worker to earn what this man is going to get in severance payments and bonuses for a 3-week stint in a failed company. Unbelievable. Absolutely unbelievable. But it is a hood ornament on a carnival of greed that has existed now for some while, unabated, in which people at the top have made massive quantities of money. Then the whole thing comes crashing down because they began creating exotic securities that were supported, in some cases, by worthless mortgages, placed by bad brokers and, in some cases, bad mortgage companies; sold up the chain to hedge funds and investments banks, all of them making massive quantities of money, and then it goes belly up and everybody wonders why. So I asked the question: What do all of these folks make? How much money did they make as this was collapsing? Well, some of these, I am sure, are perfectly good people with good reputations. Stanley O'Neal, people tell me he is a good guy. Last year he made $161 million with Merrill Lynch. Lloyd Blankfein, Goldman Sachs, last year he made $54 million. John Thain, Merrill Lynch, he made $83 million last year. I am just talking about 2007 published compensation numbers. John Mack at Morgan Stanley made $41 million. James Cayne at Bear Stearns made $34 million. Poor Martin Sullivan down here at AIG, that went belly up, he only made $14 million, and we had to come up with $85 billion of the taxpayers' money to backstop this company. The CEO made $14 million last year. I mentioned Washington Mutual went belly up last year; the biggest bank failure in the history of this country. What did the CEO make last year? Fourteen million dollars in compensation. So the question is: What does all this mean? On Wall Street--on Wall Street alone--in the past 3 years--not salaries, bonuses--have represented $100 billion. Let me say that again. It is almost too big to comprehend. In the last 3 years on Wall Street, bonuses equaled $100 billion. In 2007, the 500 largest businesses in this country, the CEOs averaged $14.2 million. That is about 350 to 400 times the salary of the average worker. Thirty years ago, the average CEO made 30 times what the average worker made. Let me go back to ground zero and explain what caused all of this and then why I am concerned about what is happening around here. I have spoken on the floor many times, but I am going to do it again, because I want people to understand what is at the root of all of this. They say: Well, there are toxic securities being held by all of these institutions, and when you have toxic assets that have devalued and aren't worth anything, it threatens the lifeblood of the institution. Some of them go belly up, right? So how do they have all of these toxic mortgages, these securities? Here is what they did. A bunch of the smartest guys in the room, a bunch of high flyers, said: You know what let's do? Let's securitize things and then we can move them up the chain and sell them and resell them. It used to be: You want to get a home mortgage? Go downtown. Go to the businesses that make home mortgages--a bank or a savings and loan-- sit across from somebody who knows about it and negotiate it and sign a paper, and then they held your mortgage. And if you had a little trouble, you said: I am having a little trouble making this month's payment. That is the way it used to work. Kind of a sleepy industry that allowed people to get home mortgages in their hometown and that is where the mortgage paper was. Now, if you go down and get a mortgage, or perhaps a broker will call you and solicit you to get a mortgage under this regime, and they will sell it immediately, and then they will sell it up and somebody will securitize it with a bunch of other mortgages. Then they will resell that, and pretty soon you have mortgage securities. As I have said often, it is like packing sausage in sawdust and slicing them up and selling them up the line. They didn't have the foggiest idea of what was in these securitizations. So this is all about big yields. This is all about greed. Here is the origin of that greed. The biggest mortgage company in the country is bankrupt now, taken over by somebody else. In fact, the guy who ran this, Mr. Mozilo, escaped this with over $50 million, so he is sitting pretty well. This company, Countrywide, here is what they advertised. They said: Do you have less than perfect credit? Do you have late mortgage payments? Have you been denied by other lenders? Call us. We will give you a loan. Bad credit? Call us. Biggest mortgage banker in the country. Mr. Mozilo, who grew this company, was given the Horatio Alger Award a couple of years ago, listed as one of the most respected top businessmen in America. The company is gone, of course, now. Millennia Mortgage. I don't know who ran Millennia Mortgage. Twelve months, no mortgage payment. That is right; we will give you the money to make your first 12 payments if you call in 7 days. We will pay it for you. Our loan program may reduce your current monthly payment by as much as 50 percent and allow you no payments for the first 12 months. Call us today. Here is the example that all of us have seen. Zoom Credit. I don't know who ran this company. Credit approval is seconds away. Get on the fast track at Zoom Credit. At the speed of light, Zoom Credit will preapprove you for a car loan, a home loan, or credit card. Even if your credit is in the tank, Zoom Credit is like money in the bank. We specialize in credit repair and debt consolidation. Hey, listen: Bankruptcy, slow credit, no credit, who cares? Come get a mortgage from us. All over this country, people filled with greed, companies saying, Come and get a mortgage. In fact, I tell you what. We will allow you to get a mortgage from us with what is called a no doc loan. What does that mean? It means you don't have to document your income. It is called a no doc loan. We will give you a mortgage and you don't have to document your income. In fact, here is what you find on the Internet about that. No doc and low doc. Is that English? Yes, it is English. No doc. These mortgage companies said, We would like to give you a mortgage, a home mortgage, and you don't have to document your income for us. You just heard me say these companies say: You got bad credit, slow credit, no pay, been bankrupt? Come to us. They also say this: We will give you one without having to document your income to us. Then they say this: You know what. You don't have to pay any principal--interest only. No documentation of your income and interest only. But they say, If that is not good enough, we will tell you what. You not only pay interest only, we will make your first 12 months payments for you, and then you pay interest only. But if that is not good enough, you don't pay any principal and you don't pay full interest; we will actually cut part of your interest and have no principal and add it to the back end of your loan after you have gotten a loan from us with no documentation of your income. Been bankrupt? Are you a bad credit risk? Come to us. So now here is the trick, and here is how it all worked. Once they got you to do this, they locked in what was called prepayment penalties, and they said: If you get this mortgage, you should understand we are going to cut your monthly payment by a fourth. Are you paying $800 a month now? Get a mortgage from us, it will cost you $200 a month. That is a good deal. Now, it is going to reset with a new interest rate in 3 years. We want you to know that. We won't exactly tell you what that is going to mean; we will fuzz that up for you. But, of course, they never said you won't possibly be able to afford the payments in 3 years because the interest rate is going to go to 10 percent. What they did is they put in a prepayment penalty that was very substantial which meant that when this reset with a much higher interest rate and a much higher payment, people could not repay it, they could not prepay it to get out of the mortgage. That is the basis on which they slice up these mortgages and send them forward because they said these have very high yields with these prepayment penalties; we locked them into big interest rates in the outyears. Two million Americans are going to lose their houses this year because of this kind of trash. This is not good business. This is not capitalism as we know it. This is unfettered greed. Two million Americans will lose their homes this year. Think of that. Think of 2 million supper tables across this country, sitting around with the kids and the spouse saying: We are going to lose our house and there is not a thing we can do about it. Two million times this year? In addition to that, which I think is the most important piece of this sad story, in addition to 2 million people losing their homes, then we see the consequences of all these bad, toxic securities, mortgage-backed securities lying in the bowels of these big investment banks and regular banks as well, whose deposits are insured by the Federal Government. When they turn sour, it goes belly up. Then we wake in the morning and we hear big firms whose names we have been accustomed to for years that have been beneficial to this country, providing investment capital for expansion of this country's economy, all of a sudden they have gone belly up. Why? Because they are laden now with these toxic mortgages. I went to the Internet yesterday and I found 300 examples of companies that want to provide loans today; 325 examples under ``home loans with no credit check.'' Just today. Try it. Go to the Internet and see if you can find companies advertising: Come to us. Bad credit? Been bankrupt? No credit check. Hundreds of them are still doing it. The question is, Why is that being allowed? ``You have bad credit? Get approved today.'' These examples I have taken off the Internet in the last 24 hours. Let me go back to one more part of the story. I wish to read something Franklin Delano Roosevelt said on March 12, 1933. I know with all the newfangled securitization, the new rules, new approaches, the growth of the investment banks and all that, what we have seen, I know it is probably old-fashioned to think this way, but here is what Franklin Delano Roosevelt did. The banks went belly up during the Great Depression. He created a bank holiday and then reopened. But he wouldn't let them do what they used to do. The reason they went belly up is because banks were investing in real estate and securities and they were merging what has to be inherently safe and secure--that is banking, and it is not just being safe and secure with their balance sheet; it is having the perception of being safe and secure. If people think you are not safe and secure and they run on the bank, I don't care how strong your bank is, your bank is going to close its doors. A run on the bank and it is over. The perception of safety and security is critical. What we had in the Great Depression is banks merging up with real estate. It was go-go time in the roaring twenties. We had banks with real estate and securities and so on. Back in the Great Depression, Franklin Delano Roosevelt created something called the Glass-Steagall Act. He said: No more. We are separating basic banking from risk. You want to gamble, I say go to Las Vegas. He didn't say it that way back in 1934. He said you can't gamble with respect to banks. If you want to do securities, buy, sell, make money, lose money, God bless you, you have the right to do that in this system. If you want to do real estate speculation, you have a right to do that. But no longer will anyone have the right to do that with respect to fundamental banking enterprises. He separated them. In 1999, on the floor of this Senate, a financial modernization bill called the Financial Modernization Act came to this Senate. Senator Phil Gramm, Gramm-Leach-Bliley--we have to modernize the financial system. We are going to take apart Glass-Steagall. We are going to let financial homogenization occur. You can do one-stop shopping. Let everything happen under one big roof. We will create firewalls. It turns out the firewalls were made of thin paper. Eight of us voted against that Financial Modernization Act that stripped bare the protections put in place in the 1930s that has served us 80 years. The Senator from Iowa voted against it. Eight of us voted against it. I voted against it. I wish to show my colleagues what I said on May 6, 1999, during debate on that bill. I wish I had not been right. But here is what I said: The bill will also, in my judgment, raise the likelihood of future massive taxpayer bailouts. I sure wish I hadn't been right. That is exactly the position we find ourselves in now. I said during that debate: Fusing together the idea of banking, which requires not just the safety and soundness to be successful but the perception of safety and soundness, with other inherently risky speculative activity is, in my judgment, unwise . . . I said on November 4, 1999, when the conference report came to the floor of the Senate: . . . we will in 10 years' time look back and say: We should not have done that because we forgot the lessons of the past. As I say, I wish I had not been right. What I see happening these days are proposals I call no-fault capitalism. Things go bad, things turn sour, things go under, you know what, we will have the taxpayer take care of that. That is not the way capitalism is supposed to work. I am not interested in seeing this economy go down or seeing the wreckage of this economy, but I am interested in seeing if we can discover, even as we try to think through how we fix this situation, putting in place protections that will give us some notion of safety as we perceive it. Here is what I think we should do: Restore the firewalls that existed in Glass-Steagall in some form. We are going to propose a massive rescue fund of hundreds and hundreds of billions of dollars and not fix this situation? That is unthinkable to me, absolutely unthinkable. It makes no sense. Address the wildly excessive compensation on Wall Street. I described the company that went belly up last night. The CEO of that company made $14 million last year. For what? The CEO they hired 3 weeks ago got a $7 million bonus for signing a new contract and has a $12 million termination contract. So working for 3 weeks in a company that is now failed, bought by an investment bank that is undergirded by the U.S. taxpayers, being able to go to the Federal Reserve bank window for direct lending, a guy who works 3 weeks is going to get $19 million. Does anybody think we have solved this problem of wild speculation and wild CEO salaries? I don't think so. At least it doesn't seem that way to me. Next, we have to regulate speculative investments by hedge funds and investment banks. I have been talking about this for 10 years in the Congress, and we cannot get it done. If we are not prepared to regulate hedge funds and regulate the trading in derivatives, of which, by the way there is $46 trillion to $56 trillion of notional value of credit default swaps right now in this country--think of that--and nobody knows exactly where they are, nobody knows who has them all, nobody has the jeopardy of where they exist on someone's balance sheet. We don't know because we have had lots of people in this Congress willing to protect the institutions so they don't have to be regulated. If we decide we are going to do something to provide stability to the financial system and decide we are not going to regulate hedge funds, we are not going to regulate the trading in derivatives, shame on us. Shame on us. Yet there is no discussion of that because, well, that is too complicated. Oh, really? That is more complicated than putting together $700 billion in a bailout or rescue package? I don't think so. At the bottom of this discussion are the 2 million people who are sitting around the supper table talking about losing their homes. Wouldn't it have been smarter and would it not be smarter that while this repair is taking place that we decide to repair it at the bottom rather than pouring at the top, with respect to these toxic mortgages? How about working out family to family, by county, by city, working out the ability when a family can make payments, even at a lower interest rate, to keep that family in their house, to begin putting a floor under those mortgages? Wouldn't that make much more sense for everybody, including the American taxpayers, including the financial institutions for whom it costs much more to have an empty home foreclosed upon, to dispose of that? Wouldn't it make sense, especially for the families who would like to find a way to work out their mortgage? It sure seems so to me. The problem is, they cannot even find somebody to talk to because that mortgage has been put in these little pieces of security sausage, so exotic a lot of people don't understand them, and sold upstream three times, and they have all made a fortune. The problem is, the family is now going to get kicked out of their house, and all those folks who bought these now have toxic mortgages on their balance sheets, and we are told: You know what, we should bear the responsibility to solve that problem. I don't think so. We ought to create a taxpayer protection task force to investigate and claw back the ill-gotten gains in this whole system. There has been no oversight. Regulators have been dead from the neck up for 10 years. We pay them. They are on the job, but they are woefully blind, and shame on them. We have a right, it seems to me, and an expectation of aggressive oversight to find out who cheated, who engaged in predatory lending, and who will be made accountable for it. Where is the accountability? Finally, this Government has already done almost $1 trillion, let alone this $700 billion that is being proposed. Anything we do ought to make certain that the U.S. taxpayers share in the increased values of the very firms that have received the benefit of the backstop of the American taxpayers. I see no discussion about these issues. All I see is a roundtable discussion about who is going to provide the money and when and can't we hurry up. I will say one additional thing. It is curious that this administration and others spend most of their day talking this economy down and raising panic. The fact is, this country would be a whole lot better off talking about how we fix that which caused this problem, beginning with step 1. What Franklin Delano Roosevelt did was not old-fashioned. In fact, it is exactly what we need to do now. We need to decide that we are going to get in some control of this financial system. Financial modernization, my eye. That is what they called it, financial modernization. It took apart the protection. It allowed an unbelievable carnival of greed to occur with massive money being earned by a few. We are not talking about a lot of people. But virtually all the American people now are being asked by some to pay for it. I think it makes no sense. I do not intend to support any plan that does not begin to address these issues. Again, I am not somebody who thinks you ought to put water in the bathtub before you put the drain in the plug. That is exactly what we would be doing financially if we marched down this road and don't restore Glass-Steagall, don't regulate hedge funds and derivatives, don't deal with the wildly excessive compensation. If we don't do that, count me out; I am not part of this process.

Mr. DORGAN. Yes, I will be happy to yield.

Mr. DORGAN. Well, Mr. President, the Senator from Iowa makes a good point. I know Professor Galbraith. He also said we should regulate hedge funds. Certainly we must do that, he said, in the context of all this. It is interesting. My dad said: Never buy something from somebody who is out of breath. There is a kind of breathless quality to what has happened to us in the last week, with the Federal Reserve Chairman and the Secretary of the Treasury saying, things are going to hell in a hand basket; you need to act in 3 days. And they send us a 3-page bill saying, we want $700 billion and we insist no one be able to review our work. There is a kind of a breathless quality to that, isn't there? The Senator asked a question: If there is an investment--and we have already made a good number of investments, almost a trillion dollars-- if there is an investment in public firms, shouldn't there be some responsibility for the Government and the taxpayer to have access to and to understand what is in the balance sheets of those firms? The answer is: Absolutely. We don't even have a standard. You wouldn't give kids an allowance with the standard we have, would you? Almost every kid, in exchange for getting an allowance, has to own up to some sort of chores or some duties. This proposition is: Time is of the essence, we have a crisis, load up the money and deliver. That makes no sense to me. I know others are waiting to speak, but I started yesterday with a quote that I have used often, and somehow, at the end of every single major debate we have in this Congress, it ends up going back to that quote from Bob Wills and the Texas Playboys. Most of my colleagues know it, from my having used it so often, but it is: The little bee sucks the blossom and the big bee gets the honey. The little guy picks the cotton and the big guy gets the money. It is always that way, it has always been that way, and it will always be that way, unless we decide to change it. The question is whether in the next days we will decide to do the right thing or we will rush off breathlessly to, one more time on behalf of the American taxpayer, bail out those at the top of the food chain--one of whom made $14 million last year as one of the largest banks in the country that he ran and was apparently headed right into the ground. I tell you what: There is a right way to do things and a wrong way to do things, and the wrong thing for us at this point is to decide that we have to meet a midnight hour and ignore the basics of what ought to be done--regulate hedge funds, regulate derivative trading, and reinstate some basic modicum of protection that existed from Franklin Delano Roosevelt forward dealing with Glass- Steagall and protecting our banking institutions from the riskier enterprises. If we don't do those things, we will be back again because we will not have solved the problems that caused this crisis. I yield the floor.

Mr. DORGAN. If the Senator from Oklahoma will yield for a question.

Mr. DORGAN. I thank him for his courtesy in yielding. I want to say one additional thing which I forgot to say, and ask a question while I do that. No. 1, it may be that the cure that is being proposed is much worse than the potential that exists without it. Let me tell you what I mean by that. On Monday of this week, we had the largest 1-day drop in the value of the U.S. dollar in history. We had the largest 1-day increase in the price of oil in history, accompanied by a 350-point drop in the stock market. The analysts say it was because they thought people were worried about the unbelievable amount of debt, our fiscal policy, our trade policy, and now the proposed bailout debt, but the unbelievable amount of debt that would erode the value of the U.S. currency. If the electronic herd of currency traders goes after our dollar and collapses our dollar, the consequences for this economy can be far worse than that which is described by the Treasury Secretary and the Fed Chairman. And I am saying it occurs to me that if $700 billion plus tips the balance in terms of currency traders evaluating whether they want to come after the dollar, we face a greater peril than that which they suggest if we do nothing. I appreciate the Senator for yielding, because I wanted to make the point about indebtedness. The Government is deep in debt, and we have to somehow put it back on track. This issue that is being proposed, as you know, increases to $11.3 trillion our indebtedness. I appreciate the Senator's yielding.

Mr. DORGAN

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

Mr. DORGAN. Mr. President, is the Senate in morning business?

Mr. DORGAN. I ask unanimous consent to speak for up to 30 minutes.

Mr. DORGAN

Mr. DORGAN. Mr. President, I ask unanimous consent that the HELP Committee be discharged from further consideration of H.R. 1343, and that the Senate proceed to its immediate consideration.

Mr. DORGAN. Mr. President, I ask unanimous consent that a substitute amendment, which is at the desk, be agreed to; the bill, as amended, be read a third time and passed; the motions to reconsider be laid upon the table, with no intervening action or debate; and any statements related to the bill be printed in the Record.

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

Mr. DORGAN

Mr. DORGAN. Mr. President, I have often described on the floor the lyrics of Bob Will's and the Texas Playboys' song from the 1930s: The little bee sucks the blossom and the big bee gets the honey; the little guy picks the cotton and the big guy gets the money. Never is that more true than what we see today with the prospect of unbelievable financial bailouts and the mechanics of what is happening on Wall Street and the wreckage of the financial system. I wish to show my colleagues this about the bailouts by the administration. Everybody is talking about a $700 billion proposed bailout by the Federal Reserve and Treasury Secretary Paulson. In fact, the Federal Reserve previously committed $29 billion so J.P. Morgan could buy Bear Stearns, the investment bank that was failing. In addition, the Fed opened its discount window for direct loans to non-regulated banks for the first time since the Great Depression. We understand that this program and two other Fed loan programs total some $300 billion. There is another $300 billion for the Federal Housing Administration, and about $200 billion for Fannie and Freddie; JPMorgan Chase for Lehman financing, $87 billion; AIG insurance, $85 billion; $50 billion for money market funds that was offered as a guarantee; and now the prospect of $700 billion is pending. That isn't just $700 billion; that totals $1.7 trillion. Even if the Congress decides not to provide the $700 billion bailout that is being requested, there already exists $1 trillion that have been offered to try to stabilize the financial system. Now, the question is, How did we get into this mess? What caused this wreckage? What do we think we should do about it? I wish to talk for a bit about what caused this. I take no pride in being right 9 years ago as one of eight Senators who voted against the Financial Modernization Act. That act was a bunch of folks who sold to the Congress the proposition that what we put in place for protection in the 1930s, during the Great Depression, to separate banking from more speculative enterprises, such as real estate and securities--the decision was that that is old-fashioned, don't keep doing that; let's allow these companies to merge, to create massive financial holding companies--a kind of financial cafeteria under one roof. Let's bring them together, and you can build firewalls inside the organization. So the Financial Modernization Act was passed. I said on the floor of the Senate then that within 10 years I believe we will see massive bailouts that will be paid for by the American taxpayer. I regret that I was right. It should not have happened, however. I wish to talk about what has happened as a result of taking down the basic protections. Let me go back to the start of two things-- one I mentioned--the Financial Modernization Act, which took apart the protections. Second, a group of people came to this town boasting that they weren't interested in regulating. People were put into positions where they were supposed to regulate and decided not to regulate. Those two pieces together, taking apart the protections in law and putting in place people who wanted to be willfully blind in deciding not to regulate, steered us right toward the cliff. Here is what began to happen across the country. Most Americans saw this because you could not miss it. You wake in the morning and perhaps you brush your teeth or you shave in front of a mirror and you might have a small television set that you are watching, seeing what is going on, and the advertisements come on--and they are always louder than the programs. The advertisements say: Hey, if you have been bankrupt or if you have bad credit, you can get a loan from us. Do you think you are paying too much for your home loan? Are your house payments too high? Get a loan from us. This was the biggest mortgage bank in the country, Countrywide. They advertised this: Do you have less than perfect credit? Do you have late mortgage payments? Have you been denied by other lenders? Call us. America's biggest mortgage bank was saying: Have you got bad credit? Call us. Want a loan? Call us. Millennia Mortgage said this in their advertisements: Twelve months, no mortgage payments. That's right, we will give you the money to make your first 12 payments if you call in the next 7 days. We pay it for you. Our loan program may reduce your current monthly payment by as much as 50 percent and allow you no payments for the first 12 months. Call us today. So Millennia Mortgage was saying: Get a mortgage from us. We will pay the first 12 months. They didn't say, of course, that that money you are not paying is going to go on the back end of the loan, with interest, and will substantially increase the cost of your loan. Zoom Credit, in their advertisement, said this: Credit approval is just seconds away. Get on the fast track at Zoom Credit. At the speed of light, Zoom Credit will preapprove you for a car loan, a home loan, or a credit card. Even if your credit is in the tank, Zoom Credit is like money in the bank. Again, they say that even if your credit is in the tank, Zoom Credit is like money in the bank. Zoom credit specializes in credit repair and debt consolidation, too. Bankruptcy, slow credit, no credit--who cares? That is what they advertise. I don't know who the president of Zoom Credit was or who the president of Millennia was. I know who the president of Countrywide was. I know he is out of that company. That company is now collapsed and sold. He ended up with somewhere north of $140 million in unbelievable outer-space compensation. I don't know who these company presidents were, but I assume the brokers and CEOs of these companies were wallowing in money. They were all wallowing in money like hogs in a corn crib, grunting and snorting, making out like bandits--billions of dollars. In fact, in the 9 years that have led up to this period, the bonuses on Wall Street were $200 billion. I am not talking about salaries. I am talking about bonuses. In 9 years, it was $200 billion. It was $33 billion last year alone. So everybody is making money. They are advertising to people: got bad credit, bankrupt, slow pay, no pay? Doesn't matter. Come to us and get a mortgage. So they were writing mortgages in the dim light of these rooms, with brokers who are breathless to get their bonuses and mortgage banks interested in putting the mortgages out there. They are advertising we can give you teaser rates. Want to pay a 1 percent rate? We can do that. Two percent? We can do that. Then they would create a mortgage at a teaser rate, with a reset in 3 years maybe to 9 or 10 percent, which is locked in with a prepayment penalty so you cannot prepay it. It is a reset that the borrower cannot possibly pay. But they say: Don't worry about that; the housing prices are going up, up, up, and all you have to do is get this mortgage from us, and when it resets, it is true that you will not be able to pay it, but you can flip the property in 2 years. That is not a problem. You will make money. So they put these bad mortgages out there--bad mortgages all around-- and they would combine them with a few good mortgages and put them into a security and splice and dice them and cut them up, like they used to package sawdust in sausage years ago. Then they would sell them upstream, from the mortgage bank to the hedge funds and investment bank. They are all fat and happy because they all know the return embedded in these securities is a very substantial return. The mortgage holder is locked into it because they have prepayment penalties. None of them were smart enough, even as they were collecting massive incomes, to understand that the people who were going to have to make the payments could not possibly make the mortgage payments once they were reset. So at some point, mortgages began to reset. It is estimated that 2 million American families will sometime over the next year come home and sit around the supper table and discuss the fact that this is their last night in their home because they are losing the home because they cannot pay their mortgage. I am not talking about 2,000 or 20,000 or 200,000 families; I am talking about 2 million American families. It has caused a precipitous drop in property values around the country. It broke the bubble of the escalating price of housing and then began to collapse it. It has had a profound impact on most American families. The most significant form of equity for most American families was their home equity. Similar to the tent pole being pulled out of a big tent, it collapsed. We have people sitting back and thumbing their suspenders, wondering how this could have happened. It doesn't take a genius to figure it out. Where were the people who were supposed to regulate in this town when they saw this practice of advertising mortgage conditions that you knew the borrowers could not meet? Where were the regulators? They were sitting by with grins on their faces because they were engaged in other things; they weren't regulating. So now we have this unbelievable financial wreckage. We see major investment firms that have been around since the Civil War going bankrupt. We see runs on some of the funds in the investment banks. On Monday, we saw the most significant drop in the value of the dollar in a single day, and the most significant increase in the price of a barrel of oil in a single day, even as the stock market dropped 500-plus points on the same day. So the question is: What do you do about this financial wreckage? How do you put this back together? Even as the Treasury Secretary and the Chairman of the Federal Reserve Board are now over before a committee of the House today, describing their plan to put this back together. As I indicated earlier, their plan is to provide $700 billion to take the toxic mortgage-backed securities off the hands of those who invested in them, which, by the way, then adds up to about $1.7 trillion having been committed of American taxpayers' money--even as they are doing that, nobody is talking about how you fix the underlying problem. You can pour something in the top, but if you have not put a stopper in the drain, you are going to pour it right out the bottom. Let me describe what I discovered today. I went to the Internet today. While the Treasury Secretary and Fed Chairman are over testifying about how you deal with the financial wreckage, and how much you ask the American taxpayer to pay for this malfeasance, I found this. I was just curious how many places on the Internet I could still find the same business practices of advertising to come and get a loan if you have been bankrupt or if you have bad credit. Well, I found 325 cases on the Internet where they would provide you a home loan and promise they would not check your credit. Again, they would not check your credit. Isn't that interesting? Talk about bad business practices. There are 325 companies advertising get a loan from us and we will not check your credit. Most people don't believe it when I say these mortgage companies, who put out these toxic mortgages, were advertising ``no doc'' loans. It doesn't have anything to do with doctors. That means you can get a mortgage from them for your home without having to document your income. You are going to ask them to provide the funding for you to buy a home, and they say you don't have to document your income to us in order to get that loan. That is so far afield and ignorant, in my judgment, of what you would expect in terms of sound business practices that it is even hard to describe. Here is what is on the Internet this morning. Easy loan for you. It says that you can get your loan, without collateral, in a couple days. Even with bad credit, no credit or bankruptcy, your unsecured loan is completely guaranteed. Think of that. We have people asking over in a House committee today to have the American taxpayers provide $700 billion for a bailout. And on the same day, on the Internet, here is a company that is advertising that they will give you a loan with no collateral. It will take a couple days. Even if you have bad credit, no credit, or bankruptcy, we will guaranteed your unsecured loan. Is somebody going to fix this, I wonder. Here is what I found on the Internet this morning. SpeedyBadCreditLoans.com. Think of that. Isn't that unbelievable, SpeedyBadCreditLoans.com. I guess there is a dot.com for almost everything, including speedy bad credit. If you have bad credit, type in your characteristics. I have bad credit. Can I get a mortgage? Can I get a loan? Bad credit loans. Bad credit, no problem; no credit, no problem; bankruptcy, no problem. Get a guaranteed bad credit personal loan today. I am wondering if those we are paying to be regulators in the Federal agencies today who are supposed to deal with predatory lending, deceptive practices, I wonder if they are still asleep at their desks or are they going to the Internet to find out these kinds of business practices exist on the Internet? Probably not. I found this today as well. I could do this all day because it is all over the Internet. ``Bad credit personal loans, a Christian faith-based service. Fast results in just 60 seconds.'' There is a modicum of responsibility here. It says you have to reside in the United States. That is really helpful, I guess. Bad credit personal loans. If you have bad credit and some Christian faith, if you live in the United States, we have some money for you. This is an example of a cesspool of greed, and we can't possibly begin addressing these issues, the underlying problems on Wall Street, the financial wreckage that has been caused, without addressing this situation. You are going to decide to bail out whatever, you are going to put up $1.7 trillion and try to stabilize things when you have this sort of thing going on in the country? This is almost unbelievable. On Monday, there was an analysis of what happened in the marketplace. Why was there a precipitous, larger than ever, 1-day drop in the value of the dollar? Why was there the largest 1-day runup in the price of oil, accompanied by a 300-plus point drop in the market? Most of the analysis was people were concerned about the value of the dollar, throwing massive amounts of credit, the substantial amount of money that is being provided to bail out firms to provide undergirding loans for firms. All of this is added to the Federal debt, by the way, which itself is about $700 billion in trade debt in this year, about $700 billion in fiscal policy debt in this year. That's almost 10 percent of this country's GDP in 1 year. Analysts take a look at that and say: On top of that unbelievable debt and fiscal policy, you have run off the rails in fiscal policy, you are off the rails in trade policy with unbelievable debt, we will now ante up a substantial amount of money for Federal bailouts, and analysts say: I worry about what that will do to the value of the dollar. The electronic herd that bets on currency, the currency traders, when they go against a currency, they can destroy an economy and devalue the dollar, meaning people pull their investments and put it in gold and put it in commodities. That is what dramatically can destroy an economy. It may well be true that might be worse. The destruction of the economy might be worse by dramatically eroding the value of the dollar and having the currency traders run against this dollar than not doing the $700 billion that Secretary Paulson and Mr. Bernanke suggest. I think it is the case that this Congress has a responsibility to do something. Doing nothing is not something that makes sense. We cannot decide: You know what, whatever is happening is happening; we are oblivious to it; we will decide to take the same tack regulators have taken in the last 7 years and sit around and observe and from time to time grin or just decide that we will be completely ambivalent about what is happening. We cannot do that. We have to take some action. So the question is, What? First and most important for me is we have to restore the stability and the safety of the banking system. I think that means we should recreate the protections that existed after the Great Depression. It may not be that we recreate explicitly what Glass- Steagall provided, but the protections that it provided must exist going forward. Otherwise, we will not have done anything by bailing out anybody. We will still have the same circumstances existing in our economy, with people advertising on the Internet that we would like to put bad paper out, thereby giving mortgages to people with bad credit, bankruptcy, or other slow-pay problems in their credit history. It makes no sense to me to ignore what happens when you merge or combine the functions of banking with the functions of investment in real estate and securities. Banking requires not just the reality of safety and soundness but the very perception of safety and soundness. If people perceive a bank is not safe and sound, they will run on the bank and the bank will fail, inevitably, regardless of how much capital it has. It will not have enough capital to withstand a run on the bank. That is why just the perception of the safety and soundness of banking enterprises is imperative. We went far afield in deciding that we will allow the fusing of inherently risky enterprises, investments and securities and real estate, to banking. I know that some point to as a success allowing, for example, Bank of America to come in and purchase one of the failing investment banks. I don't view that as a success. At the moment, it was able to forestall a failure. But now we have attached a large banking enterprise, whose perception of safety and soundness is critically important, to an investment bank that was failing. I don't see that as success. I think it is moving in exactly the wrong direction. I want us to find a menu of ways to provide confidence to the American people that we are moving in the right direction. That requires a lot of things. No. 1, straighten out this wildly escalating trade deficit. We cannot have a $60 billion-a-month trade deficit. That is what destroys your currency value. We have to get real on fiscal policy. We cannot continue to spend what we don't have on things we don't need. We have to find a way to create a fiscal policy that has some stability and balance to it. We have to address these business practices with effective regulation. We have to recreate the protections that existed for the banking system. We have to address the wildly excessive and speculative incomes and salaries on Wall Street which I think incentivized reckless behavior. As I indicated, in the last 3 years on Wall Street, just the bonuses--I am not talking about salaries--just the bonuses were $100 billion. Many of them went to the very people who steered us into this corral. In the old western movies, they used to call this a box canyon: there is only one way in and one way out. The same people who got us there made a massive amount of money putting us where we now are. As I said, we need a system of regulation that gives us some accountability that laws are going to be followed, that we are going to regulate the deceptive practices, predator lending, and so on. Then I think, as well, we need to have some period of forbearance on mortgages where people who can continue to make payments even under the original interest rate can make those payments for a period of time and continue to stay in those homes. That is the only way we will begin to put some strength under the value of homes. Otherwise, we will continue to see a collapsing of home values. As I said, 2 million families will lose their homes this year unless we find a way to take some action. Finally, we should create a taxpayer protection task force. No matter what else we do, we need to investigate and claw back ill-gotten gains in which people have gotten away with billions of dollars by shady business practices. Whatever this Congress decides to do or must do, the American taxpayer ought to have a share in the increased values of the investments that are made in their name. There is one point that unites everybody in this Chamber, perhaps in this Congress, perhaps in the entire country. I don't think anybody knows what the right answer is. We certainly can take a look at this situation and understand now what caused much of this, but I don't know that anybody has a magic bullet that says you do this and we immediately provide stability, we move this country toward higher ground, we have stopped some of the volatility. I don't know that anybody knows that. But I think the American taxpayers are plenty worried about what I think is a stampede in the wrong direction. On Friday, we were told by the same people who have reassured us in recent months that things are OK, things are stable, don't worry. We were then told by the very same people that in the next several days, the American taxpayers need to ante up a $700 billion bailout plan, following a substantial amount of money that has already been provided by the American taxpayers to bail out and to provide support for investment banks that were failing. And we are told: Here is a 3- page piece of legislation, one provision of which is that one person will decide where the $700 billion goes, and that person's decision will not be reviewable by the courts or by the Congress. In my judgment, that is a nonstarter. Congress is not going to do that, should not do that. The question is, What do we do in the coming couple of days to provide some assurance and stability? I think it makes some sense to go back to the fundamentals, and the fundamentals are, you start fixing that which caused this problem. You connect the protections that used to exist. If you start fixing, at the foundation, some of the issues that caused this problem, you will begin to engineer some confidence in this country. Finally, I used to teach some economics briefly in college. I talked a lot about the supply-and-demand curves, and all of the things we know are in the books that describe the way the economy works. But no one really knows much about how the economy works. We all think we do. Economics is a little bit of psychology pumped up with helium. It is a lot of discussion about what we think might or might not happen. The most important thing to understand about this economy is the American economy expands when people are confident about the future. If people think the future is going to be better for them and their family--they have a job, feel good, feel secure--they do things that manifest that security. They buy a home, buy a car, take a trip. They do things that manifest people's confidence in the future, and that creates economic expansion. If, on the other hand, people are not confident about the future and concerned about the future, concerned about their job, concerned about job security, then they do exactly the opposite. They decide not to buy that car. They decide not to take that trip. They defer the purchase they were going to make. And then we have economic contraction. This is not about an engine room of a ship of state with a lot of levers and gears and dials and gauges that you can get just right to make this economy work. This is a lot about consumer confidence, how do you provide confidence in the future. That is how we begin to expand this economy. How can people have confidence in the future when they see these unbelievable wild gyrations that are occurring on Wall Street? How can they have confidence in the future when they know what the root of it is? People have been advertising to them that if you are bankrupt, if you have slow credit or no credit, come here, we will give you a loan. How can that engender confidence? And how can people have confidence in an economy where we have a President who says: You know what, we are going to go fight a war and not pay for it; I insist we not pay a penny; I insist that while we fight this war, we are going to charge every single cent, and if you in Congress want to pay for it, I will veto the bill that raises the funds. Is that going to give people confidence? I don't think so. People have a right to be concerned about an economy that is deep in debt and getting deeper every day and a trade policy that ships our jobs overseas and ends up with a $700 billion trade deficit every year that will have to be repaid with a lower standard of living in our country. People have a right to be concerned about that. If you go back to the fundamentals and start putting some of this back together--a fiscal policy that makes sense, a trade policy that stands up for this country's economic interests, and firing the regulators who won't regulate, and put in place new regulations and new regulators who will do the job they are paid to do, and then restore the laws that provided protection so we don't fuse risk with banking-- if you start doing those kinds of things and telling the American people we are going to bring back some of those ill-gotten gains, and we are going to stop these outer space incomes of hundreds of millions of dollars a year. In fact, the highest income earner last year was $3.6 billion. That is a $300-million-a-month paycheck. Does that seem a little out of line to you? It does to me. I have covered a lot of ground, and my sense is that we have work to do to give the American people the comfort and the assurance that we are dealing with the fundamentals that will put this country back on better footing. We won't do that by deciding to write a check and offering up a bunch of money. It won't happen. I mean, that is not what is going to provide confidence to the American people. What will provide confidence is effective leadership, leadership that says here are the six or eight things that are wrong, we know they are wrong, we have known for some while, and now we are going to make them right. If we can we can work on those issues together, I think the American people finally will decide there is some leadership that will give us the opportunity for a better future. Mr. President, I yield the floor, and I suggest the absence of a quorum.

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

Mr. DORGAN

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

Mr. DORGAN. Mr. President, this afternoon we will vote on energy tax extenders or tax incentives for renewable energy. I wanted to make a comment about the importance of this legislation. I believe this will be our tenth vote to try to extend the tax incentives for renewable energy. It has been previously blocked nine times, which is almost unbelievable to me. But at a time when we face a very severe energy problem in this country, and when we need to incentivize and begin developing additional renewable sources of energy to make us less dependant on Saudi Arabia and Kuwait, Venezuela, Iraq, at a time when we need to be less dependent and produce other kinds of energy, we have been blocked in extending these energy tax credits. It makes no sense at all to me. If you are going to address the energy problem in this country, we need to do a lot of things. We need to conserve more. Yes, we need to drill more, and we need much greater energy efficiency. We need to do a whole lot of things, but this country needs to move ahead with respect to renewable energy on a much more aggressive path. A substantial amount of energy comes every day from the Sun, and we use precious little of it. A substantial amount of energy is available from the wind, and we use too little of it. How does this compare to other energy resources? Now, here is what we have done in the past for those who look for oil and gas. In 1916 this country said: If you are searching for oil and gas, we are going to give you a big fat set of tax breaks, because we want you to find oil and gas. That has existed for nearly 100 years, those tax incentives for those who search for oil and gas. Contrast that with what we have done for those who want to proceed with renewable energy such as wind and solar. In 1992, we put in place the production tax credit. These were short- term and rather shallow tax incentives. They have been extended short term five times. They have been allowed to expire three times. We have seen projects to put up new wind turbines and new solar projects put on the shelf because these tax incentives have been in a start-stop, stutter step approach. It makes no sense. It is a pathetic, anemic response. This country should be saying: Here is where we are headed for the next decade. For the next decade you can count on this. We are going to develop wind resources and solar energy all across the country that will make us less dependent on Saudi Arabia, Kuwait, and others. That is what this country should do. We have had great difficulty getting a 1-year extension from these production tax credit for wind energy, as an example until December 31 next year. I am going to celebrate today, if we pass this legislation. I believe we will. It is an achievement, but it is not a giant step forward. It is a baby step in the right direction because we have been blocked nine times by the minority from passing this legislation during this Congress. My hope is that today, finally, we will get it done and get this finally sent back to the House and to the President for signature. We have had a lot of time on the floor of the Senate in recent weeks, a lot of wringing of hands, mopping of brows and gnashing of teeth about energy. This country's economy runs on energy. Sixty-five percent of the oil we use comes from overseas. We are unbelievably dependent on foreign sources of energy. How do we overcome that dependence to make us less vulnerable? We can do that by producing more here, which means drilling and by substantial amounts of conservation. We are prodigious users of energy, and we waste a lot. So while we produce more, we need to conserve more too. In everything we use every single day, from the time we turn the light switch on in the morning, to all of our appliances like refrigerators, air-conditioners, dishwashers, and more, we must make them more efficient. Many of these machines are more efficient now than they were in terms of all appliances. But we can impose even greater standards and create greater efficiency. So production, conservation, and efficiency--all are elements of an important national energy program. I believe most important is the decision to pursue renewable energy. We do it with ethanol by taking alcohol from corn and extending our energy supply. We do it with biodiesel too. We do it with a range of areas. Especially in the area of biomass, wind, solar, and geothermal energy, there is such great potential. We have had so much difficulty providing certainty about where America is going to head with renewable energy. I have introduced legislation saying we ought to do this for a full decade. We ought to say to the world, to investors and businessmen and women: Here is where America is headed. You can count on it. We will produce a lot of energy from renewable sources. We will maximize the opportunity to receive energy from the Sun. We have some projects that are interesting, but we have fallen far behind on solar energy. We are not anywhere near where we ought to be in producing solar energy. We are not near where we can be in producing energy from the wind. We have unbelievable turbines now that are much more powerful. They can take energy from the wind and use that energy to extend America's energy supply. This is a very important vote, but it is only a small step forward in the right direction. It needs to be followed by a much larger step that tells the world where America is going. Yes, we will drill, conserve, all those things, but this country needs to decide that we want substantial amounts of additional renewable energy to make this economy less dependent on Saudi Arabia, Kuwait, Iraq and Venezuela. They provide us energy that comes from off our shores. Using more renewable energy and using this energy wisely are very important elements to sustain our country's economic strength and opportunity in the future. I yield the floor.

Mr. DORGAN

Mr. DORGAN. Mr. President, I would like to announce that the Committee on Indian Affairs will meet on Tuesday, September 23, at 10 a.m. in room 628 of the Dirksen Senate Office Building to conduct a business meeting to consider pending legislative issues. Those wishing additional information may contact the Indian Affairs Committee at 202-224-2251. Committee on Indian Affairs